The way that healthcare approached patient payers in the past no longer works nearly as effectively as it once did. With the dramatic rise in high deductible health plans (HDHP) and higher co-pays, collecting patient balances quickly and effectively is imperative. The “one size fits all” approach is dead, both in follow-up and collections of slow-pay and delinquents accounts.
Reasons for a patient not paying the bill when due can be varied. Some don’t pay on time because of financial reasons, many times because of the high deductibles in their health plan. Others have the funds but, due to confusion surrounding their insurance policy, aren’t sure the balance is correct. Others are simply too disorganized to remember to find the statement and pay the bill when they have the money. Still others feel that their insurance has paid enough and the practice should be satisfied with that. Some will say, “that doctor is rich, he doesn’t need my money!”
It is a delicate balance that practices must strike to be aggressive enough to motivate the patient to pay the bill without being so aggressive that the practice risks losing what might be a profitable patient in the future. Some practices spend great deals of money with internal follow-up through statements, phone calls and letters, not realizing that each contact with a patient in follow-up internally can cost the practice between $10-12. That expense, not to mention the staff time and attention this takes, can wind up making the whole follow-up proposition more expensive than it is actually worth.
So what is a practice supposed to do?
We, at TSI (formerly known as Transworld Systems) have determined that there are actually four distinct types of patient payers. Each is motivated in a different way to pay the bill, and it is a mistake to treat them all the same. They are:
THE DUTIFUL PAYER
The dutiful payer feels a keen responsibility to pay their debts in a timely manner. They are motivated to pay the bill by the initial statement you send following patient responsibility. Fortunately, they are (or should be) the largest category in your practice.
THE DISTRACTED PAYER
The distracted payer has the very best intentions to pay your bill, but they seem to be so busy and distracted that they misplace your statement or just forget to pay it. Timely reminders are sufficient to motivate them to get that bill paid.
THE DISRESPECTFUL PAYER
The disrespectful payer tries to see what they can get away with, and hope that you will give up trying to collect the bill if they dodge you long enough. They do not respond to your statements, letters, or phone calls. Rather it will take a contact by a third party collection agency for them to be convinced that the practice is serious about collecting the debt. That alone will motivate them to pay, and they will generally pay the bill after they receive the first contact by that third party.
PROFESSIONAL DEBTOR
The professional debtor never intended to pay the bill when they received service. They are likely in collections with other creditors already. These, and these alone, need to be in the hands of professional collectors, familiar with medical debt, before too much time has elapsed and too much money has already been spent chasing them.
TSI offers a free interface that works with virtually all dental software to help you identify which type of category each patient falls into, and tools to communicate with them in an appropriate manner. The practice retains control of each account, and the type of communication that is being used on a particular patient. These tools eliminate the need for the practice to continue time-consuming internal chasing of accounts at a cost that is generally less than they are spending on follow up currently.
For a full description of the tools and services provided by TSI, please call 888-780-1333 to speak to me personally, or email me at david.wiener@transworldsystems.com.
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Tags: a/r, Accounts Receivable, cash flow, Collection agency, collections, Debt, Dental, Financial Services, Healthcare, medical, Medical practice, Patient, Payer, Transworld Systems
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