Back in June I wrote a blog about the challenges of managing legal risk in the consumer contact business.
If you missed the original, check it out here: Tips for Swimming with the Sharks, Part 1.
In that blog, I listed reasons explaining why it’s currently so difficult to manage legal risk in the consumer contact business. With the benefit of more perspective, I’ll start this blog by adding two more reasons to my list:
The court systems have taken consumer protection to such an extreme that any consumer cry of foul – regardless of legitimacy or weight – makes the books. Any burp, fart, or sneeze is now admissible as evidence and must be defended with the same rigor (time, effort, and expense) as any bona fide legal claim.- There is no real recourse against attorneys and/or consumers who misuse or abuse the legal system. Other than the risk of a missed payday, there seems to be no negative consequences for the producers of copy and paste complaints, illegitimate claims, and erroneous fact patterns.
- BTW: lots of luck (you’ll need it) if the plaintiff filing against you is pro se (the plaintiff is representing himself/herself). It seems as if the court systems will now bend over backwards to accommodate pro se plaintiffs – regardless of how off the mark a pro se plaintiff’s complaint might be.
Like I did in my original, I’ll use this blog to pass along business practice tips anyone associated with the consumer contact business should consider adopting.
- Watch for blind spots and execute an excellent handoff. A typical activity in a typical credit/revenue cycle is the movement of customer/patient account records from department to department, creditor to vendor, or vendor to creditor (patient accounts rolling to bad debt and getting assigned to collection agencies as a simple example). The benefit of account movement is: it allows creditors and providers to move accounts en masse to the place best suited to execute the right treatment at the right time (like a collection agency dunning someone who hasn’t paid his or her bill). The hazard of account movement is: it typically breaks continuity in account level storylines. So sticking to our example of bad debt accounts assigned to collection agencies: 1 heavily disputed account embedded inside a standard collection agency assignment of 1,000 accounts will lose its identity and gets treated like the other 999 (the collection agency will assume that all 1,000 accounts are valid debts and execute collection treatments against all 1,000). Here’s what we should do:
- Implement strategies that freezes account movement on problem accounts (see “execute a strategy to quarantine accounts” from my original blog) until any such movement is evaluated and approved.
- Implement alternative routing strategies for problematic and risky accounts that need to move (problem accounts are flagged and the next recipient is ready to receive them).
- Co-manage transparency of information and the game clock. There are two scenarios to consider for this point: 1) a team receives account level information on an account that is no longer under their direct watch (the account has moved to another department or vendor) and 2) a team receives information on an account that is under their direct watch, but the information could adversely impact other departments or vendors (and the host credit granter). In simplest terms: account level information needs to flow to individuals or teams who are about to execute a next action, and/or teams and organizations that could be adversely impacted by said information (get the information to the people that need to know). One other note to this point: time is of the essence. Consider: departments and vendors are typically expected to act frequently and act fast (the longer it takes to get information into the right hands, the more likely it is actions will be executed that wouldn’t have happened otherwise). Additionally (on the time front), it’s important to consider: there are countless rules and regulations with sensitive timetables (time to respond, time to file, time to start or stop, time to remove) – missed deadlines make bad situations really bad.
- Use reciprocal indemnification as a guiding principle. This is hard to promote because I sit on the vendor side of the fence these days (suggesting clients pay is a little sticky). However, I can tell you that when I was part of the credit granter world, I advocated, promoted, and green lighted reciprocal indemnification clauses in vendor agreements. The rules of reciprocal indemnification are fairly simple and straightforward:
- If I make a mistake that adversely impacts you, I cover the cost to defend.
- If you make a mistake that adversely impacts me, you cover the cost to defend.
- In no fault situations that adversely impact both of us, we split the cost to defend.
As always, I’m interested in comments, questions, and additional information. Please feel free to comment this blog and/or reach out to me direct: Ray Stein rstein@varohealthcare.com, 484 459 8723.
