Lawyers PI Program
“Building a PI Practice”


 From the Desk of:


“Insurance Billing vs. Collections…

It’s About Getting Paid!”


This consultation is about how to use the laws of your state to collect your insurance payments in a timely fashion without having to beg. For almost 13 years I did what most do, beg and plead to get paid. It didn’t work for me then and today the same holds true for you…it doesn’t work!


Here is 1 scenario…You perform a service and assuming you code properly with the ICD-9 and CPT linking accurately (50-60% error rate in chiropractor’s offices, but that is for another day), you get your bills in the mail and the insurance carrier either pays your bill in full or lets you know why they are not paying within a 30-45 day window, and you have no receivables beyond 45 days. Your accounts receivable for insurance are $0. Have you accused me of being delusional yet?


Here’s the typical office, as I have been in too many and virtually everyone has the same issues (Note that this is not unique to chiropractic.): You see the patient and fill out a fee slip or routing slip (name is not important) and you give it to your front desk. They in turn, give it to the billing staff that enters the codes into the computer. In many cases, they choose the diagnosis from a list the doctor has given them without a shred of education on how to accurately cross link codes. The HCFA, or some form, is created and then billed to the insurance company hoping for prompt payment.


Every 30 days or so, your billing staff prints out a computer log of accounts receivable and starts to call on the delinquent accounts. Historically, the staff chooses to wait 45-60 days until they start to call to collect on the claims. During this time, they open the mail and put the insurance correspondence into a “to get to” bin, or file and in-between tasks, handle the requests of the carriers. This should sound familiar, because it is the actions of 90% of every office in America. You are doing exactly as the carriers want, and every step in this paragraph is failure technology that will prevent you from getting paid.


Here are the issues:


  1. You have a billing staff. They are usually good at what the name says, billing. However, they have no experience or education in collections. Most of the time, they have no training in billing either, and you must rectify that. Collectors have to know the laws of the state that the insurance companies have to abide by. We will discuss that a little later.


  1. Computer receivable logs do not work. Most of the staff gets through A-M in the alphabet each month, if they are lucky. The N-Z rarely gets the attention that A-M does. Ask your staff.


  1. Picking up the phone as your primary collection tool does not work. If you have 20 claims generated per day, ask your staff how many claim reps they can actually get on the phone to resolve a problem. 4-5 a day is a good number. If you take into account being put on hold, not being able to locate the file and the call backs required, 4-5 on the average is good. That means if you get paid on 50% of your claims without calling, and you have not gotten paid on 10 claims per day, each day in practice you fall behind 5 claims. It’s not your staff’s fault, it's the system that doesn’t work. It will soon be your staff that doesn’t work also, because they will quit out of frustration of working in a system that is set up to fail. People do not like to work in a “failed paradigm.” Verify the facts; not with your staff, but by looking for yourself…it’s your money.


  1. A second issue with picking up the phones is that you are begging and pleading with the insurance companies to get paid, and you will fail more then succeed. The moment you pick up the phone, you are playing their game and they know it. This is where the laws of your state needs to be utilized as leverage to get paid for services rendered. I will explain how later in the consultation.


  1. You will be treating a good portion of your patients for free. Those letters that the insurance company sends you are designed to “paper you to death.” They know that you cannot handle the paper burden and they have also profiled who does not respond to them in a timely manner. Most of those correspondences have regulatory time deadlines that if you do not respond by, you forever forfeit your right to get reimbursed. Read the back of the explanation of benefits. Most states require the carriers to print the statutes on the claim directly; some states require you to simply know.


Have you had enough yet? I did and was tired of treating too many patients for free. Well, not really for free; I had to pay for my staff, the supplies, the electricity, the insurances, the rent, the ink to write the notes and I was liable for every patient I touched…So it wasn’t for free. I had to pay a lot of money to treat those patients. I would have settled for free, as I would have saved lots of money. Even better, if the patients never came in for care, I would have saveda small fortune by not paying for all of the above.


I want to talk about my first insurance staff member, Diane. She was great; she opened the mail, posted the payments, responded to the insurance companies, called on all of the delinquent accounts and gave me the free time I needed to care for the patients and do all of the projects that I wasn’t able to get to while building my practice. I was one happy chiropractor. Approximately 6 months into her employment, I noticed in a subtle way that collections were decreasing. The subtle way was I couldn’t pay her salary or the rent or the electric…You get the picture. I went to Diane and I asked her what was going on. She replied that we were just having a “bad stretch” and all would be great in a little while. Another month passed and it got worse, although I didn’t think it possible, and I had to fire Diane because I couldn’t afford her salary. What I found was a very expensive education. In her desk after she left, from front to back: ketchup and mustard packets, salt and pepper packets, lunch menus, ½ completed cross-word puzzles, and behind all of those were HCFA’s stuffed into the draw that weren’t sent out and computer insurance logs N-Z, not marked up, as no action was taken on them.


I found the same thing in the next 10 offices I consulted with and there is a good chance that you will find the same. First, I made the fatal mistake of abdicating the responsibilities instead of delegating the responsibilities to Diane. I hired someone with marginal experience in “my specific field of insurance collections” because there are so few with the exact experience required, and set her to work with a system that was a failed paradigm. All formulas for failure…and I did.


The first rule when you hire someone to do a task is never abdicate the responsibility, delegate. That means there has to be a series of checks and balances. If it is something as important as your collections, then work arm in arm with that person until you are sure they are trained appropriately. Give them tasks and with the completion of each task, have them show you what they did. You also need to create statistics for them to complete regarding billing, phone calls made, demand letters sent, etc. Stat them on paper and review them weekly. Be in control without having to do the work.


Computer recall logs do not work. This is one area where a paper system was found to be more efficient. We created a paper “tickler” file that used the laws in our state to not let any claim beyond 45 days go un-acted upon, with a final step towards resolution. We were able to take action on 100 claims per day, per staff member.


First, you need to know the laws in your state. Start by calling your state’s Department of Insurance and asking them the mandated time frames for insurance companies to either pay, or report to you that there is a legal delay in the claim. In New York, for instance, the carriers have 30 days to either pay your personal injury claims (NYCRR 65.15(e)(2)), and if they do not pay or notify you of a “legal” delay, they have to pay you 2% per month without the assignee (doctor) demanding interest payment (65.15 (e)(2)(h)). Therefore, when we sent in a claim to the personal injury carrier, we filed the claim in a paper tickler 40 days ahead of time, leaving 10 days for the mail, as NY carriers do not accept electronic filing for those claims. As the payments or denials came in, we pulled the claims out of the tickler file and when that date in the tickler file arrived, all of the claims in that file were delinquent. We did not call the carrier! We sent them a notice that if they did not pay our claim within 2 weeks, we would report them to the New York State Insurance Department and Consumer Service Bureau, and they would be fined $500 per day, per HCFA as penalty by the State of New York under the “Prompt Pay Law” (Section 3224a of the New York State Insurance Law). We had a form letter that stated the law and it was sent to the carrier via mail, with a copy of the HCFA.



Initially, we sent the claims certified, no receipt to verify that they received the claim, and we billed every 30 days. We used 1 certified per insurance company and sent 1 very big package each month to save on postage. This process was repeated with managed care and workers compensation claims using the different statutes for those financial classes.


If there were 100 unpaid and unanswered claims each day, how long did it take a staff member to pull the claim, copy it, attach a delinquent letter and put it in an envelope? Each staff member could complete over 100 collection actions per day and we never fell behind, no matter the volume. This is vs. the 4-5 you can get on the phone to complete a collection action. Occasionally, we did pick up the phone on larger claims, but our story was the same when we eventually got the carrier on the phone. The conversation was, “I sent you the claim. Pay my bill...pleeeeeeeeeeease!!!!!


My letter simply stated, "You are late in paying my bill. Now pay me my bill and 2% interest per month as per NYCRR 65.15(e) (2) and 65.15(h)(2). If you do not, we will report you to the New York State Department of Insurance, and you will then have to pay both my claim with interest and be fined $500 per day per HCFA, and that will be publicized in the year’s end report and used against you by your competitors when you advertise for new business." We went from 50% payments to 90% payments. The balance we either litigated and/or arbitrated.


You cannot beg and plead for your money. There are laws in every state to protect you and those that understand the laws and use them get paid. The insurance companies profile you and know who begs and pleads vs. those who utilize the law to rightfully get paid. The latter group gets paid with much greater ease.


As a side note, if the Department of Insurance in your state is not helpful, call your state senator or assemblyman and ask them to get you the regulatory information. It’s where I started. Remember, they work for you and are on your payroll…It's called taxes. You are entitled to get paid a fair fee for every service that you render.