Paul Arthur Zipp - Page 5

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          maintain a log of the information on the pink slips but relied on           
          the billing services to accurately account for the billing.                 
               Petitioner used three unrelated billing services to collect            
          his fees from patients.  Petitioner used Professional Financial             
          Services from March 1989 until the end of that year; he used Hagy           
          & Hagy until June 1990; and he used Lynx Medical from June 1990             
          until December 1991.  Petitioner resigned from the Highline                 
          Community Hospital effective September 1, 1991, and used                    
          Professional Financial Services to collect the residual                     
          receivables remaining after December 1991.  After petitioner                
          retired, he moved to Roseburg, Oregon.                                      
               The billing services billed petitioner's patients and their            
          insurance carriers, collected the payments, and deposited the               
          payments into petitioner's main bank account at First Interstate            
          Bank (the main account).  For these services, the billing                   
          services billed petitioner a percentage of the receivables                  
          collected, usually 11 percent to 14 percent.  The billing                   
          services collected approximately 50 percent of the gross charges,           
          primarily because of disallowances by insurance carriers.  The              
          billing services sent petitioner lengthy monthly statements of              
          his accounts.                                                               
               Occasionally a billing service would receive an overpayment            
          resulting from payments from both the patient and the patient's             
          insurance carrier.  Petitioner established a separate refund                





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