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The Georgia Scroll
October 1998
Magistrate Court Process Provides
Quick Cash and Employee Satisfaction
By: Harry Stribling, West Georgia Medical Center
All of us who manage accounts receivable on a daily basis know that we must make a concerted effort to collect every dollar we can before sending our accounts to an outside collection agency. However, many of you are missing a "golden opportunity" not only by returning more dollars to your hospital but also by giving some personal satisfaction to your employees who collect your accounts.
You have probably heard some of your own employees say how frustrating it is to be unable to finalize those lucrative accounts from people who have good jobs, good addresses, and who have been sent statements and demand letters, but who do not respond to your good efforts. It does not have to be that way. Your hospital can begin taking some of those lucrative accounts through Magistrate Court in your county. The procedures for filing a claim in the Magistrate Court are really quite simple. It is the follow-up that will be more time consuming and requires conscientious individuals to keep tabs on payments, judgement dates, and potential garnishment proceedings on individuals who do not comply with your repayment schedule. It will generate much needed cash in a shorter period of time and your employees will feel a special satisfaction from bringing those accounts that were reluctant to pay to a final close. In the following paragraphs, I offer some simple steps to consider before making a presentation to your boss and other members of the senior management team about the Magistrate Court process.
Step 1. Communicate With Employees. First, talk to your own employees who perform the collection task in your hospital. I believe you will find that the majority will be more than willing to get involved. The can also help you with: initial planning related to tracking and follow-up; internal coding to distinguish the legal accounts from other accounts; modification to your existing credit policy if needed; separate filing systems for legal accounts; and help you gain more enthusiasm for the process. I also recommend that you enlist the help of someone to help you who is enthusiastic, conscientious, and can communicate effectively with employees and the general public.
Step 2. Magistrate Court Visit. Make a visit to the Magistrate Court in the county where your hospital is based. It would be a good idea to call ahead to determine a good day and time to make your visit. You should give them your reason for coming and ask to talk with someone who has the best knowledge of the complete Magistrate Court process. If you have someone in mind to help you spearhead this project, take him or her with you. Once you arrive, you will need to get a list of the fees for filing, forms used in the process…specifically "The Complaint and Notice of Suit" and "The Continuing Garnishment Affidavit", detailed instructions on how to fill the forms out, and the waiting period before you will have judgement (generally 45 days from the date they are served with the notice). Filling fees can range from the low $40s to the high $70s or more and are reimbursable to the hospital by the patient or responsible party.
Remember that the Magistrate Court limit is $5,000 in Georgia. Many of your unpaid balances will probably fall within that limit. Be sure to ask the clerks at the Magistrate Court to explain the entire process from beginning to end. You will need to take good notes. After your initial visit, you should have a good idea of the complete process. Please remember to develop a good relationship with the personnel in the Magistrate Court office because they can make your job a lot easier.
Step 3. Seek Administrative Approval. Now that you have completed your preliminary investigation into the Magistrate Court process, it is time to seek administrative backing. Your senior management team is quite aware of the future need for cash with managed care contracts and Medicare bad debt reimbursement eroding away the bottom line. So you are already off to a good start. You will need to explain the Magistrate Court process and tell them who will be assisting you with the process. Hopefully, all of the employees doing the collections will be "on board". If so, you should convey their willingness to get started to the management team. Next I would explain the advantages of the suit process such as: a quicker turn-around of cash than you would get from your own collection agency; collection expense reduction; an increase in employee satisfaction; more control over the collection process in your community. Have some preliminary fugues on cost savings to the hospital. For instance, if you file $100,000 in value to the Magistrate Court and you collect that amount, and you pay your collection agency 33 percent to collect the same amount, you would save your hospital $33,000. Also, when you are collecting your own bad debt you do not fall under the Fair Debt Collection Practices Act (FDCPA). However, I offer a word of caution. The best policy would be to follow the FDCPA to the letter to prevent any future action that may change the scope of the act. If everything seems to be going in your favor, you should seek permission to talk with the hospital’s legal counsel to see what advice they will have for you. If you are permitted to implement the suit process at your hospital, you will occasionally need to be represented in court by your legal counsel. Because the patient or defendant may have their own attorney answer the suit and represent them in court. Never assume that you won’t experience a problem if you try to go it alone. Finally, I think you will be pleasantly surprised that your legal counsel will back you 100 percent.
Step 4. Try It! You’ll Like It! Try it!, you’ll like it!, to borrow a phrase from a well-known commercial. Don’t be afraid of the court process. It is less intimidating than you may imagine. I think you will be surprised at how quickly people will want to clear up a Magistrate Court suit once they have received one. So far as a community reaction, I believe that most members of the community will be pleased that your hospital is doing everything in its power to cut costs.
Finally, you may still have some skepticism about the whole process that may overshadow the many daily problems you already face. The helpful steps above are intended to guide you in the right direction and is by no means a complete guide to everything you need to know. I will be available to any of you to try to answer any questions you may have. Please call me at (706) 845-3881. Good luck and collect that cash!
Last modified: June 22, 2001