How can you, the professional healthcare provider, improve your return on receivables and help ensure that your practice continues to be profitable?
First of all, an estimated 85 percent of all medical services are paid for through credit arrangements. This makes you a credit grantor, much like a department store, Oil Company, utilities and others. You are different in a couple of ways, such as:
In most cases, your “customer” would rather not have to use
Although you make a patient feel better, there isn’t anything tangible to be a reminder of your service.
When it comes time for the patient to pay their bills, yours is often at the bottom of the pile. You are competing with other credit grantors that supplied a tangible product and therefore your collection problem is more difficult.
This is why it’s important to learn as much as possible about your patient and make your credit policy clear before service is actually given. This is when the patient is most likely to be cooperative.
The information you should obtain is as follows:
Patients full name and birth date
The full name of the person financially responsible for the patient, full address, phone numbers for home, work, and a relative.
Social Security number
Present employer, job title, name of supervisor, address, & phone number
Name and address of insurance company
Also, verify insurance information at this time if possible.
PREDICTING POTENTIAL COLLECTION PROBLEMS
Here are some things to look for that will help predict a potential collection problem:
Has the patient had several jobs in a short period of time?
Has the patient moved often?
Is the patient having personal problems?
Does the patient have a phone?
If any of these signals appear, you will want to discuss them with the patient. You might need to determine if this is a hardship case or if you can set up a payment arrangement.
COLLECTION SCHEDULES AND PAYMENT ARRANGEMENTS
Some tips for billing and collections that have worked well for professional credit grantors are as follows:
Ask for payment at the time of the treatment, if possible. If they have insurance, ask for payment of the portion of the bill that will not be covered by insurance.
Provide an itemized statement within 30 days from their visit, if you cannot provide one at the time of treatment.
Send another statement 30 days later. If no payment is received 14 days after the second statement has been sent, send a friendly reminder.
Call if there is no response 10 days after the friendly reminder is sent.
If there is still no response, send a final letter explaining that the account is being placed for collection.
WHAT NOW?
There is a limit to the amount of time and effort that you should spend trying to collect on past due accounts. You will know when you have reached that point if you are not getting any response at all from your patient. You will know that any further collection efforts on your part will be unsuccessful if any of the following occurs:
No response to your statements, letters and phone calls
Missing scheduled payments as per your arrangement, for no reason
Repeated complaints
Starts denying responsibility
Mail is returned and you don’t have a valid address
Marital difficulties
Phone is disconnected and there is no new listing
Job loss
If any of these problems occur, you should place the account for collection immediately, the longer you wait the more difficult it is to collect or locate the debtor.
DOING IT YOURSELF
Some healthcare professionals, hospitals and clinics feel that they can collect past-due accounts themselves. This could save the fee charged by a collection service.
Some of the costs involved in doing it yourself are:
SALARIES – A collection supervisor and collectors will have to be paid.
TELEPHONES – Collectors spend a lot of time on the phone, some of these calls will be long distance.
POSTAGE – Collectors send a lot of notices and verifications of bills and there will be a large increase in postage.
COMPUTERS, SOFTWARE, AND OTHER EQUIPMENT – This could involve a big initial investment. Also, you may need to be able to do some skip tracing, and credit reporting on these patients. TRAINING – Collectors need to know the laws in the state you are located and also follow the Fair Debt Collection Practices Act. They may need to be trained in skip tracing, collection techniques and letter writing.
Things to look out for when collecting yourself:
Make sure your collection staff is thoroughly trained in consumer debt counseling, state and federal credit and collection laws.
Do not spend too much time, which is money, on pursuing accounts that you don’t feel you will collect on.
Have at least one collector who is familiar with small claims procedures.
Michelle Dunn is the author of “Starting Your Own Collection Agency” and “MAD Collection Letters and Forms.” Visit her site at http://www.madagency.com or her online credit and collections community at www.credit-and-collections.com.
