Compensation Structure May be Key to Collector Happiness

Those who have tried to collect medical bad debt and failed will tell you that it’s no easy assignment. Convincing some patients to pay bills they barely understand or put those unplanned medical payments ahead of daily living expenses or other debt such as car loans or credit cards is often difficult, if not impossible.

So why did accounts receivable management firms that specialize in health care debt top insideARM’s Best Places to Work in Collections in 2010?

Employees like Theresa Key, an account representative with Receivable Recovery Partners, LLC (RRP) say it’s not just what her employer does for employees, it’s what it doesn’t do.

Key, a nearly 40-year veteran of debt collections, notes that her supervisor does not impose artificial expectations about revenue goals or micro-manage her work. She also likes that her Indianapolis, Ind.-based employer – the top-ranked agency in the Best Places to Work in Collections 2010 small business category — promotes ethical behavior and pays its employees a set salary.

“Commissions sometimes make it more of a personal thing between a manager and a collector. The manager is trying to control her paycheck and doesn’t stay far enough back from the gray line,” Key said. “If you’ve done collections, you already know what kind of stress is involved. The place where you work can add or detract from that. Where I work, they leave me alone and let me do my job.”

Executives at these firms say management recognizes that most health care debt is not planned and that it may take longer to secure a payment than the average consumer debt. And that requires patience on the part of executive management, collection management, and the collectors.

Shelly Haggard, vice president of sales and marketing for RRP, said collectors often deal with patients who are still recuperating and must explain complicated billing. Collectors also try to help patients discover alternative payment sources, such as supplemental insurance, Medicaid or charity care, which could further delay any payments that are due from the patient. And then there’s the client, whose concern that upset patients won’t become repeat customers, may lead them to impose other conditions on top of federal collection law mandates.

“Health care has a mission to heal the patient. We approach it and feel like when we work with a health care provider we become part of the mission,” Haggard said. “We get into a lot of counseling and working through the situation (with patients).”

In the four years that Receivable Recovery Partners has been in business, only one employee has left the agency, according to Haggard. She admits most of the approximately 25 employees had worked together at Mutual Hospital Services before it was sold. But new hires have been brought in and they are trained to succeed, she said.

RRP’s compensation practices are similar to those at Professional Account Services, Inc. (PASI) and National Patient Account Services (NPAS) – the top two agencies in the large employer category of the Best Places to Work in Collections 2010 program. All three firms also offer employees health care benefits, paid vacation, and personal time off. Bonus structures differ, but are available at all three agencies, while PASI and NPAS also offer some type of tuition assistance.

Haggard said RRP believes employees should not have to worry about what their earnings will be or if they will lose their jobs for not making certain earnings goals. But she admits that it’s easier to pay employees set salaries because the company does not own the debt.

Jim Clarke, vice president of collections at PASI, also said that salary-based compensation puts employees at the Brentwood, Tenn.-based collection agency more at ease to do their job. But the tuition assistance and company-sponsored technology and leadership training programs helped PASI earn the top ranking among large employers in the Best Places to Work in Collections poll the last two years, he said.

“Our employees know that they are not giving up anything to work in the ARM industry,” Clarke said. He added that most employees were not aware the company offered education benefits when PASI first took part in the Best Places to Work in Collections survey, giving PASI low marks in that category. After reviewing their comments, the company provided more information to employees about its education benefits, and more employees have since taken advantage of what it offers, he said.

Clarke said PASI has benefitted from higher employee participation in its education programs that executives did not expect. Employees who took part in PASI’s leadership programs have become more empathic to managers’ decisions, he said.

“When they go through the leadership training, they understand why managers can or cannot do something instead of going off and making up something in their heads,” Clarke said.

The bottom line is that every collection agency, regardless of their specialty, has a responsibility to promote employee morale, Clarke said.

Frank Christenberry, office manager for Indianapolis-based Professional Accounts Service, Inc. (no affiliation to PASI) agreed. Christenberry said the agency, which collects financial services as well as health care debt, can’t afford to offer its employees certain benefits such as paid sick days because the firm works on contingency. However, the company does offer flexible work hours when employees need personal time and other bonuses incentives to attract and retain workers.

“You have to keep the employees happy,” Christenberry said. “Happy employees collect a lot of money.”