Debt Recovery

Overdue accounts receivable for the Laundry and Dry Cleaning Service industries is an ongoing problem. Hiring an in-house person to deal with accounts receivable, even with prior experience in the collections industry is still not all that effective because collections are still being done under the name of your laundry company instead of a professional collection agency.

Fact: Customers are incredibly concerned when recovery is initiated under the name of a debt collection agency. They were not so serious when recovery was being made using your own Company’s own name.

Contact us for your professional debt collection needs.

Additionally, collection agencies enroll for expensive “Scrub services” for “Change of Address“, “Bankruptcy” and “Litigious Customer” checks. Enrolling in these services for a standard entity like a Laundry Company is not practical because these Scrubs are too expensive per account. Collection agencies buy these subscription services, and these scrubs are cheaper for them.

Creating internal aging reports, monitoring accounts for delinquency, and follow-up with overdue invoices works well for the first 90 days. Beyond that, there is no point in pursuing recovery under your own name. If a client has not paid in 90 days, what is the possibility that they will pay any time soon ( or ever)? Extremely low!

Collection agencies are licensed and bonded, so if a counter-lawsuit arises, their insurance policy almost always covers lawyer fees and damages filed by the client. They keep their staff up to date with constant changes in collection laws, something which an in-house employee of a laundry company cannot keep up with because he works pretty much in solitude.

Delinquent customers are fearful of an account getting transferred to a Collections Agency. They are concerned that their account could be reported to a credit reporting agency and possibly be transferred for a legal suit. For accounts with higher balances, a collection agency will likely forward the account to one of their national network of attorneys to file a lawsuit.

You cannot win a football match by hiring a single player; you need a full team with varying roles to achieve the desired results. A Collections Agency works as a team, with each debt collection department playing a different role.

In short, an in-house staff has little chance to compete with the recovery rate that a collections agency can achieve. If you include the salary of your in-house employee, printing costs, benefits, mailing, follow-up and all the hidden costs, a collection agency turns out to be a lot cheaper and more effective choice.

Collection Demands Service

The upfront cost for 5 Collection Letters is about $15 per account. Debtors pay directly to you, no other fees. Low cost option. Good for accounts less than 120 days past due.

Collection Calls Service

Contingency fee only. No upfront or other fees. Agency gets paid a portion of the money they recover.  No recovery-No fees. Best for accounts over 120 days. A debt collector calls debtor many times. If everything fails, a possible Legal Suit is recommended by the attorney.

Collections agencies have been recovering money for their clients for decades. Almost no one can beat their efficiency and cost of collecting the debt.

Check here: Cost of hiring a collections agency

Pharmacy Bill Recovery: Protecting Your 3% Margin

In independent pharmacy, the math has changed. With PBM reimbursements often dipping below acquisition cost (NADAC) and retroactive DIR fees squeezing cash flow, the days of “letting it slide” are over.

The hard truth: If your net profit margin is hovering around 1.8% to 3%, you must fill approximately $2,700 worth of prescriptions just to offset a single $50 uncollected co-pay.

You cannot afford to be the community bank. Whether it is uncollected patient deductibles for high-cost specialty meds or a Nursing Home that is 90 days late on their “house account,” you need a recovery partner who understands the unique financial ecosystem of a pharmacy.

The “PBM Audit” Shield: Why You Must Collect

Most owners view collections as “revenue recovery.” You must view it as Audit Defense.

PBM contracts and federal Anti-Kickback statutes generally prohibit the “routine waiver of co-pays.” If an auditor sees a pattern of uncollected balances on your books, they can accuse you of offering illegal inducements to patients.

• The Threat: The PBM can claw back the entire reimbursement (the full cost of the drug), not just the uncollected $20 co-pay. On a specialty Rheumatoid Arthritis medication, a waived co-pay could trigger a $3,000 recoupment.

• The Solution: Assigning these debts to a collection agency creates an irrefutable paper trail. It proves to the auditor that you made a “commercially reasonable effort” to collect, protecting your full reimbursement.

The 3 Hidden Revenue Leaks in Pharmacy

Your “Accounts Receivable” likely hides three specific types of debt. A general collection agency treats them all the same, but a pharmacy specialist knows the difference:

1. The “LTC” & Facility Trap (B2B Debt)

If you service Long-Term Care (LTC) facilities, Group Homes, or Hospices, you likely bill them monthly on “net-30” terms.

• The Risk: When facility ownership changes or an administrator quits, your $15,000 monthly invoice often falls into a black hole.

• The Fix: This is Commercial Debt, not consumer debt. It requires an agency that knows how to pierce the corporate veil and demand payment from the facility’s CFO, not the patient.

2. Specialty Medication Deductibles

You dispensed a $4,000 Hepatitis C drug. The insurance covered $3,000. The patient owes a $1,000 deductible.

• The Scenario: You set up a compassionate payment plan. The patient pays the first installment and then stops answering calls.

• The Reality: You have already paid the wholesaler. That $1,000 loss wipes out the profit of your next 500 routine scripts. These high-balance accounts must be prioritized immediately.

3. DME (Durable Medical Equipment) “Rentals”

If you rent hospital beds, nebulizers, or crutches, you face a unique problem: The equipment is gone, and the payments stopped.

• The Fix: An agency can recover the fair market value of the unreturned equipment, ensuring you aren’t left with a depreciating asset and zero revenue.

Compounding Pharmacies: The “Refill” Trap

Compounding pharmacies face a specific hazard: The Custom Med. Unlike a generic pill you can return to the shelf, a compounded cream is a sunk cost ($80-$150 in labor/materials) the moment it is made.

• The Danger: Patients often order a refill before paying for the previous month. If you ship batch #2 without collecting on batch #1, you are compounding your losses.

• The Strategy: Implement a strict “Collections Hold” policy. Let the agency chase the old debt while you require “Credit Card on File” for all future fills.

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Pharmacies want a collection agency that:

To protect your community reputation while enforcing your bottom line, you need a partner that checks these specific boxes:

• Understands HIPAA is Non-Negotiable: A data breach is more expensive than the debt. Your agency must be SOC 2 Type II certified and understand exactly what “Minimum Necessary Information” means when talking to a debtor.

• Can Handle “Soft” vs. “Hard” Collections:

  • Soft Approach: For the elderly patient who simply forgot her $30 bill. (Diplomatic reminders, preserving the relationship).

  • Hard Approach: For the Nursing Home administrator ignoring a $12,000 invoice. (Legal demands, credit reporting, corporate pressure).

• Offers “Fixed-Fee” Pre-Collection: You shouldn’t pay 30% to collect a fresh debt. Look for agencies offering flat-fee letters (e.g., $15/account) for debts under 120 days old.

• Knows the “Part D” Donut Hole: Agents should be trained to explain why a patient owes money (e.g., “Mrs. Jones, you hit your coverage gap, which is why this bill is higher than usual”). Educated patients are more likely to pay.

• Integrates with Modern PMS: Whether you use PioneerRx, McKesson, or Micro Merchant, the agency should accept digital file uploads to save your techs from manual data entry.

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Stop Turning Techs into Debt Collectors

Your technicians are trained to navigate insurance adjudications and fill prescriptions accurately. They are not trained to have conflict-heavy financial arguments.

Forcing your front-line staff to chase bad debt leads to two things:

1. Staff Burnout: It is a morale killer to ask care-focused staff to play “bad cop.”

2. The “Nice Guy” Write-Off: Techs will naturally “let it slide” to avoid awkwardness at the counter.

Outsourcing creates a healthy separation. Your staff remains the “healthcare heroes,” while the agency handles the uncomfortable financial enforcement.

Frequently Asked Questions

Q: Can we deny refills if a patient is in collections?

A: This depends on state laws and the type of medication. Generally, you cannot deny emergency life-sustaining medication, but you can refuse to dispense purely elective meds or convert the patient to “Cash on Delivery” (COD) status until the balance is resolved.

Q: What about unpaid “House Accounts”?

A: The average independent pharmacy writes off 1.5% of total revenue annually due to unpaid house accounts. If a “loyal” customer hasn’t paid in 90 days, the loyalty is gone. Assigning it to an agency allows you to say, “I’m sorry, our accountant automatically moves old accounts,” diverting the anger away from you.

Q: Is it worth collecting a $40 co-pay?

A: On its own? Maybe not. But in aggregate? Absolutely. If you have 100 unpaid co-pays of $40, that is $4,000 in pure profit lost. Most agencies allow you to “batch” these small debts together for efficient processing.

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Stop filling prescriptions for free.

Serving Pharmacies Nationwide Need a Collection Agency? Contact Us

 

Every year millions of Americans utilize a variety of rehabilitation therapy services. Rehab centers and physiotherapists are vital in keeping our citizens healthy and self-reliant.

Unfortunately, billing is a complicated affair for Rehab centers because there is no uniform standard for how much private insurance will cover. The coverage is vastly different if a patient has a government-sponsored plan such as Medicare or Medicaid.

Moreover, the insurance coverage also varies from state to state, which determines deductibles, co-insurance, co-payments and other payments not covered by the patient’s insurance provider. Then there is a variation in the contractual agreements between various Rehab centers and insurance companies.

Rehab centers and physiotherapists expect payment right after the rendering of services or within 30 days of the billing date.

Need a Collection Agency for Rehab Centers and Physiotherapists: Contact Us

Even though rehab centers explain the billing process to their patients very clearly by providing a breakdown of what is covered by their insurance and what would be there out-of-pocket costs, many patients still cannot pay bills on time. The internal staff of the rehab centers is responsible for making reminder calls and sending repeat invoices by mail. Once a debt is 90 days past due, the efforts of in-house billing departments appear of no use.

The involvement of a professional debt collection agency is a game-changer. Patients are more likely to pay when a collection agency demands the payment versus when a rehab center tries to collect money by itself.

A debt collection agency assists rehab centers by making patients fulfill their obligations by establishing repayment plans, offering various payment options and explaining the consequences of not paying. They send recovery notices to the patient or the guarantor. Recovery efforts include collection calls and litigation if bills are still not cleared despite all the efforts.

Collection Letters Service

The upfront cost for 5 Collection Letters is about $15 per account. Debtors pay directly to you, no other fees. Low cost option. Good for accounts less than 120 days past due.

Collection Calls Service

Contingency fee only. No upfront or other fees. Agency gets paid a portion of money they recover.  No recovery-No fees. Best for accounts over 120 days. A debt collector calls debtor many times. If everything fails, a possible Legal Suit if recommended by the attorney.

The multi-step approach by collection agencies maximizes the chances of recovering money. Collections are performed diplomatically to preserve the relationship between the rehab center and the patient.

Check here: Cost of hiring a collections agency

Physiotherapy, psychiatry, de-addiction, sports & wellness, detoxification and rehabilitation centers must utilize the debt recovery services of a collection agency to recover money from clients who have not paid. They should avoid writing off that debt. Accounts receivable can restrict the cash flow and profitability of these wellness centers.

Contact us for your debt collection needs.

Massage parlors intend to de-stress clients with a gentle touch, but many customers leave behind huge stress in return for these parlors by not paying for the services they just received. Accounts receivable is an ongoing problem for these businesses, and there is very little they can do themself to recover the unpaid bills.

Accounts receivable may also result from a dispute regarding services received, damages, non-payment of recurring charges, bounced checks due to non-sufficient funds, or reversal/dispute of a credit card payment.

Owners of Spas, Salons and Massage parlors have to deal with all the complications of running a small business. The expenses of operating these centers are quite high. Non-payment for the services rendered by just a few customers can induce severe cash flow issues for these businesses.

The internal staff of a massage parlor is not skilled enough to collect money from those tough customers. If you keep proof of the services provided to your customers, then a debt collection agency can be your best partner for recovering money from defaulters. Evidence of services provided to a customer is essential because debt collection laws permit debtors to demand written documentation that they really owe money. If the invoice or backup documentation regarding the debt information is not provided after an account is in collections, all collection activity is stopped, furthermore it can result in many other legal complications too.

Contact us for your debt collection needs.

Information such as –  Debtor’s full name, address and phone are a few essential pieces of information that are also required to initiate the collections process. And, of course all services rendered by corporate or private massage parlors must be 100% legal.

Collection Letters Service

Upfront cost for 5 Collection Letters is about $15 per account. Debtors pay directly to you, no other fees. Low cost option. Good for accounts less than 120 days past due.

Collection Calls Service

Contingency fee only. No upfront or other fees. Agency gets paid a portion of money they recover.  No recovery-No fees. Best for accounts over 120 days. A debt collector calls debtor many times. If everything fails, a possible Legal Suit if recommended by the attorney.

 

Check here: Cost of hiring a collections agency

 

Being an avid golfer and working in the collection industry for the last 22 years, it wasn’t long enough that I started to find so many similarities between the two.

1. Practice and Patience

Like Golf, debt collection is an art that requires sufficient time to learn and improve the game. Then there are days when we have excellent collection results and others when nothing seems to be working, precisely similar to the day-to-day fluctuations we experience in golf.

Keep your patience, continue to introspect, and stay focused. Put up a smile, clear your head, and start your next call with a positive attitude.

Do you need a Collection Agency for your Golf Course? Contact Us Golf courses have huge operating expenses. Their accounts receivables may include recovery from contractors (pavers, cart repairers, etc), credit card reversals, unpaid membership fees, damages and more. You must keep a signed contract/receipt/invoice to support the debt.

2. Play Smarter, Not Harder:

Apply too much force in the game of golf, and your shots start to go haywire. A successful debt collector needs to have an acute presence of mind. He should know how to handle the call based on the responses they get from the debtor and somehow make him pay. Smart and straightforward tactics work far better than brute force and anger.

Best collection rates in the industry are achieved with good acumen and the presence of mind, not by simply pushing too hard or blindly sticking to a script that your boss has given you.

3. Never use a Driver for shorter shots.

When your ball is 90-120 yards away from the hole, we use Irons, not the Driver. Suggesting the right product to the client is very important.

Low-cost collection letters are more suitable for debts that are no more than one year old. Collection calls are suitable for accounts over that limit and Legal suit as a last resort. Suggesting the most optimum solution to your client will lower their collection cost,  and make them stick with your agency for a long time.

4. Concentration:

Before starting a collections call, remove your mind from those daily “Breaking News”, forget about your social media conversations, and put the phone aside. Everything that can potentially distract you during your conversation with the debtor.  Exactly what my golf trainer says … Stay focused – razor sharp.

5. Control of Emotions

Debtors deal with crappy calls all day long. It is crucial to control your emotions, most importantly your anger. Just like in golf, the game is all but over once you are agitated.

6. Short Game is more important:

Every collection call need not be a 10+ minute conversation, probably only in those cases where the outstanding debt is too high. Time is money for debt collectors. It is important to remember that you are not working to hear long stories of your debtors but to collect debt in optimum time.

The idea is to reach the target in a minimum number of shots. Similarly, in Debt Collections, the idea is to recover maximum money with the minimum number of contacts.

7. Buy a good golf set: Not the cheapest one, not the costliest one

You can buy a bargain golf set for as low as $200. But most of us know they are not too good. They will likely spoil your game. There is a reason most people buy branded golf sets like TaylorMade, Callaway, Titleist, Ping etc. These golf sets have the appropriate design, metal and technology to get the best shots. A golfer does not need to break the bank, but a decent branded set will come between $500 to $1000.  This will improve your game and accuracy and last you for many years.

Similarly, never go for a collection agency just because it has the lowest fees. Good collection agencies invest a lot of quality manpower, technology, and services to provide maximum returns. So even if you have to pay 10%-15% extra for a better collection agency, go for it. Higher returns will make that little extra investment/fee look minuscule.

If you are looking for a good collection agency: Contact Us

 

Why Smart Collection Letters Are the “Secret Weapon” of Debt Recovery

In a digital-first world, it is easy to assume that an email or a text message is the fastest way to get paid. While those tools have their place, the physical collection letter remains the heavyweight champion of debt recovery.

Why? Because a professional collection letter is more than just a piece of paper. It is a legal instrument, a psychological trigger, and—when done correctly—a data-driven tool that locates debtors who are trying to hide.

Note: Consumers can easily use technology to block debt collector’s phone calls, but they cannot block the US Postal Service from delivering mail to their physical address. This ensures your demand letters bypass digital filters and establish the mandatory “paper trail” required for legal notifications and future escalation.

Here is why upgrading to a professional third-party letter service is the most cost-effective move you can make for your bottom line.

1. The Power of “Smarter” Mail (Data Scrubbing)

One of the biggest reasons internal billing fails is that you are often mailing invoices to a “dead” address or pursuing a debtor who legally cannot pay.

We don’t just stuff envelopes; we run your accounts through a sophisticated data scrub before a single stamp is used. This “Smarter Mail” approach includes:

• Change of Address (NCOA) Scrub: People move frequently, often to avoid debt. We run your list against the USPS National Change of Address database. If your debtor has moved, we find their new address automatically, ensuring your demand lands in their hands, not an empty mailbox.

• Bankruptcy Screening: Trying to collect from a debtor who has filed for bankruptcy is not just futile; it’s illegal. It violates the “Automatic Stay” and can lead to severe fines. We screen for active bankruptcy filings before we mail, saving you the cost of the letter and the risk of a federal lawsuit.

• Litigious Defaulter Check: Some professional debtors make a living by trapping businesses into technical violations of collection laws and then suing them. We identify these habitual litigants upfront, allowing us to handle their accounts with extreme caution or advise you to close the file to protect your business.

2. The Psychological Shift: From “Vendor” to “Creditor”

When a customer sees an envelope from your business, they see a familiar vendor they can negotiate with or ignore. When they see a colored envelope from a third-party agency, the psychological dynamic changes instantly.

• Breaking the Cycle: A third-party letter signals the end of the “service” phase and the beginning of the “recovery” phase. It creates a sense of urgency that a standard “Past Due” stamp simply cannot match.

• The “Paper Weight” Effect: An email can be deleted with a swipe. A physical letter sits on the kitchen counter or the CEO’s desk. It occupies physical space, serving as a tangible, nagging reminder that the debt is real and is not going away.

3. Compliance and the “Paper Trail”

In the event of a dispute or future litigation, documentation is everything.

• FDCPA Compliance: The Fair Debt Collection Practices Act requires specific disclosures (the “Validation Notice”) to be sent to consumers. Our letters are drafted by legal experts to ensure strict compliance, protecting your brand from liability.

• Proof of Diligence: If you eventually decide to sue a debtor (Step 4), you must prove you made every reasonable effort to collect. A series of documented, professional demand letters provides the court with irrefutable evidence of your due diligence.

4. By the Numbers: Why Print Performs

Data consistently shows that physical mail cuts through the digital noise.

• 100% Delivery Potential: Unlike emails which are often blocked by spam filters or buried in “Promotions” tabs, physical mail has a 100% deliverability rate to valid addresses.

• Higher Engagement: Studies show that direct mail has a significantly higher cognitive engagement rate than digital media. People spend more time reviewing a letter than they do scanning an email.

• 70% Resolution: When accounts are sent to us between 60 and 90 days past due, our flat-fee letter service resolves roughly 7 out of 10 accounts without ever needing to pay a contingency fee.

5. Stop Wasting Equity on High Fees

The old way of collecting—waiting 6 months and then handing over 50% of the debt to an agency—is a bad deal for you.

• The Flat-Fee Revolution: Our Step 1 & 2 service allows you to send these powerful, data-scrubbed letters for a fixed cost (e.g., $15 per account).

• Keep Your Money: If a $5,000 debt is paid after receiving our letter, you pay $15, not $2,000. You keep the equity where it belongs: in your business.

Providing Flat-Fee Services Nationwide Need a Debt Collection Agency? Contact Us

Take the Next Step

Stop sending invoices into the void. Use a system that cleans your data, protects your legal standing, and demands attention.

Click here to Contact Us and upgrade your recovery strategy today.