It’s a problem faced by virtually every dental practice – how to deal with patients who pay their bills late, or not at all.
While patients expect prompt and professional service, they don’t always meet the same standard when it comes to paying their bills.
Accounts not paid within terms can severely impact the cash flow of a practice. A clearly defined and carefully communicated, yet diplomatic payment policy may help avoid difficult collection situations.
Following these 10 simple steps can dramatically improve your results.
Have a defined credit policy
The first step is to clearly define when accounts are to be paid. If patients are not informed that accounts are to be paid on time, chances are they’ll pay late or sometimes not at all.
Make sure your practice’s terms of payment are clearly stated in writing to each patient.
Invoice promptly and send statements regularly
If your practice doesn’t have a systematic billing system, get one! Many times the patient hasn’t paid simply because they haven’t been billed or reminded to pay in a timely manner. This situation frequently occurs in smaller or newer practices where there isn’t enough staff to handle invoicing and billing.
Use “Address Service Requested”
One of the most difficult collection problems is tracking down a patient who has “skipped” or moved without informing your practice of their new address. Any statement you send to the patient should have the words “Address Service Requested” printed or stamped on the envelope just below your practice’s return address in the top left corner.
If a statement or invoice is sent to a patient who has moved and the words “Address Service Requested” appear on your practice’s envelope, the post office will research this information. If they can locate a change of address for that patient, they will send your practice form #3547 with the correct address for a small fee. This also keeps your practice’s patient address file up to date.
Contact overdue patients more frequently
No law says your practice can contact a patient only once a month. The old adage, “The squeaky wheel gets the grease,” has a great deal of merit when it comes to collecting past due accounts. Contacting late payers once per week will enable your staff to diplomatically remind the patient of your practice’s terms of payment.
Use your aging sheet, not your feelings
Many practices (or well-meaning people on their staff) have let an account age beyond the point of ever being collected, because he or she, or even the dentist, “felt” the patient would pay eventually. While there certainly are isolated cases of unusual situations, the truth is that if your practice isn’t being paid, someone else probably is. So stick to your practice’s systematic plan of following up. Soon it will be apparent who intends to really pay and who doesn’t. Appropriate action can and should be taken once you know where your practice stands.
Make sure your staff is trained
Even “experienced” staff members can sometimes be jaded when dealing with past-due accounts. This usually occurs when the patient has made and broken promises for payment. Make sure the staff is firm, yet courteous when dealing with them. Your practice’s collection staff may benefit from customer service training because, in effect, they must “sell” your patient on the idea that your practice expects to be paid. Make sure that your practice’s collection staff is trained to not only bring the account current, but to also maintain good will.
Admit and correct any mistakes on your part
Sometimes patients don’t pay because they think your practice has made a billing error, and if that’s the case, quickly admit it and correct it. Generally, patients realize that mistakes can happen in business. Unfortunately, some patients believe the dentist doesn’t need the money. Denying an obvious error only feeds the fire of resentment your patient may already feel.
Follow the collection laws in your state
In many states, businesses are governed by the same collection laws as are collection agencies. For example, calling to collect on an account at an odd hour or disclosing to a third-party that a person owes your business money are just a couple of the collection practices that can cause serious repercussions. Contact the Wisconsin Department of Finance for any clarification on the collection laws.
Use a third-party earlier
If your practice has systematically pursued a past-due account for 60-90 days from the due date and it still isn’t paid, the patient is obviously sending you a message. More than likely, your practice’s staff has requested payment four to six times in the form of phone calls, letters and statements. The time and financial resources budgeted for internal collection efforts should be focused within the first 90 days when the bulk of accounts can and should be collected. From that point on, a third party can motivate a patient to pay in ways your practice cannot, simply because the demand for payment is coming from someone other than your practice. Avoid paying a percentage to a contingency collection agency, using a small claims court or hiring a collection attorney by utilizing a flat-fee collection service. By using account receivable management services, you can save your practice time and money and dramatically increase your cash flow.
Remember nobody collects every account
Even with a carefully designed and administered collection plan, there are a few patients that will never be collected. Save your practice time and money by identifying these accounts early. At the same time, your practice will benefit from the improved cash flow from the vast majority of patients that do pay.
Developing and implementing a sound collections policy is a vital part of running a successful practice. Follow these 10 steps and watch your practice thrive while maintaining a good professional relationship with your patients.
Transworld Systems is endorsed by the WDA.
To learn more call 608-276-8307 or visit http://web. transworldsystems.com.