Saturday, October 4, 2014

Billing Companies, Collections, and the Economy

Earlier I wrote a post about the trouble my sister's radiology practice was having with their billing company.  For some reason they could never understand, the billing company was unwilling to pass along the money it owed them.  They never figured out what the problem was, and at the time I wondered if Obamacare regulations had screwed up medical billing.  I'm starting to re-think what might have been going on with that situation as my university has recently had some problems with billing.

About a week ago, I got an email from the company that does our DNA sequencing that they did not receive payment for several orders.  After I inquired about it, I found out the university did pay the billing company that handles payments for the sequencing company.  Several other labs at the school received similar notices.  The sequencing company specifically mentioned they didn't get their money from the billing company, so it would appear the billing company is at fault here.

When I found out what the situation was, I couldn't help but notice the similarities between this and the one my sister experienced.  I'm wondering what the overlap might be, if there is any.  I tried to look up the billing company to see what kinds of accounts they handle.  I was curious to see if they do medical billing too, but I couldn't find out anything about them.  It's possible they do medical billing too, and their problems stem from that.

Of course the big question is why these billing companies aren't passing along the money.  For some reason, they're in such dire straits that they're holding on to what money they can and trying to extract it from whoever they can fool into overpaying.  If the problem is Obamacare, then at least the problem is regulatory and confined to the medical/scientific sector.  What really worries me is the fact the problem might be more general economics.  I worry that there is just no money out there for these companies to collect, and that is why they are acting the way they are.  If this is true, then the economy is undoubtedly much worse then the media and our politicians are letting on.

In the email I received from the billing company, they said if we didn't settle our accounts, they would report our debt as outstanding.  It made me remember this story that stated 1/3 of Americans have an unpaid debt in collections.  The story contains a map that shows the region by region data. When the story broke, many commenters made a point that the South has more people with debt in collections then other areas of the country.  I wonder how accurate some of the data is, as the map appears to show that Detroit isn't actually too bad about paying its debts.  This would be the same Detroit that had a major controversy over unpaid water bills.  The same Detroit where half the residents don't pay their property taxes.

It should be noted the story about unpaid debts only concerned those actually reported to collection agencies.  A lot of businesses might not report debts if they believe there isn't much chance of getting their money.  I had an uncle who had this attitude with his medical practice.  As a consequence, regions that are horrible about paying their debts might not actually show it in certain data.  I wonder if there's a similar dynamic occurring with the billing problems I'm seeing with our sequencer's billing company.  They've been hopelessly stiffed by so many other companies they are trying to go after any business that has money.  The big question I have is, what makes them think universities have money?  We're in the middle of a higher education bubble.

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