12 Steps to Collect Past Due Accounts

Collecting on past due accounts is a function that the Accounts Manager will find herself/himself having to do. Any contact with a patient/client, even under these circumstances, should be kept on a friendly, professional and dignified basis. This will promote respect for the office and its business practices.

Always remember the following points with regard to your patients/clients:

  • Most people have good intentions and want to cooperate with agreements that they have made.
  • Although a person’s account may be overdue, most people still have a good intention to take care of it.
  • Most people prioritize their bills and will first pay those that they feel are most pressing.
  • Most people with past due accounts will pay those bills where someone is actively requesting them to pay.

Bearing in mind the above, your role is to arrange to be one of the creditors that your patients/clients will not delay paying. The following points may be helpful in this regard:

  1. Bill promptly every month.
  2. Ensure that your bills are accurate.
  3. Ensure that you have the original signed financial agreement from your patient/client.
  4. Contact the patient/client as soon as you realize the account has become delinquent.
  5. When you speak with the patient/client, let them know that you believe that they are able to make payment.
  6. Let the patient/client know that you expect to be paid, and refresh their memory on the signed agreement.
  7. Allow the patient/client their self-respect; never back them into a corner, insult or badger the patient/client.
  8. Explain to the patient/client that you want to help him/her work it out so that they can maintain the agreement that they made with your office.
  9. Be prepared to offer some options to the patient/client that they may not have considered.
  10. Be willing to really communicate with the patient/client so that a true understanding and agreement can be reached.
  11. If absolutely necessary, utilize the credit reporting associations. Let the patient/client know that you are planning to do so and that this will go on their credit rating.
  12. As a last resort, utilize the services of a collection agency, and let the patient/client know that you plan to do so.

If you would like more information on collecting past due accounts or any other management topic, fill out the form to your right, and we will be more than happy to assist you. Scroll to top

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Building a Successful Practice Through Efficient Hiring

To build the most productive and profitable practice, having stable staff that work together to accomplish the mission of the practice is vital. Knowing how and who to hire is a key skill. Losing employees who may have seemed appropriate for your team, yet were not actually a good fit, is an enormous hidden expense in a practice.

In fact, based on the typical costs of finding, interviewing, testing, training and getting a new employee fully functioning on the job, turnover costs can equal six to nine months of the salary of the position. If a position pays $3000 per month, your costs could be $18,000 to $27,000 every time the position turns over. Therefore, it’s vital to know how to screen applicants properly in order to hire the best possible individuals for your practice and avoid the stress and high cost of frequent turnover.

Checking References

Checking the references that a job applicant provides is an important but often neglected step in the hiring process. The quality of staff can make or break a practice, so investigate carefully and hire only those whose background indicates that they will be good employees.

Checking references is not always an easy process. Many employers have become reluctant to voice opinions about a past employee to protect themselves from legal or privacy issues. However, you should still do reference checks on any candidate that you consider hiring, to gather any data you can get.

It’s best to check references prior to a one-on-one interview with the applicant since you might uncover information that will eliminate that candidate and save you interview time. If that’s not possible, check references after the interview but before hiring.

Here are some questions you might ask references:

  • How long was _______ employed by you or your company?
  • Can you tell me his/her ending wage?
  • Why is he/she no longer employed there?
  • Was he/she a loyal employee?
  • Was he/she dependable?
  • Do you feel he/she is honest?
  • Would you rehire this person?

Again, a past employer may not be willing to answer some of these questions. The key question is the last one, “Would you rehire this person?” This question is important to ask if the reference person is very guarded or hesitant in giving answers.

Keep in mind that checking references is just one of several vital steps in the hiring process.

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Profitable Communication Systems

Profitable Communication Systems

One of the key elements in running a successful practice is the actual communication level of the practice.

This communication level is not just how people talk to each other. It is important, but there is more to it than just that.

It’s also not how many telephones, computers and email addresses the practice has. How they are used is what is important.

Think of communication as a series of systems or channels. These channels consist of not only the methods, but also the importance and reasons for interchanging ideas, information and knowledge.

These ideas, information and knowledge are the elements that keep the staff and patients in tune with what’s going on in the practice as it relates to them.

It is the quality of these communication systems that make or break a practice.

Let’s take a closer look at some of these communication systems.

The first is the methods and quality of how communications are delivered between the staff and the patients at an organizational service level. These communication channels can be in the form of verbal, policy, dispatch or memo, phone, intercom, emails, etc.

The next and maybe the most overlooked aspect of interoffice communication is the job description itself and how well each staff member knows it.

Often overlooked in job descriptions are the elements of what communications are required, necessary, and important relative to the jobs of other staff and the form these communications should take.

Check your office job descriptions and make sure that they include this vital information

It is also important to include in an office managers job description procedures and policies governing the implementing and maintaining of office communications systems.

The question is, how well and how easily can communication be initiated, relayed and received in the practice and with the patients?

It can be proven empirically that the speed, flow and quality of how well communication can be initiated and received will distinguish a well run and profitable practice from one that is struggling.

Understanding, implementing and maintaining high quality communication systems in a practice is vital to the success of the practice.

Smooth out the communication and watch your practice grow.

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Implementing Communication Systems

This article is a continuation of Profitable Communication Systems. If you haven’t done so yet, we recommend reading the first article to get a better context when reading this one.

In order to have a working, usable communication system, there are several elements that are integral in establishing and maintaining it.

The following is a brief outline of establishing a communication system in a clinic.

First and foremost, you will need an organization chart. This chart does not have to be fancy or elaborate, but it does have to accurately and concisely show who does what in the practice, and it needs to be kept current.

A correctly done organizational chart is scalable. That is to say, it grows with the practice staffing needs and doesn’t have to be redone each time a new hire is made or new position is defined.

The key elements of this chart show, at a glance, which person holds what position in the clinic, which part(s) of the clinic they are responsible for, and at least a summary of functions for each position.

Having this organizational chart is the first key ingredient to establishing a working communication system.

The “Hey, you!” system of management will not work for long as it will create too much stress and confusion and will prevent the clinic from growing.

A copy of this organization chart should be included in each job description.

In each job description, there should also be procedures and policies that explain and govern the use of the clinic communication system. These procedures and policies need to be clear and concise.

These policies should include the form that interoffice communications need to take. For example, dispatch or memo, intercom, verbal, email, etc.

Included in the job description should also be procedures and policies that govern who in the clinic needs what information relayed to them, based on their function, and what information the person themself needs in order to do their job.

Examples:

  • Who needs what info and in what form when a new patient signs up?
  • How do staff members get supplies or things that they need for their jobs?
  • Who they communicate to if they are having some difficulty with their job, etc.?

The physical aspect of a communication system is simply a series of baskets, files, etc., where dispatches and memos can be received and routed. Instructions for using this part should also be included in each job description.

Spending time and energy creating a communication and organizational system for the practice is time and energy well spent. A good, sound communication and organizational system is the foundation of every successful practice.

Questions? Ask the Editor.

If you have any questions or suggestions about this article, please feel free to submit them below. Our editors speak with professional doctors like yourself every day. They would be delighted to hear from you.

Workable Collection Examples and Tips

Workable Collection Examples and Tips

This article is a continuation of The Truth About Collections. If you haven’t done so yet, we recommend reading the first article to get the full picture.

Let me explain. If at the end of your fiscal year you have enough money to pay for everything, i.e., all of your overhead is covered, such as your staff salaries, your mortgage/lease, equipment payments, taxes, etc., any lost income then becomes your own lost personal net income. For example, if you were collecting an average of 93% (5% lower than what should be your standard) with an annual gross income of $650,000.00 ($55k per month), this would equate to a loss of $32,500.00 per year. Over ten years this amounts to a staggering $325,000.00! And that is essentially straight out of your own pocket. This is the equivalent of you working one year or more out of every ten years for free. Many doctors we survey think that “a few percent here or there isn’t that significant.” I hope the above numbers disabuse you of that idea.

With the above in mind, is it now worth it for you to spend the time to train your receptionist and/or collection/finance person on collecting properly?

Here are some tips on things that you can do to increase your collection percentages.

First Contact

When a new patient/client initially calls to make an appointment, the receptionist should keep it as simple as possible for the patient to arrive. So, you want to schedule them in as soon as possible. You want their first impression to be that they feel well serviced. The new patient/client should be informed to arrive early enough to fill out paperwork, so the appointment can happen on time. Payment terms and conditions should not be discussed on the phone with them. You want to make it as easy as possible for the new patient/client to come into the office and not be put off by anything during the initial contact. When they get into the office, you can then go over your financial policies. You should ask them to bring any insurance information that they have should insurance be relevant to the potential treatment. This should include the name of the company, their policy number, what is covered, what their deductible is, etc. Do not worry about having to get into the details of this over the phone and don’t make the patient feel harassed by this. You don’t want to turn the patient off before they even arrive, or they may not arrive. You want the patient to feel friendly and comfortable about coming into the office, but at the same time, you want them to bring any relevant data that they can.

When They Arrive

As soon as the new patient/client comes through the door, they need to be greeted warmly by the receptionist. The receptionist should then supply the new arrival with the necessary forms to fill out. Included should be a form covering your specific payment requirements indicating that payment is due at the time of treatment and/or your insurance agreements and arrangements. If insurance is involved, the form should include a place to provide what insurance they have, how much is covered, what the deductible is and, most importantly, that they will be expected to pay the copay, deductible or anything not covered by insurance at the time of treatment. They should also be told that, unless otherwise agreed upon, you don’t offer billing but will gladly accept cash and most major credit cards. Let them know if you offer financing through companies such as Care Credit, and if they feel that they will require such financial assistance, make sure they meet right away with the person in your office who handles these matters. If you don’t take care of it on the spot, you are likely to be left with a collection problem on this account. Make sure that you require their signature on this form that signifies that they have read, understood and will comply with the financial policy of your office

Once They Have Received Treatment

Validate your patient/client for the good decision that they made to confront and handle the problem that they came to you with. Let them know that they did the right thing and that the investment they made was a good one. Follow up the first treatment with a quality control call, ideally from the doctor, to make sure all went well.

As treatment continues, make sure that everyone in the office continues to reinforce the good decision the patient/client made, and make the patient/client feel welcome in the office.

If you do these things, you will see a turnaround in your collection percentages, and you will see your net income go up.

Questions? Ask the Editor

If you have any questions or suggestions about this article, please feel free to submit them below. Our editors speak with professional Dr’s like yourself every day. They would be delighted to hear from you.

The Truth About Collections

The Truth About Collections

Accounts receivable and collection percentages are a subject that we hear about frequently. Every doctor has a different idea about what a good collection percentage is as well as how to collect money for services rendered.

For example, I have talked to many doctors that feel obligated to let patients/clients go without paying. They feel guilty about trying to collect from a patient/client if they feel that that person is in a financial hardship.

While this is quite altruistic, what these doctors must also understand is that they can’t continue to provide help to their patients/clients if they can’t afford to keep the doors of their practice open. If you provide a service, you should be compensated for it. Period. Unless you go into a situation knowing in advance that it is going to be a charity case – and there is certainly room for that in any practice, as long as it is planned for – you should insist on being paid for rendering that service.

Of course, this is great in theory, but being able to actually collect all monies owed is another story and requires good group coordination and effort. If you and your staff are trained on how to do this from initial contact through patient discharge, including having the proper policies in place with your staff and patients/clients, your chances of collecting at the time of treatment go up exponentially. We believe that you should be collecting 98% or better of what you are producing, minus insurance adjustments. If you are collecting less than 98%, you are losing net income out of your own pocket.

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Extending Credit

Tips to Control Your Accounts Receivable

Following are some guidelines to assist you in determining to whom you wish to extend credit and how to go about collecting on those accounts.

* Assess the patient/client’s credit worthiness before extending any sort of credit. Have them fill out a “credit application” (see sample in the Form section,) and verify the information supplied.

* Always charge for any credit extended, using a monthly percentage or a flat service fee.

* When extending credit of any kind, have the patient/client sign an agreement covering the terms of the credit. Ensure that they fully understand and agree to the terms of payment.

* Monitor all accounts monthly so that you know who may be delinquent. Take immediate action on any account over 30 days past due. The older an account gets, the more difficult it will be to collect. Call the patient/client right away and make arrangements to bring the account current.

* Flag past due accounts by putting a red self-adhesive dot on the upper right corner of the patient/client’s chart folder. In this way it is easier for any staff person to see that the patient/client has a past due account and it will be more likely to get addressed.

* Each day review the schedule for the next day so that you will be prepared to see any patients/clients whose accounts need addressing. Confer with the receptionist on anyone who will need to be seen after their appointment, or from whom the receptionist would collect over-the counter.

* If a patient/client you had planned to collect from has forgotten his/her checkbook or does not have the agreed upon amount, the receptionist should contact the accounts manager or the office manager so that the matter can be addressed.

* Patients/clients with delinquent accounts, who are not making an attempt to handle it, should be sent to a collection agency. Again, this should be done as soon as possible before the account gets too old to realistically expect payment.

* Ensure that statements are accurate and are being mailed out every month on time and without fail. Utilize appropriate labels on the statements such as: Thank you for your payment.”

Steps for Collecting Over the Phone

In any practice, outstanding collections exist. Below are some effective techniques for collecting outstanding payments over the phone.

For starters, whoever is doing this job needs to know that they have a two-fold purpose in this specific job duty:

  1. To bring the patient/client’s account current
  2. To maintain goodwill with the patient/client so that he/she will continue with your practice

The statistics that can be used to measure how effectively the job is being done are:

  1. Money collected
  2. Number of accounts brought current

PROCEDURES

Your telephone technique is very important. Following are some guidelines to assist you in being most effective in dealing with your patients/clients over the telephone with regard to their overdue account.

PRIOR TO THE CALL

  1. Study the patient/client’s account record, and all other documentation to ensure that you have ALL the information necessary to make a complete and accurate call.Spotting a past due amount on your aging sheet and picking up the phone and calling the patient/client, without pre-planning, is not a very good idea, as there may be other information which you otherwise are not aware of. Placing the call without doing your “homework” could result not only in NOT getting paid, but in creating some upset or poor PR for the practice. So study the file prior to making the call.
  2. Know the name of the person you are planning to talk to. Make sure that you have his/her correct and complete name, spelling correct, etc. You want to talk to the person responsible for the account, so ensure that you have that data.
  3. Be in the right frame of mind when you place the call. Think positive. Believe that you are going to resolve the account. Do not call in anger or anxiety. You will get nowhere with your patient/client if you do so. Be cheerful, yet professional.

THE CALL

  1. Introduce yourself and state the purpose of your call. Do not be rushed and hard to understand.Example:
        “Hello, Mrs. Smith? This is Mary Jones from Dr. Nelson’s office. How are you this evening?”

     

    “I am calling you about your account. Do you have a few moments to talk with me about this?”

    “Our records indicate that you have an outstanding balance of $350, and I am inquiring as to when we might expect that payment.”

  2. Be very deliberate in your statement about the account. Don’t mumble or rush through this. Now give them an opportunity to respond.
  3. Do not make them feel embarrassed or as though he/she has done something wrong. Do not verbally attack them. Notice that in the above example it says “our records indicate…” Avoid statements such as : “I’m calling about the $350 that you haven’t paid us for 4 months!” This would definitely get you off on the wrong foot with them, and it would be quite difficult to resolve the situation.
  4. The tone of your voice is very important. Do not be hostile or angry. Do not think of them as a “dead-beat” or a big problem. Think of yourself as a problem solver, and come across that way. They will see that you are trying to help and will be more willing to help in return.
  5. After you have identified yourself and stated the purpose of your call, STOP!! Don’t say anything more at this point. It may seem like forever, but if you wait for the person to say something, it will go much smoother, as they are now having to respond on their own to you on the subject.
  6. Listen to what he/she has to say. Don’t just hear it, but really listen and understand. It could be that they have already mailed the check, or maybe they were planning to mail it that day. If you come on with a harsh demand for payment, you could stop an already intended payment. So give them a chance to talk.
  7. If they resist, throw out objections or are just generally uncooperative let them say everything they have to say. Let him/her know that you understand, and then handle the objection, confusion, or whatever it is by giving them an honest and realistic answer. If you do this, you will get a full picture of what their objections are, and you will have left them with little or no arguments to fall back on once you have handled the objections they put out.
  8. Don’t be brash or punitive. Understand that this is a tough position for him/her to be in. Don’t harass or attack them. Don’t make threats (such as lawsuits) except as a last resort, and ONLY if you fully intend to do so.
  9. Go over with them the fact that it is to their advantage and benefit to make payment. Let them know that the advantages include: not getting turned over to a collection agency, feeling better because an agreement had been worked out, no harm being done to their credit rating, etc.
  10. Bear in mind that everything they have to say might sound very reasonable. But also remember that those “reasonable” explanations are the reason why they are in this bind in the first place. The explanations don’t necessarily handle anything.
  11. Ask leading questions which will bring you to resolution. Many reasons for non-payment are due to real or just “stated” lack of funds. You have to determine what the actual case is, and you need information from them in order to show him/her how he/she can actually pay their bill after all.
  12. Understanding of the situation and how it can be resolved will only occur if you are in good communication with them, and you are truly trying to help. Make your communication really penetrate with the thought in mind that it will be unnecessary for you to ever have to call him/her a second time.
  13. Bear in mind all the time you are talking with the patient/client, that he/she really does have the ability to pay. It is most likely just “inconvenient” for them to pay you in full today. So be persistent. Be realistic. Keep going until you have obtained the results you intended to get.
  14. Normally, you would not want to suggest partial or monthly payments. Only do this if you have determined that it is the only way the patient will be able to make payment. If the patient is already on monthly payments, but behind, the full amount to collect at that time would be the amount it would take to bring the account current.
  15. At the end of the call, in a deliberate and clear manner, again confirm with them what he/she has agreed to do. Ensure that the exact amount and the due date is very clear.

AFTER THE PHONE CALL

  1. Follow the phone call up with a letter confirming the arrangement, and thanking them for taking the time and effort to handle their account.
  2. Keep a very accurate and careful record of the phone call in their file that should include the exact agreement that had been reached during the phone call. In some states it is legal to record the conversation. If it is so in your state, this is advisable.
  3. Set up a tickler system with a calendar or logbook so you know exactly when to expect the payment and exactly when any follow-up call should be made.
  4. When you have done everything per the above, and you get nothing in return, then place the account with a professional collection agency or write off the account.
  5. Notify the patient/client as to what you have done.

The above points should be reviewed and practiced so that the accounts manager feels confident and comfortable with handling collection calls.

SUMMARY

  1. Be well-prepared.
  2. Be professional and treat the patient/client with dignity.
  3. Be helpful, yet persistent.
  4. Make sure that they understand you expect payment.
  5. Help them feel as though they are paying because they want to keep their agreement.
  6. Listen, gather data, and fit your responses to what you hear. Handle each objection.
  7. Discuss holding up service, collection agency, credit rating as a last resort.

Discussing Collection Matters with the Patient/Client

How to be Polite AND Effective

Always assume that a patient/client can afford the recommended treatment when discussing financial matters. Do not be shy, embarrassed or apologetic when discussing these matters. This can give the apparency that the treatment isn’t worth the fee being charged.

When making financial arrangements, the goal should be that the entire fee is paid at the time of service via direct payment and/or use of insurance. You should have a clear financial policy for patients to read and agree to regarding payment of service.

It is important that the accounts manager does not give the patient/client the opportunity to say “no”. Never say, “Would you like to take care of that today?” Instead, give them options that are compatible with office policy. For example:

    “Mrs. Smith, the fee for today is $50. Will you be paying cash or using your credit card?”

“No” is not one of the choices. Remember, if you make clear financial arrangements in the first place, you won’t have any trouble collecting the amount due.

Let us say that there is a misunderstanding and the patient/client can’t afford to pay the entire balance. You could say:

    “Could you tell me how much you are able to pay at this visit?”

The idea here is to get the largest payment possible. Now you need to get the balance.

    “Mrs. Smith, that will leave a balance of $560. We need to work out an agreement on how that will be taken care of.”

When they agree to a definite date for the payment of the balance, put the information on a financial agreement form and have them sign it.

If it appears necessary to extend a monthly payment plan to them, adhere to the payment schedule as governed by office policy. Do not stray from the established policies.

Although it may not occur commonly, you may experience someone who cannot afford monthly payments but does want care. You might consider implementing a “lay-away” plan. In such a case they would agree to send a small amount to you each month (to be credited to their account), and when they have accumulated enough in the account to cover treatment, you would call them to schedule an appointment. This system would certainly require approval from the doctor/owner prior to implementation. This system isn’t ideal as the patient may be putting off necessary treatment, causing their condition to worsen.

When a patient/client has insurance, address payment in this manner:

    “Mrs. Smith, your insurance will cover approximately 80% of this bill. Your portion will be approximately (20% of the total). Would you like to pay cash or write a check today?”

If they say, “I’ll just wait until the insurance pays, then I will pay you”, you might respond:

    “Well, Mrs. Smith, our office policy is that you are responsible for the portion your insurance does not pay. I know from having worked with this insurance carrier in the past that they will cover about 80% of this treatment. Your portion will amount to $120. If your portion turns out to be less, we will certainly refund any overpayment due”.

If they ever become upset about the insurance issue or you feel that they are unhappy, it would be advisable to explain to them the way that insurance companies operate, including how they can delay payments, challenge the treatment diagnosis, etc. You can also remind them that their insurance is an agreement between them and their insurance company (or employer), and not with your office. Most likely, once you have clarified this with them, and they truly understand, you will not have to deal with it again. The best time to discuss this issue of insurance coverage is when they first come in as a new patient/client. Having written financial policies that a patient reads and agrees to ahead of time will alleviate many such problems.

You MUST let them know how much their treatment is going to cost. You should feel comfortable and be able to speak with conviction. If it is at all uncomfortable for you, have another staff member practice with you until you do feel comfortable.

From the Editor: Raising Your Net Profit Through Viable Collections

Do you ever feel that your production seems good, but wonder “where is the net income?” Do you ever ask yourself, “Why am I not taking home more money?” If these thoughts go through your mind, I can assure you that you are definitely not the first doctor to fall into that particular rut as we constantly find this problem from our ongoing surveys of doctors all over North America.

In many practices, proper collections hold the key to a viable net. In this issue of The Practice Solution Magazine we provide information to help you solve collection problems and help raise your net profit. We also provide a step-by-step procedure for your staff to use when calling your patients or clients to collect your fees.

Net can also be affected by conflicts in the office, as well as legal issues and costs.

This issue holds information on conflict resolution by Daniel Bobrow, president of American Dental Company and founder of Climb For A Cause. Climb For A Cause is a non-profit foundation, whose mission is to provide health care treatment and education to people in need worldwide. It seeks to encourage adventure travel, while emphasizing social action, responsibility and accountability. The climb this year is of Oregon’s Mt. Hood in mid-July. If you’re interested in participating, contact Mr. Bobrow using the contact information in the article he wrote for Practice Solution or go to http://www.climbforacause.org. Funds raised from this effort will be used to support dental education and treatment projects in both Guatemala and Cambodia.

We also have another piece by guest writer Dr. Barry Levy regarding legal issues in dentistry, specifically how some dentists are being sued for fraud on certain billing issues.

Net profit for veterinarians is also being hampered by competition from online pharmacies. Staff writer Ken DeRouchie has written an interesting piece on problems veterinarians are having with online pet drug pharmacies and gives some useful recommendations on how to handle the competition. This article was written based upon information Ken gleaned from hundreds of veterinarians he has surveyed for The Practice Solution Magazine.

Within our general news articles, you may find information that can help your practice ranging from news on national legislative issues to technological medical breakthroughs.

It’s quite an eclectic edition of The Practice Solution Magazine this quarter.

Sincerely,

Cory D. Radosevich

Managing Editor