Revenue Assurance · Part 2 of 2

Before You Hand Your Debtors Book to Your Billing System Provider

Outsourcing A/R collection to the owner of your billing system is convenient — but it raises a structural question worth considering carefully before you commit. Here is what to ask before you sign.

The One Question Worth Asking First

You have a growing debtors book. Your billing system provider steps forward and offers to collect it. They know the system, they know the claim history, and it sounds efficient.

Before you say yes, ask yourself this:

Did the debt arise because my practice was slow to collect — or because my billing system failed to prevent bad claims and late patient billing in the first place?

If the answer is the second option, then handing the debtors book to the same company that owns the billing system is asking the same provider to investigate whether their own product may have contributed to the problem. They may do a thorough job of recovering outstanding balances. The question is whether they will also surface systemic causes that point back to the billing platform itself.

Illustrative example — Double-stage fees: A practice using a per-claim PMA processes hundreds of rejected claims over 12 months — all rejected by a medical scheme for missing authorisation numbers — resulting in approximately R186,400 in outstanding scheme-side A/R. The same provider then offers a collections service at 12% of recovered balances. A submission fee was earned on every original claim. A further fee would be earned on recovery. The root cause — no hard stop on missing authorisation numbers — is a question worth raising with the provider directly.

⚠️ Questions a combined billing-and-collections provider may not surface routinely:

• Were claims submitted without authorisation numbers because the system had no hard stop?
• Were PMB conditions charged to savings because the system had no routing validation?
• Did patients leave without settling co-payments because the system had no liability prompt at booking?
• Were there systematic coding mismatches because the funder rule sets were not kept current?

🚨 Red Flag Action: If the billing system continues to allow weak claims and late patient-liability capture, new receivables will keep forming regardless of how diligently the old ones are chased. The practice enters a cycle of: submit incomplete claims → accumulate A/R → pay someone to collect → repeat next month. That is not revenue assurance — it is a treadmill. The solution is to diagnose first, then collect.

1. Get a Root-Cause Breakdown of Your A/R First

Do not accept a single rand total. Ask for your A/R broken down by:

• Scheme rejections — by funder and reason code
• Scheme underpayments
• Patient co-payments not collected upfront
• GAP cover shortfalls
• PMB-related disputes
• Coding and authorisation-related errors

2. Separate Scheme-Side from Patient-Side A/R

These two categories have different causes and different solutions. Scheme-side A/R points to claim quality and follow-up failures. Patient-side A/R points to what should have been captured at the booking stage. Treating them as a single pile means fixing neither properly.

3. Ask for Your Exception and Override Log

Before you sign anything, ask your PMA provider for the log of all system warnings dismissed or overridden by staff. If the system cannot produce this log, you have no basis for knowing whether your controls were followed or quietly bypassed — and you cannot hold anyone accountable for what happened upstream of the A/R.

4. Confirm These Key Points in Writing

Send your PMA provider a written request for the following — and request written answers:

• What is our current first-pass acceptance rate — the proportion of claims accepted by funders on first submission without rejection?
• What are our top five rejection reason codes over the past 12 months, and which relate to system-level errors your platform should have prevented?
• What is your contractual obligation if it is established that a portion of our outstanding A/R resulted from a deficiency in your billing system's controls?

5. Consider an Independent Collections Partner

You would not ask the same person who performed a procedure to audit the outcome independently. The same principle applies here. An independent collections partner — one with no stake in the underlying billing system — has every incentive to follow the evidence wherever it leads, including into questions about claim quality and system controls. That objectivity is worth something.

On Root Cause

• ☐Do I have a breakdown of A/R by cause — not just a total balance?
• ☐Have I separated scheme-side from patient-side A/R?
• ☐Do I know whether any portion of the A/R was caused by PMA control gaps?

On the PMA's Own Performance

• ☐Have I reviewed my PMA against the controls checklist in Part 1 of this series?
• ☐Have I received and reviewed the exception and override log from my PMA provider?
• ☐Have I asked for the practice's first-pass acceptance rate in writing?

On the Collections Agreement

• ☐Is the collections fee defined as a percentage of amounts actually recovered — not amounts billed?
• ☐Does the agreement include a disclosure obligation if PMA weaknesses are identified during the investigation?
• ☐Am I receiving regular itemised reporting that distinguishes collection failure from billing failure?
• ☐Have I considered whether an independent collections partner would provide more objective root-cause analysis?

Diagnose before you chase. An unpaid account is not always a collections problem. It may be a coding error, a missing authorisation, a PMB misrouting, a patient shortfall that was never disclosed, or a system control that was never built. Each cause needs a different response — and the only way to know which response is right is to diagnose the A/R before you decide how to pursue it.

To enquire about an independent Revenue Leakage Review for your practice: Request a Review →

Back to Part 1

If you missed the first article in this series: Doctor, Your Debtors Book May Be a PMA Control Problem →

Further Reading

Thinking about whether your current billing system is the right one for your practice? SA Billing Systems, Side by Side →

References

• Medical Schemes Act 131 of 1998 — Republic of South Africa
• Council for Medical Schemes — Annual Reports and Billing Circulars
• HPCSA — Booklet 4: Ethical and Professional Rules of the Health Professions Council
• Protection of Personal Information Act 4 of 2013 (POPIA)
• Board of Healthcare Funders of Southern Africa (BHF) — Billing Protocols
• Healthcare Financial Management Association (HFMA) — Revenue Cycle Benchmarking Resources