Selling Healthcare Receivables through Established Relationships- The Benefit of Forward Flow Agreements

Selling delinquent debt has become commonplace in many industries, but it remains limited in the healthcare arena, for many reasons. Hospital financial services executives remain concerned with maintaining control over their account inventory and minimizing public relations risks. Moreover, the unique nature of medical debt requires that healthcare providers conduct considerable due diligence before embarking on the sale of their medical debt. The charitable mission of many acute care facilities, along with the public relations concerns that may result from aggressive third party collection tactics, dissuades many providers from selling their debt. Additionally, the absence of secondary markets has served to hold prices down.

However, facilities that have established a relationship with a collection vendor are now more comfortable with the possibility of an outright sale of their debt, as opposed to the traditional contingency fee contract relationship. In fact, forward-flow agreements are becoming more popular as healthcare providers seek to maximize revenue and immediate cash infusions. Ideally, these agreements contemplate the sale of receivables on a monthly basis, with the benefit of a look-back period which allows for more accurate pricing. As hospitals become more comfortable in the sale of their receivables, we expect that forward-flow agreements will become a routine avenue for revenue maximization.

Jorge M. Abril, P.A. encourages its clients to evaluate the sale of their delinquent receivables as a viable strategy for increasing cash revenues while minimizing their public relations risks.

Recovering the Usual and Customary Rate- What the Healthcare Provider Should Know

The settlements reached earlier this year between New York Attorney General Andrew Cuomo and a group comprised of the largest health insurers in the United States have prompted a series of lawsuits throughout the country against major health plans such as Wellpoint, AETNA, and Cigna. A summary of this litigation can be found on this website. Essentially, the lawsuits claim that companies utilizing the Ingenix database have inappropriately manipulated the level of reimbursement paid to providers for out of network medical care to the detriment of members and providers.

When a provider treats a patient needing emergency medical services who subscribes to a health plan that is not contracted with the provider, there is no set rate at which the provider should be paid. Many statutes provide that in this situation the provider is to be reimbursed at the "usual and customary rate." In Florida, for example, according to Florida Statutes section 641.513(5), the plan must reimburse the provider at the lesser of the provider's billed charges, the agreed upon rate, or the usual and customary rate. But few, if any, define what "usual and customary" means or how it should be calculated, and as a result, providers and plans often disagree as to the appropriate level of reimbursement.

The most recent lawsuits should demonstrate to providers of all sizes that they do have recourse when they are being underpaid by one or more Managed Care Organizations. The Healthcare Reimbursement and Latest News sections of our website have more information on how consulting an attorney can be of benefit.

HIPAA and President Obama's Economic Stimulus Package

President Obama expects his economic stimulus, the American Recovery & Reinvestment Act of 2009, to affect the lives of many Americans. I, for one, will be attempting to capitalize on the $8,000 tax credit for first time home buyers, which I'm sure you've all heard about.

Lesser known provisions of the legislation have significant effect on the way HIPAA covered entities and business associates handle Patient Health Information (PHI). For example, under the new law, covered entities will be required to notify individuals when there has been a breach of their PHI, and business associates will be required to notify the covered entities they contract with of breaches, regardless of the terms of their contract. There are many other provisions of this new law that healthcare reimbursement professionals who exchange or utilize PHI should note. The text of the request for information created by the Department of Health and Human Services is provided here.

More information is available on this blog, and in this summary, provided by the Center for Democracy and Technology.