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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 who feel obligated to let patients/clients go without paying. They feel guilty about trying to collect from someone if they feel that the person is in a financial hardship.

While this is quite altruistic, it is very short-term thinking. These doctors must also understand 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. Another fact that is not commonly known is that failing to pursue a bill and persevere in asking for payment can actually have a negative effect on the patient/client’s self-respect. People expect to be billed, even when they complain. While it can be uncomfortable to deal with objections, realize you are making it possible to help many more patients over the years – and that is worth mentioning to them, as well.

Failing to insist on payment for services rendered can also lower your own esteem, making it harder to collect the next time. 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 always 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.

Here are a few other tips that may help you when dealing with the uncomfortable situation of a patient/client who is saying they cannot make payment:

  1. Believe it or not, smiling is one of the strongest tools you have to deal with uncomfortable topics. Frowning or looking worried can have a subtle but negative effect on the conversation. Smiling naturally in a friendly manner when it is appropriate to do so is the best method.
  2. Speak confidently, concisely, and firmly. Never apologize for your prices.
  3. Listen carefully, but also use silence to control the conversation. One of the most powerful things you can do in a conversation is state your piece…and then shut it. The silence will become uncomfortable for the person, and they will often try to fill it by giving you reasons why they cannot pay. Acknowledge those, and continue to gently insist that a solution is found to make payment.
  4. Stay calm, even if the patient/client gets upset. Your emotions should not give the person any excuse to take offense or try to wiggle around the main topic of the conversation.
  5. Focus on one thing only – the patient/client – when making the calls to collect. Do not multi-task, but instead, concentrate on the person in front of you. This makes them feel important to your practice (which they are), and shows a level of care that can make paying easier to face.

By using these tips, you can gain better control of your collections percentages and thereby the level of care you can provide to future patients/clients. Any staff who deal with collections in your practice should be drilled on a regular basis in how to handle objections, present payment requests, and demonstrate a genuine, caring attitude. Whether you are asking in person before the person leaves, or trying to collect over phone, text or email, these same points apply.

Staff normally dislike roleplaying, and it is too easy to avoid in the busy week. But the reason for the distaste is often only a few simple (and very easy to correct) mistakes on the past of the executive doing the drilling:

  1. Only correct one thing at a time. Letting people have wins is one of the most overlooked, and therefore most important parts of drilling. When your staff first start out practicing objections-handling, they may make many errors all at once. THAT’S OKAY. It’s a drill, not a test. Simply pause the drill, correct just one thing, and have them continue drilling until that one thing is handled. Then take up the next error.

Failing to balance criticism with praise. When staff do something right during a drill, pause and let them know. This reinforces what you want, and in fact can often be more powerful than any negative criticism you might offer. In other words, push the hardest on the thing you want more of.

If you are a practice owner and would like free help regarding collections or any other management topic, we will help you if you help us by doing a 15 minute anonymous interview regarding practice management. Fill out the form to your right, and we will be more than happy to assist you. (highly recommended)

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If you are a practice owner and would like free help regarding collections or any other management topic, we will help you if you help us by doing a 15 minute anonymous interview regarding practice management. Fill out form below, and we will be more than happy to assist you. (highly recommended)









Dealing with a Problem Employee

I received an email from a doctor having a staff problem. I replied to her and thought this might benefit some other people out there. Please see our discussion below:

Hi Ken,

As an employer, how can you tell your employee to stop his/her: gum smacking, not to laugh at the end of each sentence, to stop blowing her nose as everybody can hear it, to stop asserting herself on someone else’s conversation?

I have such a hard time saying something to my assistant about these issues. Everybody in the office is being affected, and I am not happy at all with her. I try my best to tell her what I would prefer from her as an employee, but it hasn’t worked.

Please help me.

Dr. S


My Reply

Dear Dr. S,

There are several things that can help you in this current situation and help prevent this from happening in the future. This is a bit of a lengthy reply due to the nature of your problem. Please take the time to read through this as I believe it will give you some insight into the problem and how to handle it.

The first, and probably the most important thing is to make sure that you have very detailed job descriptions and office policies in place. In your office policy manual, there needs to be written policies about acceptable and unacceptable employee behavior. When new employees are hired, they are given a copy of this policy manual, and they are to read and sign off on them. This lets them know what is and isn’t permitted in your office. They agree to this, and you now have legal recourse for disciplinary action and/or termination for non-compliance.

As new policies are written, a copy is handed out to all employees for them to read and sign off on. These signed agreements are added to their personnel files. These can then be referenced in regular employee evaluations, disciplinary actions, and if needed, termination situations.

If, however, you only deliver your requests verbally, you leave these requests open to interpretation. It is imperative to have everything in writing so that there is no room for interpretation.

The other underlying issue that I see here is hiring the right people to begin with. There are three steps here:

  • Attracting the right kind of employees,
  • Determining who to hire, and
  • Training them to do their job properly after you’ve hired them.

When you are looking to fill a new position, the wording of your ad/listing is key. Where you are advertising is also a big factor. Utilizing employment agencies that pre-screen applicants to your qualifications can greatly increase the quality of candidates that you see, weeding out the lower quality people ahead of time.Determining who to hire is a shot in the dark for most doctors. They read a resume, conduct an interview and take a shot. No one writes on their resume that they are chronically late, don’t take directions well and can’t get along with others. What you see on a resume is only what the applicant wants you to see. Similarly, all you hear in an interview is what they want you to hear. They say the right things or at the very least what they think that you want to hear in order to get the job.

After they are hired they stay on their best behavior until they get comfortable; then, they become themselves. Only then do you know who you’ve really hired.

You need a more objective way to screen and hire people so that you have a better idea of who they are, what kind of personality they have, their responsibility level, their aptitude and their work ethic. Corporations have been hiring people this way for years. Small businesses suffer through much higher turnover rates due to their lack of successful hiring techniques.

Personality tests, IQ tests, Aptitude tests are all implemented to get a feel for who a person really is and how they will fit into your practice and interact with the staff, more importantly your patients.

Once you have hired the right person, you need to make sure that you train them properly. This is where detailed and up-to-date job descriptions and office policies come into play. It is vital that you equip your new employee with the proper tools to do their job rather than throw them to the wolves and hoping they pick up the proper way to do things as they go.

Here is a policy regarding employee performance evaluations. Take a look at this as I think it will give you an idea of the kinds of policies that should have a place in your office policy manual.

To receive “an example policy regarding employee performance evaluations”, please fill out the form to the right. This example policy can help you better understand the exact types of policies that are most beneficial to have in your company’s office policy manual. (highly recommended). Scroll to top

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Fill out the form to receive a policy regarding employee performance evaluations (highly recommended).








Suggestions on Staff Correction

It would be nice if employees never made any mistakes and always did a perfect job. But, we are all human, and mistakes and on-the-job errors are part and parcel of running a practice. That raises the question, what do you do when your staff err and how do you correct them? Here are some suggestions on staff correction.

As part of this overall process you must have written job descriptions and office policies that clearly delineate what tasks a person is responsible for on their job and the overall working guidelines for the office. The reason these are so important is that you use them as part of your correction procedure. Unfortunately, very few practice owners have proper job descriptions and office policies in place.

For starters, if you are in need of correcting a staff member, make sure you know of any specific disciplinary policies that you have issued so that your actions are consistent with these. For example, if your policy states that theft is an automatic discharge, you would not work up the disciplinary gradients and only reprimand someone caught stealing.

The first level of addressing correction is normally directing the staff member’s attention to whatever policy he/she violated, what was not done or what should have been done, all of which is delineated in their job description or in your written policies. Have the staff member reread the policy and/or job description. Ensure that they understand it and clear up any confusions or misunderstandings. This is usually enough to handle the first offense.

On the second offense the office manager or practice owner should review the situation with the staff member and have them sign a copy of the policy or procedure that covers what was violated as an attestation that he/she understands and agrees to the policy and/or job description. We then recommend for you to put a copy of the signed document in the personnel folder of the staff member and give a copy to the staff member to put in their staff binder. One can consider that this constitutes a warning.

On the third offense, we recommend that you do the following: give the employee a written warning, a copy of which goes in their personnel file. Sit down and discuss this situation with them; go over the fact that they’ve been corrected on this twice before; and tell them that, per office policy, continual violations could result in a suspension or dismissal.

Practice owners normally find that this type of action on a third offense either puts a stop to the problem or points out clearly that they have a real problem staff member on their hands and that proper actions, including excellent documentation, will need to be taken in order to suspend or dismiss the staff member for future violations.

What do you do with a staff member that you have corrected three times and who messes up again? You’ve already given them a written warning, discussed that continued violations could result in suspension or dismissal, but you still find them doing it again.

At this point you should check their production record (although you should have done that already as part of correcting earlier violations). Hopefully you have a simple statistical method to keep track of key production metrics for each staff member and the office as a whole so that you can monitor their productivity. If the person is an excellent producer (which is unlikely given that they keep messing up), you might consider the next step to be a suspension without pay for a certain number of days. If the person has a poor production record, dismissal may be in order.

Again, the importance of having proper office policies and job descriptions in place in order to properly deal with staff cannot be overemphasized. You can easily put yourself in a legal quagmire if you attempt to discipline staff without these in place.

We also strongly recommend that you check with a good employment attorney when you are looking at dismissing any problem employee to insure that all of your legal bases are covered.