County Hospital to Use Professional Agency to Collect Patients' Debts

By PAUL YOUNG, City News Service:

Riverside County supervisors this week approved a contract with a Delaware-based collection agency to handle billing for millions of dollars in unpaid claims on services provided by the county’s Moreno Valley hospital.

In a 5-0 vote without comment, supervisors signed off on the proposed agreement with Hospital Billing & Collection Services Ltd. for the current fiscal year through June 2020.

The contract leaves the county the option to cancel services at any time, for any reason, with 90 days prior notice.

The anticipated annual cost of the contract is $500,000. However, that amount is based on projected billing windfalls. HBCS will only be paid for the amounts it successfully collects on behalf of the county. According to the contract, the company could reap anywhere from 8.5 percent to 50 percent of the billed amounts, depending on the age of the debt.

County officials estimated up to $4 million a year could flow into the Riverside University Health System’s coffers with the assistance of the collection agency.

The contract specifies that county hospital staff will continue to manage billing on some accounts. HBCS will be mostly responsible for collecting claims on patient accounts in which $5,000 or less is due.

Health system officials said roughly 76,000 individual accounts will be covered under the HBCS contract, which also stipulates that the collector will be tasked with recovering “legacy” debt that the county wrote off earlier this year. Those long-unpaid bills total $185 million, according to contract documents.

The agreement recognizes that bill collectors will have to use a variety of methods to recoup past-due amounts but emphasizes that procedures must include a “patient-sensitive focus based on explanation, information and assistance designed to promote positive patient relations.”

The Riverside University Medical Center, formerly known as the Riverside County Regional Medical Center, was declared by CEO Zareh Sarrafian in September to be back in the black financially after several years of running cyclical multi-million-dollar deficits.

The hospital underwent a reorganization that began in the fall of 2013 with the dismissal of former CEO Doug Bagley, followed by a $28 million taxpayer-funded rescue plan in which Chicago-based Huron Consulting Inc. was hired to conduct a top-to-bottom review of the hospital’s operations to find efficiencies and cost reductions. An interim CEO -- nationally renowned healthcare strategist Lowell W. Johnson -- took the helm.