Medical and Dental Debt Collection: How to Improve Your Results

Posted by Marilyn Miller on August 13, 2014  /   Posted in Uncategorized

Health professionals of all types, unless they receive 100% of their payments upfront, will likely have some issue with non-paying patients. Many practices are already using a collection agency or attorney to recover bad debt, but that is basically treating the symptom and not the root cause. Take a look at some basic credit practices and you may find that you are sending fewer accounts to collection.

It is important to require all patients, even friends and family members to not only provide full information to you, but also to review and agree to your financial terms. There are obviously emergencies when there is no opportunity to collect information, but in the majority of cases, the more information you give up front, and the more information you gather up front, the fewer problems you will face down the road. 

This blogpost will focus on the types of actions you can take to reduce your credit risk, and to reduce the number of accounts you have to refer for outside collection. 

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Patient information, and how well you collect it at the beginning of the relationship is key. If at all possible, have patients submit their information to you before they visit. Your best bet is to have all your new patient forms as well as all patient financial information online. Patients can print and bring forms with them, or can submit forms directly to you. If you are going to have forms submitted to you online, please check with your IT provider for security purposes to stay compliant with HIPAA.

With the advent of large deductible plans, communication with patients on their insurance coverage is more important than ever. As time permits, verify insurance coverage and review with patient beforehand. For dental insurance and specialties such as physical therapy and chiropractic care, which may have limits of coverage, review coverage with the patient and ask them to sign that they understand and acknowledge the coverage limits and their financial responsibility. If you take this step, you can avoid many problems down the road.

Document patient payment plans and clearly outline the consequences of non-payment. Keep all financial information separate from medical information. If you do need to refer account for collection or legal action, you want your financial and contractual information separate from protected medical information.

If you are out of network, you must have a written policy to inform patients of that fact. Simply telling patients you do not participate with their insurance is not enough. Patients should be informed and should acknowledge it in writing. If you are billing to non-par insurers, be forewarned that the insurer will likely send payment directly to your patient. We are seeing more and more cases of large checks being sent to the patients, and patients subsequently not remitting payment to the doctor. Patients who are having financial difficulty use the money to pay other bills, and then either have no money to pay the doctor, or want to pay the money back in small payments over an extended period of time. You must have a written policy that informs the patient that they must remit the payment to you within 30 days of receipt. One of our clients has an office policy (once again, written and acknowledged) with non-par carriers that states that if the patient remits the insurance payment within 30 days of receipt, the doctor will accept whatever insurance pays, subject to policy terms (deductible, co-pay, etc). If the patient fails to remit the insurance proceeds, the office will balance bill them. If you implement this policy, you will be surprised how many people get those checks to you quickly!

While we realize how frustrating no-show appointments are, collecting for missed appointments is very difficult. Patients will invariably argue that they gave you notice, and it is difficult to prove that they did not. Your success in collecting this money relies on how well you communicate your policies in advance. Perhaps you can forgive one missed appointment before billing for them.

Your office should have a very clear policy to handle bounced checks. It is against the law to pass a bad check. Check your state and local laws regarding bad checks. You may or may not wish to prosecute bad checks, but you should still follow the laws of your state, which usually require notification via certified mail, and provide a limited number of days to make good on the check. 

Someone in your office should be tasked with focusing on your past due receivables. Have a process in place to send “friendly reminder” letters. Have a process to make phone contact with patients who are overdue. Perhaps time will only permit you to send a letter, or only call the larger receivables, but you will be surprised how much you will be able to collect yourself.

If patients totally ignore your calls and letters, do not delay in referring them for outside collection. Find a collection agency that works with you and respects your patients as you much as you do. Provide all relevant information to your collection partner to help them, including any patient disputes. 

In the end, it comes down to communication and focus. If you communicate your policies to your patients, and focus on a plan to collect from those who are not paying, you will greatly improve your cash flow and be able to put more money back into your practice. 

What techniques are you using to improve your collection results? We would love to hear from you.

Download our free “Ten Tips to Avoid Bad Debt in Your Business” here.

 

 

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