In United States, medical practitioners have been facing an ever increasing problem of patients who get the treatment done, but do not clear their medical bills.
If a medical practice works on a 10% profit margin but say 3% of their patients do not pay, then effectively 30% of their net profit is gone. Actually collecting money from existing patients is more important than getting new patients.
Medical debt collection is the process recovering overdue medical bills from former or present patients. A patient may owe money even if he had insurance but a portion of treatment was not covered by his insurance company. We will cover all the proactive steps which a doctor should take in order to minimize the loss incurred due to these non-paying patients.
# 1. The number one success rule in medical debt collections is early intervention. Have a plan in place for accounts where payment has been past due for more than 30 days. Majority of patients who have not paid you yet are now heading for some serious follow-up and collection efforts from your staff (however they may not well trained to perform the collections activity).
Instead hire a collection agency. Collection agencies exist in United States because you cannot beat their effectiveness, cost and tactics required to collect money from past due accounts. They can collect money diplomatically or intensively per your instructions.
The first step to utilize their “1st Party” written demands service. The cost to send 5 demand letters under your name (or your practice name) is only $15 per patient. Letters are sent weekly, for 5 weeks. They also check if the patient has moved to a new address or if he has filed for bankruptcy recently. In written demands service, the patient is instructed to pay you directly and you get to keep 100% of the money recovered. Can your staff including the overheads (postal, printing, stationary and employee’s own cost.), send 5 letters for $15? The real cost of in-house collections will roughly come to more than $100 per patient.
If the patient has not responded to “1st party” letters, send 5 more letters using “3rd party” written demands service where a collection agency collects money under their name (not your practice). At this point, your patient knows that this case has been passed on to a collections agency and things have become very serious now. The likely-hood of getting a payment increases many fold. You still get to keep 100% money collected.
Of course if the patient has still not paid, lot more intensive efforts will be required now. Forwarding these accounts for the Collection Calls service and finally the Legal intervention makes all the sense.
In this entire exercise it is important to forward non-paying accounts to a collections agency early. Therefore assign the role to someone to execute the plan and every month you should perform an Accounts Receivables review.
# 2. Make sure that your “Patient-Doctor Agreement” form mentions that in case of 60 days (or 90 days) past due, your account can be forwarded to a collections agency and collection fees can be added to his bills.
# 3. You may feel that many of these accounts are not worth your time and you have probably been concentrating on getting new business. You are right, focus on what you are best at and let collection agencies do what they are best at. An experienced agency will attempt to perform the collections activity, simultaneously preserving the good name of your practice and your business relationship with the patient.
# 4. Understand that a significant portion of your patients may have resources to clear your medical bill right away (or in installments), but they may have other bills too ( credit card, other medical bills, etc). The idea is to become their number one priority, so when he decides to pay you are number one on his list. A collection agency is an excellent tool to make that happen.
# 5. Older the medical account gets, harder it becomes to get paid. It’s quite possible that after visiting your clinic, he has accumulated other medical bills too. Debt is a severe problem in United States and once a person is trapped then there are no easy ways out. Recovering past due money is a lot about being quick in the process.
# 6. It is extremely important to hire a collection agency who has a vast experience in the field of medical debt collections.
If you are looking for a collection agency for medical debt collection, contact us.