So often in the management of receivables I am asked the question, is there an amount that is too small?  It almost begs the question that if it is too small, it must be abandoned.  From that standpoint, no amount is too small, but the issue is a larger one.  Let’s say you are a physicians practice.  You have insurance reimbursement and a great deal of co-pays, co-insurance type of accounts, that are less than $100.00 each.  This is the nature of the practice.  You accept insurance, you accept the adjustment required by the carrier and are advised that the insured (your patient) has a portion that must be paid.  There are times when all this can be done in advance, but the usual practice is to bill in arrears.  So now we have many small files.

My initial reaction to small files is “I don’t have time to do this kind of work.  Delegate the small files to another.”  Well in my practice, I don’t have another.  And if we are looking at the puzzle from an Accounts Receivable standpoint, inside the practice, the “co-payment” as advised is an essential element to profitability.  There are a great number of practices that will not accept Medicare or Medicaid.  “Can’t make any money.  The reimbursements are too small.”  So, the co-payment could be the difference between profit and loss, and no business, Doctor, Lawyer or Indian Chief can lose money.  At least not on purpose.

We then are fixed with a problem.  We have 100 files that are less than $100.00 each.  Well, the total of that pile is $10,000.00.  I do not know about you, but $10,000.00 is a lot of money, so figuring out how to get it is critical.  Call them.  One by one.  Call them.  Yes, it takes time.  And yes, I would rather work on ten $1,000.00 files.  If I had my choice, I would always choose the latter.

Let’s say I have a choice.  My answer is “all the files”, and the reason is the entirety of the aging (the list of who owes what to whom by date) is the measurement of the specific practice.  In this case, management of all those co-payments.  Profitability comes to mind first.  Second, and far more important is the impact on the community as a whole.  A practice as described in a geographical impact on a radius surrounding the practice.  In other words, people move away and change doctors.  People do not travel very far, especially when they age.  To disconnect from the small, under $100.00 files would send a message to the community.  “They don’t collect on the co-pays.”  That spells “don’t pay unless we have to.”

Now I am not suggesting that everyone falls in to this category.  The ones that don’t have already paid.  We are talking about over 90 days.  If someone has not paid you in 90 days, they won’t.  Probably because you have sent them some sort of signal that they don’t have to.  Make an appointment for a patient that owes a prior co-pay?

You decide how important $10,000.00 is to you.