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Debt Management

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Debt Management

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    1. 1 Debt Management 2006-HQ MEDCOM/DFAS-ROME YEAR-END WORKSHOP August 8-11, 2006 Charlene Busanet Charlene.Busanet@amedd.army.mil (210) 221-6812 / dsn:471-6812 Sue Swartz Sue.Swartz@amedd.army.mil (253) 968-2276 / dsn:782-2276

    2. 2 Army Debt Management Debt Mgt Processes Define Responsibilities MSAO Responsibilities MTF RM Responsibilities HQ MEDCOM DFAS-Rome Collections for transferred accounts Example Forms and Regulations Yr-end process Questions

    3. 3 Debt Management Includes debt for Individuals and beneficiaries of State Health Care Programs – (Patient Category: K92) Public Receivables RSC 930 - Individual debtor RSC 93A - Medicaid RSC 93B - State Workman’s Comp RSC 93C - Misc State Pgms ********************************************************************************** RSC 93H - GWOT- Civilian/Contractors RSC 93J - Humanitarian RSC 93K - International Military/Fmbrs Does not include beneficiaries of Federal Programs Direct funding per Resource Summary: Allowance for Doubtful Accounts (AFDA).

    4. 4 Who is Responsible for Medical Debt Management Program? UBO/ Medical Service Accounts

    5. 5 Debt Management Transfer Process MSAO Responsibility Complete “Due Process” Initial Invoice and Receipt 30 days, First Delinquent Letter 60 days, Second Delinquent Letter 90 days, Account eligible for transfer DFAS-IN Reg 37-1, Chapter 17, para 171606 DoD FMR, Volume 5, Chapter 28, para 290202 (OOS Individual Debt Collection Procedures) If MSAO deems collections action futile-Unable to contact the debtor Provide a justification for incomplete ‘due process’ DFAS-IN Reg 37-1, Chapter 17, para 171606(a) MSA Accounts with Health Insurance: Hold account for 6 months. Follow-up with the debtor’s health insurance ‘Due process’ for debtor’s share of debt

    6. 6 Debt Package MSAO Responsibility 1.) Sort debts by FY. 2.) Sort by NAME/SSN - Batch both Inpatient (FRR) and Outpatient (FOR) together. (BATCH by debtor’s medical encounters which can include multiple outpatient visits and admissions.) (Reference: 1854-R Transfer Summary, TAB 1.) 3.) Sort debt packages by RSC 930- Individual Debt 93A- State Medicaid Pgm 93B- State Workman’s Comp Pgm 93C- Misc State Pgm (VOC) 93H- GWOT: Civilians and Contractors 93J- Humanitarian 93K- International Military and/or their Family Members 4.) Sort RSC 930, *93H, and *93K by Dollar Amount of the total ‘batched’ debt. (*Follow GWOT and International Military/FMBRS guidance.) Accounts Less than $225.00 Accounts Equal or greater than $225.00

    7. 7 HQ MEDCOM Debt Packages -RSC 930 accounts, less than $225.00 -RSC 93A, 93B, 93C, 93H, 93J, 93K accounts; all dollar amts. -All RSC Accounts with ‘Bankruptcy Notification’ MSAO Responsibility Debt Package includes: 1 I&R (Invoice & Receipt) 2 follow-up DL (Delinquent Letters) 1 copy of DA 1854-R (Transfer Summary) Maintain original ‘debt package’ and supporting documentation for 6 yr. and 3 mo. DA Form 200 (Transmittal Record) Send DA 1854-R (Transfer Summary) to: HQ USA Medical Command ATTN: MCRM-F (Debt Management) 2050 Worth Road, STE 9 Fort Sam Houston, TX 78234-6009

    8. 8 Debt Package includes: 1 Copy I&R (Invoice & Receipt) 2 follow-up DL (Delinquent Letters) 2 copies of DA 1854-R (Transfer Summary) Certification Statement (DFAS-IN Reg 37-1, Chapter 17, Figure 17-1) Maintain original ‘debt package’ and supporting documentation for 6 yr. and 3 mo. DA Form 200 (Transmittal Record) Send Debt Package with supporting documentation to: DFAS-ROME ATTN: AIEAJB (Debt Management) 325 Brooks Road Rome, NY 13411-4527 DFAS-Rome Debt Packages -RSC 930 accounts, equal or greater than $225.00 -DFAS-Rome forwards accounts to DFAS-Denver MSAO Responsibility

    9. 9 Debt Management HQ MEDCOM Responsibility Manages DM data base-Subsidiary Ledger Completes HQ MEDCOM Form “Debt Management–Document Notification” (DM-DN) for FY03 and fwd years. The DM-DN is used for: (Reference: TAB 2.) Acknowledgment to MSAO that ‘debt pkgs’ are received and processed Notifies RM to record ‘bad debt’ into the accounting records Notifies DFAS-Rome to process J.V. Run Month-end Reports Assists activities with reconciliation of ‘bad debt’ accounts in STANFINS.

    10. 10 Establish two reimbursable cust# and two reimbursable APC’s for each RSC: 930, 93A, 93B, 93C,(*93H, 93J, & 93K). (*Follow GWOT and International Military/FMBRS guidance.) $$COLL - Customer #1-Collection APC(1) – Reimbursable (FAC 8) APC(1) Debt ‘T’ - Customer #2-Collection APC(2) – Reimbursable (FAC 8) APC(2) AMS Bad Debt CONUS: 84779900 AMS Bad Debt OCONUS: 84799900 Establish 3rd reimbursable cust# and APC for RSC 930 Pmt Plan- Customer #3-Collection APC(1) – Reimbursable (FAC 8) APC(3) Used for payment plans established by MSAO Used to record year-end AR estimate Record ‘bad debt’ into the accounting records Receive DM-DN from HQ MEDCOM (Reference: “DM-DN”, (TAB 2.)) Establishing an obligation/earning into the accounting records. 10

    11. 11 Recording the Debt into STANFINS for HQ MEDCOM account MTF-RM Responsibility a.) Record the bad debt expense. EOR = 252G, ODC = 2 Section 1, DM-DN Worksheet received from HQ MEDCOM b.) Input TA23 debit into STANFINS via dbCAS, use SDN beginning with HQS & ending with MEDCOM's Control NO. (Top of DM-DN)  HQS(Position 1-3),#ASN (Position 4-7), FY-The FY of the Receivable (Position 8-9), #####-Last 5 digits DM-DN control no-(assigned by HQ MEDCOM)(Position 10-14). c.) Input TA AV, 11, 1L debit via dbCAS to create the funding and orders to match earnings.(CY ONLY) d.) Input TA 32 via DARS to create accrual & earnings. Note: Reference DFAS-IN Regulation 37-1, Chapter 17, Annex A, Para 6 

    12. 12 Recording the Debt into STANFINS for DFAS-Denver account MTF-RM Responsibility a.) Record the bad debt expense. EOR = 252G, ODC = 2 Section 2, DM-DN Worksheet received from HQ MEDCOM b.) Input TA23 debit into STANFINS via dbCAS, use SDN beginning with HQS & ending with MEDCOM's Control NO. (Top of DM-DN)  DEN(Position 1-3),#ASN (Position 4-7), FY-The FY of the Receivable (Position 8-9), #####-Last 5 digits DM-DN control no-(assigned by HQ MEDCOM)(Position 10-14). c.) Input TA AV, 11, 1L debit via dbCAS to create the funding and orders to match earnings.(CY ONLY) d.) Input TA 32 via DARS to create accrual & earnings Note: Reference DFAS-IN Regulation 37-1, Chapter 17, Annex A, Para 7 

    13. 13 Debt MGT-Transferred Account, Collected or Returned (DM-TACR) MTF-RM Responsibility Reverse all ‘bad debt’ transaction in the accounting records (FY03 and FWD years) When account is collected after transferred by MSAO DD 1131-CCV MSAO request an account be returned to MTF for whatever reason. MSAO E-mail msg. to HQ MEDCOM and DFAS-Rome. Complete the “Debt Mgt-Transferred Account Collected or Returned by MSAO” (DM-TACR) worksheet. (Reference TAB 3.) Process monthly-Due on the same day as the “Last SF1081 Input” from DFAS-Rome STANFINS Schedule” FAX DM-TACR to DFAS-Rome Civ: (315)330-6460/DSN: 220-6460 OR E-mail to DFAS-Rome: DRO-Public-debt@dfas.mil FAX DM-TACR to HQ MEDCOM, ATTN: Debt MGT Civ:(210)221-7880/DSN: 471-7880

    14. 14 DM-TACR HQ MEDCOM Responsibility MTF-RM Responsibility DFAS-ROME Responsibility HQ MEDCOM: Updates the data base. MTF-RM: Input CR TA23 & CR TA32 to the bad debt FAC 8, APC. Process creating a CR Earnings using the following document number: H (HQ MEDCOM account) D (DFAS-Denver account) (position 1.) ASN# (position 2-5) 93# (RSC: position 6-8) YR (FY of the Receivable) MoYR (MO and YR of the Worksheet) EXAMPLE: BAMC returned FY05 Act from DFAS-Denver in July 06: D7415930050706 Input TA AV, 11, 1L for current year only. DFAS-Rome: Process J.V., Input CR TA 40 to the bad debt FAC 8, APC and DB TA 43 to the bad debt customer number.

    15. 15 Debt Management DFAS-ROME Responsibility Facilitate all medical debt package to DFAS-Denver. Ensure debt packages contain all the proper back-up documentation. Ensure debt packages LOA are reflected accurately. Manage all correspondence between MTF and DFAS-Denver. Process all J.V. to complete accounting process upon receipt of the DM-DN or DM-TACR (Reference TAB 2 & 3.) IPAC collections received by MSAO to DFAS-Denver. Process Denver Collections for Public Receivables to MTF (OOSD Coll). Process SF 1081 Coll to MTF. (Notify) MTF-RM of Denver Coll so they can reverse ‘bad debt’ account in accounting records.

    16. 16 Collections received by MSAO after accounts are transferred. MSAO Responsibility First, Where was the debt package sent? HQ MEDCOM DFAS-DE through DFAS-ROME Second, What is the FY of the account transferred? (Debt Mgt procedures changed in FY03) NOTE: Reference: Example DD 1131, TAB 4.

    17. 17 FY 02-Prior Years: Collections for Transferred Accounts to HQ MEDCOM MSAO Responsibility Do not open CHCS to post the collection Deposits the funds into HQ MEDCOM annual appropriation: (Reference CCV, TAB 4.) 97 #(FY) 0130.1881 74-7402 APC/DPI: G930/42 FSN: 041133 with the following 14 digit document number: MD(Position 1-2),#ASN (Position 3-6), ####-Last digits of debtor’s SSN(Position 7-10), MO/YR-Month/Year of the debt(Position 11-14). FAX CCV to HQ MEDCOM, ATTN: MCRM-F (Debt MGT) (Reference TAB 2.) Civ:(210) 221-7880/DSN: 471-7880 Annotate MSG in CHCS with the CCV NO, and date, PAYER, Check NO, and date. 17

    18. 18 FY 03-FWD Years: Collections for Transferred Accounts to HQ MEDCOM MSAO Responsibility Do not open CHCS to post the collection Deposits the funds into MTF’s appropriation; using MTF collection APC and cust#: (Reference CCV, TAB 4.) 97 #(FY) 0130.1881 74-####(ASN) 93#-C (RSC) MTF COLL APC/DPI:________/_____ Cust O:___________FSN:____________ Provide CCV to MTF RM. (RM must complete the “Debt Mgt-Transferred Account Collected or Returned by MSAO” (DM-TACR) worksheet. (Reference TAB 3.)) Annotate MSG in CHCS with the CCV NO, and date, PAYER, Check NO, and date. 18

    19. 19 Collections for Transferred accounts to DFAS-Denver MSAO Responsibility Do not open CHCS to post the collection Deposits the funds into the following appropriation for all FY accounts: 21 F 3875.5104 APC/DPI 5104/46 030093 with the following 14 digit document number: MD(Position 1-2),#ASN (Position 3-6), ####-Last 4 digits of debtor’s SSN(Position 7-10), MO/YR-Month/Year of the debt(Position 11-14). FAX CCV to DFAS-ROME:Civ:(315)330-6460/DSN:220-6460 OR E-mail: DRO-Public-debt@dfas.mil Type the following in the Subject line: OOSD Collection-####(ASN)-###(MTF 3 digit control number) Annotate MSG in CHCS with the CCV NO, and date, PAYER, Check NO, and date. 19

    20. 20 1. DFAS-Denver 2. DFAS-Rome 3. HQ MEDCOM 4. MTF-RM

    21. 21 Out of Service Debt (OOSD) Collections OOSD Collections are collections received from DFAS-Denver for our medical debts. DFAS-Denver IPACs one collection transaction for all accounting years (monthly) to DFAS-Rome at OA level: 97 6 0130.1881 OA: 74 $dollar amount DFAS-Denver will forward a listing with the debtor’s Name/SSN and FY of the receivable w/their IPAC transaction. DFAS-Rome sends copy of list to HQ MEDCOM to identify which ASN the funds apply. HQ MEDCOM returns the listing to DFAS-Rome for processing.

    22. 22 Out of Service Debt (OOSD) Collections DFAS-Rome process a CR disbursement to FAC 8, bad debt, APC with the following document number: OOSDEBTCOLL (STANDARD) #### (MO,YR) of the IPAC TRANSACTION RM- process a CR TA 23/32 to the FAC 8, bad debt, APC for the OOSD collection which process creates a CR TA 52/ Earnings, generating a CR AR. (AV, 11, 1L CY only) DFAS-Rome will process a J.V. (TA43’s) to move the collection from BAD Debt customer number to the GOOD receivable customer number. RM-Process collection in the GOOD receivable customer number. Transaction complete.

    27. 27 Regulations DoD FMR, Volume 4, Chapter 3,“Receivables” DoD FMR, Volume 5, Chapter 28,“General Provision on Indebtedness” DoD FMR, Volume 5, Chapter 29, “Collection of Out-of Service Debts” DoD FMR, Volume 5, Chapter 30,“Debt Collection by Offset” DFAS-IN Reg 37-1, Chapter 17, “Accounts Receivable and Debt Management” DFAS-IN Reg 37-100-**, Chapter 2, “Standard Army Accounting Classification” DFAS Medical Accounts Receivable Slides/Flowchart HQ MEDCOM Annual Year-end Debt Management Memo https://dfas4dod.dfas.mil/centers/dfasin/library/regs.htm 27

    28. 28 Summary Defined Activity/Agency debt mgt responsibilities Collection Process for Transferred Acts Examples of Form Documents Regulations

    29. 29 Questions??????? HQ MEDCOM Debt Mgt POC: Betty Martinez (210) 221-7214 / dsn: 471-7214 Betty.Martinez@amedd.army.mil Charlene Busanet (210) 221-6812 / dsn: 471-6812 Charlene.Busanet@amedd.army.mil DFAS-ROME Debt Management POC: Name:______________________________ Phone NO:__________________________ E-Mail:______________________________ Name:______________________________ Phone NO:__________________________ E-Mail:______________________________

    30. 30 YEAR-END ACCOUNTS RECEIVABLE Year-END Debt Management Requirement Calculate MTF Accounts Receivable Suspense: 15 September, 2006 MSAO and RM Responsibility

    31. 31 Year-end Account Receivable Overview Purpose Calculating Year-end Accounts Receivable Calculating collection rate Calculating CY collections Calculate CY accounts receivable Questions Exercise

    32. 32 Year-end Account Receivable Purpose: To maximize use of funds for MSA, CY, account receivables that are collected after the CY is no longer available for obligation.

    33. 33 Year-end Account Receivable Overview: Includes debt for Individuals and beneficiaries of State Health Care Programs – Public Receivables Individual debtor (RSC 930) Medicaid – (RSC 93A) State Workman’s Comp – (RSC 93B) Misc State Pgms – (RSC 93C) Does not include beneficiaries of Federal Programs RSC 8## - Example: Coast Guard, VA, NOAA, PHS, Medicare MSA Office, CHCS Data Required (Patient Category: K92 / CHCS Sale Code: FRR/FOR)

    34. 34 Calculate Year-end AR

    35. 35 Year-END Debt Management Requirement Calculate MTF Accounts Receivable MSAO and RM Responsibility Calculate previous years collection rate (04 and 05) FY04 Coll (INC) divided by FY04 SALES = Coll Rate FY04 SALES=200K FY04 Coll (INC)=60K 60K divided by 200K = 30% 30% = Coll Rate Calculate CY Anticipated Collections (Good Coll) Multiply CY06 SALES by COLL RATE = CY Good Coll Estimate 06 Sales (FRR/FOR) with an admission date on or before 30 SEP for uncoded records. FY06 SALES = 220K 220K X 30% = 66K 66K = Good Coll Calculate Account Receivable Subtract FY06 Coll (FYTD) from Good Coll CY Coll(FYTD) = 32K Good Col = 66K 66K - 32K = 34K 34K = Account Receivable Record Account Receivable in the Payment Plan Customer NO 35

    36. 36 Year-end Account Receivable FY06 1. Calculate Collection RATE Calculate previous two year collection rate (FY 04 & 05) Rate used to calculate the AR will be the best of the two FY rates. Example: FY04 SALES=200K FY04 Coll (INC)=60K 60K divided by 200K = 30% 30% = FY04 Coll Rate FY05 SALES=200K FY05 Coll (INC)=48K 60K divided by 200K = 24% 24% = FY05 Coll Rate

    37. 37 Year-end Account Receivable 2. Calculate Current Year SALES Annual SALES plus Estimate of un-coded records with an admission date on or before 30 September 06. Does not include beneficiaries of Federal Agencies (RSC 8##) or the new RSC’s 93H, 93J, 93K. Calculate Monthly Average: 11 months 1860-R Total = $220K $220K divided by 11(11months) = $20K (per mo.) ADD $220K PLUS $20K = $240K SALES

    38. 38 Year-end Account Receivable 3. Calculate Accounts Receivable Calculate Account Receivable Need CY (FY06) Collections FYTD (from STANFINS): $32K Estimated: CY (FY06) SALES: $240K Estimated Collection RATE: 30% Example: 30% of $240K = $72K $72K: FY06 Good Collections FY 06 Good Coll minus Coll FYTD $72K - $32K = 40K $40K = Account Receivable

    39. 39 Year-end Account Receivable 4. RM Records AR in Accounting Records September, 15, 2006 Forward AR estimate to MEDCOM POC using FY04 & FY05 collection rate . Charlene.Busanet@amedd.army.mil HQ MEDCOM POC will approve dollar amount for MTF to record AR in the accounting records. MTF/RM records Account Receivable in Payment Plan Customer NO.

    40. 40 Summary Overview Calculate collection rate Calculate CY estimated SALES (service provided.) Calculate CY AR Questions ????? ********************* Charlene Busanet, Staff Accountant HQ USA Medical Command ATTN: MCRM-F 2050 Worth Road, STE 9 Fort Sam Houston, TX 78234 (210) 221-6812 / dsn: 471-6812 Charlene.Busanet@amedd.army.mil

    41. 41 Exercise: *********************** ***********************

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