A Delaware-based collection agency will handle billing for millions of dollars in unpaid claims on services provided to a county hospital in California.

Hospital Billing & Collection Services Ltd. will only be paid for the amounts it successfully collects on behalf of Riverside County, Calif.’s Moreno Valley hospital. It’s expected the annual cost of the contract, which runs through June 2020, will be $500,000. The county can cancel the contract at any time, for any reason, with 90 days notice.

According to the contract, the company could reap anywhere from 8.5% to 50% of the billed amounts, depending on the age of the debt. The contract specifies that county hospital staff will continue to manage billing on some accounts. HBCS mostly will be responsible for collecting claims on patient accounts in which $5,000 or less is due.

Riverside County officials estimate up to $4 million a year could flow into the Riverside University Health System’s coffers with the help of the collection agency. 

Health system officials said approximately 76,000 individual accounts will be covered under the HBCS contract, which also stipulates that the collector will be tasked with recovering debt that the county wrote off earlier this year. Those long-unpaid bills total $185 million, according to contract documents.

The agreement recognizes that bill collectors will have to use a variety of methods to recoup past-due amounts but emphasizes that procedures must include a “patient-sensitive focus based on explanation, information and assistance designed to promote positive patient relations.”

The Riverside University Medical Center, formerly known as the Riverside County Regional Medical Center, was declared by CEO Zareh Sarrafian in September to be back in the black financially after several years of running cyclical multimillion-dollar deficits.

The hospital underwent a reorganization that began in the fall of 2013 with the dismissal of former CEO Doug Bagley, followed by a $28 million taxpayer-funded rescue plan in which Chicago-based Huron Consulting Inc. was hired to conduct a top-to-bottom review of the hospital’s operations to find efficiencies and cost reductions.  

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