.gif){kind=logo}
Red Flag Rules: A Good Idea for Healthcare
By Bruce Nelson, Vice President, SearchAmerica
If you are like most healthcare financial professionals, you have first-hand knowledge of countless patients who used another identity to procure their medical services. Perhaps they stole an insurance card from a family member, or simply borrowed a stranger’s driver’s license to cover the costs of elective surgeries, or much worse. Either way, your organization and the rightful owner of the identification were violated, and most likely left with a large hospital bill that would never be recovered.
Identity theft is prevalent and on the rise. The Federal Trade Commission (FTC) is taking an important step to combat this trend, not only in healthcare, but across financial and lending institutions with its Red Flag Rules and its deadline of November 1, 2008. The Rules apply to any organization, not just healthcare, that extends credit to individuals through a multi-payment plan or covered account.
Some view this regulation as yet another government requirement. I urge you to instead view the Rules as a catalyst to implement changes in your hospitals that will protect you and your patients from identity theft and is an impact on your bottom line.
To comply with the Rules, companies must submit their written program to identify and manage ‘red flag’ accounts by November 1, 2008. Each program needs to meet certain details on how your organization will identify, detect and respond to patterns, practices, or specific activities – known as “red flags.”
Step One: Identification / Detection of Red Flags
Hospitals need to accurately identify every patient by validating
their demographic information (address, age, social security number, etc.)
using a reliable, third party source. Inconsistencies can constitute a ‘red
flag’ and immediately notify the registrar that something is amiss with this
patient account.
Likewise registrars should be able to view accurate patient information, such as age, to make a visual validation. For example if the patient appears to be in their 20s, but the validated patient information is that of a 60-year old, the registrar should ‘red flag’ this account.
Over the years, our customers have found that using outsourced financial clearing solutions at registration identifies problem (or red flag using the FTC’s terminology) accounts and also provides more accurate information for billing and collection purposes. These systems can correct information that is simply keyed into the system incorrectly or data that mistakenly offered without motive, as well as those trying to perpetuate identity theft.
Complying with the rules and automating this step provides the independent, unbiased, consistent process to validate the identity of each and every patient that enters the hospital.
However, detection is just the first step.
Step Two: Response to a Red Flag
Once a ‘red flag’ is detected due to inconsistent patient information,
each hospital must have a policy stating its response processes. The
processes should include an automated workflow that is launched when
inconsistent data is given, whether it is recognized and identified by a
system (e.g., wrong address) or the registrar (e.g. patient doesn’t fit the
age specified). In either case, a scripted process that walks the hospital
staff through this situation is necessary.
Responses should consist of both trained staff and automated systems to aid them in their workflow. The system should prompt them to ask pointed questions to ascertain if the error is innocent or not, and they should be appropriately trained on how to manage the conversations in a professional manner, directing the patient to the appropriate manager or authority as needed. Healthcare networks will likely find that these processes may differ by hospital, patient type (self-pay, insured, etc.), or service center.
Next Steps
Once these steps are completed, a hospital needs to provide
administrative oversight of its Red Flag Rules response by its Board of
Directors, and have a plan to periodically reevaluate its identity theft
processes and the effectiveness of its current process.
The FTC’s Red Flag Rules provide a smart and rationale framework for organizations to minimize identity theft within their customer base. This is good for consumers/patients, and their providers alike.
Compliance with this government regulation will extend additional benefits to your organization through reduced bad debt and less account aging due to accurate patient information (or identity theft detection) at the onset of your financial relationship.
For more information on the FTC’s Red Flag Rules, visit http://www.ftc.gov/opa/2007/10/redflag.shtm.
LATEST NEWS
SearchAmerica unveils next-generation service to help hospitals better control patient receivables and increase collections
June 14th, 2010
SearchAmerica Adds new service to help hospitals better manage financial health
May 13, 2010
SearchAmerica HFMA Sunspots Newsletter Article
February/ March 2010
SearchAmerica Releases Touchette Case Study
January 30, 2010
Search America Wins 2009 Tekne Award
October 29, 2009
SearchAmerica Unveils Five E-Learning Modules for Health Care
October 8, 2009
Universal Health Services (UHS)
Implements Efficient and Financially Advantageous Process for Rising
Self-pay Patient Population
August 20, 2009
SearchAmerica
President, Daniel Johnson, Named Ernst & Young Entrepreneur Of The Year
June 30, 2009
SearchAmerica Releases Red Flags
Rule Sell Sheet for Compliance and Legal
June 24, 2009
Experian Acquires SearchAmerica
December 2008
UPCOMING EVENTS
Innovations '10 for Healthcare IT
Siemens Customer
Education Symposium
Gaylord Palms Hotel and Conference Center
Orlando, FL
August 8 - 11, 2010
Maryland AAHAM Chapter
Clarion Hotel,
Ocean City, MD
September 14 - 16th, 2010
NAHAM-NE
Holiday Inn
Stamford, CT
October 18 - 19th, 2010
2010 HFMA Region 9 Conference
Sheraton New Orleans Hotel
New Orleans, LA
November 14 - 16, 2010
Webinars
Predict Cash Collections with ConfidenceJuly 29, 2010 1:00pm CST
.gif){kind=logo}
©2007 SearchAmerica |
