transworld-billing-collectionsCollections is an important part of managing your practice; without cash flow, your practice doors will close in a hurry. In Part I of this blog series, we reviewed 5 key steps you can take at the front end of the process to improve collections. Here are some additional things you should know to improve your patient collections at little or no cost:

Establishing Internal Collections Policies

6) Your collections policies, just like other aspects of your employee handbook, should be in writing. This emphasizes the importance placed on collections and makes it easier when training new employees. Be sure to include performance benchmarks like amount collected, number of calls made during a specific time period or a maximum percentage of AR over 60 days.  Reviewing and updating your written collections policy as needed, while keeping it clear and simple, will benefit everyone in the practice.

7) Clear definitions and parameters are a must. What does “past-due” equate to in number of days outstanding? What are the next steps for handling a past-due account? How many written contacts will be sent and phone calls made? When and how frequently will follow up occur? Evidence shows it is best to vary the form of follow up at regular intervals of 10-20 days.

A recommended process would be two mailed bills followed by one phone call and then a warning letter occurring within 90 days or less. When a patient has been asked to pay four times in 90 days and you’ve gotten no response, they’re sending you a message: This account needs to be in the hands of a third party agency. Any further first party efforts at that point will not generate a positive ROI.

Making Collections Calls

8) Voice messages are helpful; however be careful when leaving them so as not to “advertise” a debt owed to your practice. Your message might be heard by others in the household and therefore violate FDCPA regulations.

9) Staying firm by using phrases such as “It’s my policy that….” while remaining positive is extremely effective.

10) Make the call with the mental attitude that you will get payment in full on one call. Your mental attitude affects what comes out of your mouth, so expect success!

11) 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.

12) 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.

13) Conversation notes are imperative. Train your collector to take good notes so that if they have subsequent conversations with the patient, they can refer back to previous conversations. If that staff member leaves, it will be a good starting point for someone else to pick up where they left off.

Avoid Costly Violations

Use only an employee or a licensed third party agency/attorney for your collections. Never use an unlicensed third party.

Only share information about a balance due with 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.

Collection Myths

While you can establish your own collections policy for your practice, please be aware that there are myths in the industry which are not legal requirements such as:

  • 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.

To learn more about best practices in billing and collections, see Part I of this blog series, and join us for our free webinar: 8 Keys for Optimizing Your Practice Cash Flow on May 21, 2014.