Collections should not be thought of as something that only happens on the back end of the billing process. It should start by properly conveying your policies and expectations in advance to both patients and staff. Here are some tips you can implement in your practice to improve your patient collections at little or no cost.
Office Visits – Front Desk Responsibilities
1) Patients need to understand and acknowledge in writing that they are personally responsible for any charges not covered by insurance. They should be required to sign your financial policy at every visit, not just the first visit in order to remind them of their obligations. This should reduce the number of patients who have the attitude that their insurance made a mistake and it’s therefore not their problem.
2) Of course you always want to collect co-pays at the time of visit, but what does your staff do when a patient says they didn’t bring any form of payment? Turning the patient away is costly both in terms of a wasted appointment slot as well as the potential loss of that patient’s future revenue. Instead, train your staff to introduce themselves by first name to make a connection and then hand the patient a pre-addressed envelope to remit funds when they get home. For example, “My name is Karen and I’ve written my name on this envelope along with our address. As soon as you get home today, please put your check in this envelope and mail it back to my attention as I will be keeping an eye out for it.”
What to include and not include on your billing statements
3) Is your phone # on your bills? This may seem obvious, but some bills do not show a phone # and that delays payment by making it more difficult for a patient to call if they want to set up a payment plan or ask a question about their bill. Now they have to take the time to look up your phone # and they may put that off until later.
4) Is there a due date on your bill or do you just show the date the bill was generated? Many bills do not show a specific due date which implies that payment is due whenever the patient feels like paying.
5) Are penalties specified for violating terms? Is there any consequence to paying late? Why not include a late charge in order to give your bill priority over other bills which don’t incur penalties? A flat late fee is much easier to manage than a percentage of balance.
6) Do you show aging boxes on your statements? The use of aging boxes on statements which show 30, 60, 90, etc balances conveys exactly the opposite of what you want. It shows that you expect your patients’ balances to age and you’ve even made a provision for that right on your statements when you really want to convey an expectation of getting paid as soon as the bill is received. Aging boxes also train patients to only pay the portion of the balance that is the oldest rather than paying off the balance in full.
7) The use of colored paper for late reminders is helpful in getting patients’ attention as they stand out among the pile of white paper in a patient’s stack of bills.
Establishing Internal Collections Policies
8) Just like other aspects of your employee handbook, your collections policies should be in writing. This makes it easier when training new employees and demonstrates the importance placed on collections. Include performance benchmarks ($ collected or # calls made during a specific time period or establish a maximum % of AR over 60 days). Review and update your collections policy as needed while keeping it clear and simple. Determine how returned mail should be handled.
9) Define “past-due” and include the next steps for handling a past-due account. How many written contacts will be sent? How many phone calls will be made? When will this follow up occur and at what intervals? Evidence shows it is best to vary the form of follow up at regular intervals of 7-14 days.
A recommended process would be 2 mailed bills + 1 phone call + 1 warning letter and this should all occur within 90 days or less. If a patient has been asked to pay 4x in 90 days and you’ve gotten no response, they’re sending you a message and need to be in the hands of a third party agency because continued first party efforts at that point will not generate a good ROI.
Making Collections calls
10) Be careful when leaving voice messages so as not to “advertise” a debt owed to your practice when your message might be heard by others in the household. Ensure that your staff is fully compliant with all Federal, State and Local Regulations regarding first party collections and telephone calls, or utilize a service to make these calls for you who is compliant.
11) Try to make a connection with the debtor by speaking clearly and enthusiastically. And stay firm by using phrases such as “It’s my policy that….”
12) Make the call with the mental attitude that you will get payment in full on one call, not that you’re going through a list and making calls just to get it over with. Your mental attitude affects what comes out of your mouth, so expect success!
13) If a patient says they don’t have enough money to pay their balance, ask, “How much are you short?” rather than, “How much can you pay?” This small change in language conveys an expectation that the majority of the funds are available and that you’ll be working out a payment plan for the smaller remaining balance.
14) Never make “idle threats”. It is a violation of collections laws to threaten to send a patient to collections unless using a collection agency is a normal practice for you.
15) Train your collector to take good notes so that if they have subsequent conversations with the patient, you can refer back to their notes and if that staff member leaves, it will be a good starting point for someone else to pick up their work.
Avoid Costly Violations
Use only an employee or a licensed 3rd party agency/attorney to collect for you, never an unlicensed 3rd party. Only use 3rd parties who are committed to full compliance to all Federal, State and Local regulations regarding both first and third party collections. Only use a 3rd party who provides you with a “hold harmless”” agreement as a matter of course.
Do not share information about a balance due with parties other than the debtor or their spouse. For example, if you call the debtor’s office and someone else answers the phone, do not leave a message about a balance due, only a message to return your call.
Prior to discussing any patient A/R information with anyone outside your practice, make sure that you have a HIPAA Business Associate Agreement signed and on file with the individual or agency.
Collection Myths
All of these items are things to consider when establishing your practice’s individual collection policy, but they are not legal requirements.
- There is no law that says you have to warn a patient that you’re going to send them to collections before you do.
- There is no law that says you have to wait a certain number of days before sending a patient to collections.
- There is no law that says that if a patient is paying $5/month that you can’t send them to collections.
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1 ) “Do I need to have a Business Associate Agreements on file?”
What would you do if your patient data was stolen or a fire or flood destroyed your office? Suppose one of your employees opened a malicious e-mail and your patient data was encrypted and held for ransom? I know this sounds absurd, but just Google “data for ransom”. What would be your first step? With most medical records being stored digitally, it’s not a matter of if you’ll experience an incident regarding your electronic patient information; it’s a matter of when.
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