Revenue cycle management success is at the heart of any healthcare organization, and needs to include an effective and efficient unclaimed property mechanism. The burden of unclaimed property reporting compliancy remains heavy for many medical organizations.
In 2017, the CDC’s National Center for Health Statistics estimated nearly 40% of U.S. adults have high-deductible health plans. Based on a January 2019 Center of Medicare and Medicaid Services analytics report, when you consider about 25% of all U.S. citizens receive Medicare and/or Medicaid with one or more supplemental plans, health care providers continue to struggle for efficient patient administration and revenue cycles. In fact, it is estimated that more than 20% of U.S. households have unpaid medical debt. Patients are seeing higher healthcare costs as the industry continues to evolve. These high medical bills are harder for patients to pay and more difficult for healthcare organizations to collect. Therefore, providers are increasing a patient’s co-payment amount to reduce the expense of resolving outstanding bills.
One would think that providers having patient credit balances due to collecting more coinsurance, copays, and/or deductibles than it earned would be a good thing. Unfortunately, since the collected fees are unearned, it means the health care provider has inadvertently accepted fiduciary responsibility for the funds. In addition to having to safeguard the funds from potential loss, the health care provider is now also facing penalties and interest from the states for failing to turn over the funds as unclaimed property.
For example, Title 6 of the Texas Property Code requires an individual or entity holding property to which it does not have legal claim (the “holder”) to turn that property (the “unclaimed property”) over to the rightful owners by July 1st each year. If the holder cannot locate the rightful owners, it must turn the unclaimed property over to the state comptroller.
In fact, all companies who fail to report and remit unclaimed property on time are assessed interest and penalties from the date the property should have been turned over until the date it is received by the state comptroller. Fortunately, both penalties and interest can be waived by the comptroller if the holder enters into a Voluntary Disclosure Agreement (a “VDA”) and reports and remits the unclaimed property voluntarily. However, once the comptroller initiates an investigation, the holder is precluded from entering into a VDA. Other state unclaimed property divisions have different rules and requirements to follow. Due to the complexity of complying with the ever-changing unclaimed property laws, most companies choose to use built-in compliance software or outsourcing the process.
Author: Barbara Blick
Senior Account Executive
Labels: Unclaimed Property, UP Compliance
