Patient Account Collections System

Patient Account Collections System

Patients who owe money do not get well! This may sound odd, but it is true.
There was a study done by dentists. To make a long story short, the
dentists were trying to figure out why some people's dentures fit, while
other people's did not. The only thing the dentists could find was that the
people whose dentures were paid for were happy with them. If people
owed money, their dentures never fit! The C.A. who handles finances well
is helping the patient to get well. This module will teach you how to
effectively master the principle of the Collector's Calendar to dramatically
improve your patient account collections.

Course Outline:

Patient Account Collections
• Patients who owe money do not get well!
• There was a study done by dentists who gave out dentures. The dentists
were trying to figure out why some people's dentures fit, while other
people's did not.
• The only thing the dentists could find was that the people whose
dentures were paid for were happy with them. If people owed money,
their dentures never fit!

The Doctor/Patient “Deal”
• Psychologists tell us that when a patient goes to a doctor, there is a
"deal" made.
• The deal is this, "I will pay the doctor a certain amount of money, and she
or he will get me well."
• This is an unspoken deal between the doctor and the patient.
• If the patient pays his money, and doesn't get well, the patient is going to
be upset and the doctor is going to hear about it.

The Other Side of The Coin
• If the patient does not pay his money in his mind he is breaking the deal.
• If the patient gets well now, he is being dishonest and psychologically,
the patient does not want to feel this way.
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• Therefore, the patient is not going to allow himself to be dishonest and
''get better“!

Help Your Patients Get Well
• The CA who handles finances helps the patient get well.
• This is not something to explain to a patient, but it is something you
should understand.
• When a patient runs up a high balance, she’ll avoid coming in out of guilt
or she will decide that she’s not feeling better and will drop out of care.
• The experienced CA realizes handling finances effectively supports
patients in their care.

Paying by the Visit
• Paying by the visit is the least cost-effective way for a patient to pay for
services.
• The cost of treatment should never be a barrier for patient’s who want
care.
• Paying for visits in advance is a much better alternative when allowed by
state law.

The First Visit
• Collections begin on the very first visit!
• Having the patient pay on visit number one establishes the tone of the
future relationship.
• Accept credit cards.
• Have a written Office Financial Policy.

Office Policy
• Make sure you have an Office Financial Policy that covers all scenarios.
• When a patient requests special privileges, be sure your staff members
quote the “Office Policy” as the reason they can not comply with the
request.

The Patient’s Responsibility
• From the very first visit know each patient’s responsibility with regard to
payment.
• If possible get the insurance information before the patient’s first visit.
• Always make a photocopy of the patient’s insurance card.
• If possible verify insurance coverage before the patient is treated.
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The Front Desk
• Make sure the front desk knows exactly what to collect from each patient.
• If the patient leaves the office without paying on the first visit, you are
setting a precedent from which it will be difficult to recover!
• A Dr. Sanna Quote: “You may be the finest physician, but fumble the
finances and they’ll flee!”

Payment Envelopes
• Keep self-addressed envelopes at the Front Desk.
• When a patient states he forgot his checkbook the Front Desk CA can
hand him a self-addressed envelope.
• If you have postage on it already it increases the odds even more that
you will get a check in the mail.

Collector's Calendar
• Learning the principles of the Collector's Calendar is an important aspect
of effective patient account management.
• Once an agreed payment date has come and gone, you are in the
uncomfortable position of working against the calendar.
• This means that you loose a certain percentage of the original value of
an account every day that it's not paid.

Loss of Value
• Collection literature abounds with statistics showing the rates at which
uncollected past-due accounts lose their original value.
• The more time that elapses from the agreed payment date, the less value
the account has and the less probability that you will ever receive the
payment.

Your Disadvantage
• Once an account is past due, you are at a disadvantage.
• The chance of recovering a dollar, 60 days overdue, is only 90%.
• You only have an 80% chance of collecting a bill that is 90 days past
due.
• For accounts that are 180 days past due, you only have a 50% chance of
collecting the money you are owed!

Take Control
• Step one is to realize that time is NOT on your side.
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• Take action, NOW! Don't sit back, hoping the patient will pay.
• In the collections business, there is a sequence of events known as The
Collections Calendar.
• The further down the line you move in the sequence of events on this the
less value that payment due will have for you.

Collector's Calendar
• Invoicing
• First Statement
• Second Statement: Account Past Due
• Third & Final Statement: Account Seriously Past Due
• Demand
• Account Requiring Third-Party Action

Invoicing
• An invoice should be presented at the time of service or sent within ten
days of the service rendered.
• Know which form to use, how to complete the form, which copy to retain,
where to file it, and how and when the invoice is presented.

First Statement: 30 Days
• Most patients will pay at first billing, so it is important for you to get that
bill into their hands as soon as possible - while the value of your service
is still fresh in their mind.
• First statements should never be mailed more than 30 days after the
receipt of services.

Act Quickly
• Get your bill into the hands of the patient quickly! Passing time erodes
the value of your service in the mind of the patient.
• Think of a the last new car your purchased and the pride you felt in
regard to your new possession.
• Now, consider your current regard for your car. Are you as excited about
your car, as you were when you first bought it?

Declining Value
• The perceived value for services rendered, even more than for products,
follows a rapid rate of decline.
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• A service provided to a patient this week has a much higher value then a
month later, when neither the service nor the doctor will have as much
value to the patient.

Second Billing: Account Past-Due 60 Days
• The second statement should be sent no later than 30 days after
presenting the first statement.
• Most patients who did not respond to the first billing will pay within 30
days of receiving a second billing.

Second Billing: Account Past-Due 60 Days
• You must review your accounts on a monthly basis to identify accounts
that are past due.
• Identify these accounts as past due to the patient.
– Use a different form
– Different color paper
– Stamp “PAST DUE”
– Medical Arts Press stickers 1-800-328-2179

Third & Final Billing: Seriously Past–Due 90 Days
• By Definition Accounts Become Seriously Past due at 90 Days.
• When an account is in the “Seriously Past Due” stage, it’s time to get on
the phone and contact the patient.
• If after the phone script, you do not have a satisfactory response, turn the
account over to a collections attorney NOW!

The Fair Debt Collection Practices Act
• The Fair Debt Collection Practices Act was enacted to prevent unfair or
abusive debt collection practices by collection agencies.
• While the law specifically applies to third-party debt collectors, it also
provides guidance if you are doing in-house debt collections.
• If you use a third-party collection agency, it is particularly important to
discuss the law with them to ensure you are satisfied that they are
interpreting and complying with the law appropriately.

FDCPA Guidelines
• Don't call someone before 8:00 a.m. or after 9:00 p.m. (according to their
time zone).
• Don't discuss the debt with anyone except the responsible party.
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• Be sure the patient has agreed to interest rates at the time of service.
• Don't call the responsible party at work without permission.

FDCPA Guidelines
• Don't use misleading tactics to talk to the person, such as implying an
emergency.
• Don't use threatening or intimidating language, or make any kind of false
statements.
• Don't publish or disclose (except to a credit bureau) the names of people
who do not pay their debts.
• Don't threaten action you are not prepared to take.

Demand
• Once you have reached the patient, demand payment in-full.
• Be prepared to clarify:
– The amount of the bill
– Its due date
– The services rendered
• Your ability to answer and deal with these questions enhances your
ability to collect the past due account.

Collections Is Not Personal
• The collections person is upholding the integrity of the office’s policies.
• Always initially demand payment in-full. If the patient does not have the
financial resources to make payment in full, you must arrange a future
date for payment or allow installment payments.
• Keep in mind that by this time in the Collections Calendar the patient has
already established a pattern of broken promises.

Telephone Script
• C.A.: “Hello, Susan?” (This technique lessens the chance that "Susan
isn't home''.)
• Patient: “Yes, This is Susan. May I ask who is calling?”
• C.A.: “Hi, This is Cindy calling from D.C. Chiropractic Center. Do you
have a minute?”
• Patient: “Yes.”

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Telephone Script
• C.A.: “The reason I am calling is that you have an outstanding balance
which is 90 days old, and I am calling to confirm that your Social Security
number is 000-00-0000.”
• Patient: “Yes that's correct. Why are you asking?”
• C.A.: “You have an outstanding balance of $________. It is our office
policy to turn 90 day-old balances over to our Collections Attorney, Mr.
Smith. If you bring the money in this evening before 7 PM, I won't have
to send it, or you can pay by credit card over the phone. Which would
you prefer?”

Telephone Script
• Patient: “Can I mail you a post-dated check?”
• C.A.: “I'm sorry but I can't do that. There is an ATM machine located at
[give address], if that helps you. Otherwise I have no choice but to mail it
to the collections attorney in the morning. Can you come in before 7:00
this evening?”
• Patient: “Yes, I can.”
• C.A.: “Great! I'll see you later. Be sure to ask for Cindy. Thank you!”

Third-Party Action
• At this point you have two choices:
– Legal Action
– Write off the debt as a bad experience…..
– Or a good education.
• In most cases you will turn these accounts over to a collections attorney.
• The key is to make this decision while your money is still worth
something!

Third Party Collections
• At any point following "Demand” you can bring a third party in to go to bat
for you. In most cases, this third party will be a collections attorney.
• Organize the information regarding these accounts before turning them
over to the professional collector.
• There is always certain data, which an attorney will require from you.
Most collections attorneys will be happy to assist you in this task.

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Choosing A Collections Attorney
• Make sure they are in your town, a near by town and most definitely in
your state.
• When your patients receive a collections letter from an attorney in your
town, they know that you mean business!
• Negotiate with the attorney…they may have other areas of law in their
practice and would appreciate your referrals.
• Typical fees are 30-40%.
• Find out the minimum they will pursue.
• Insist on a monthly status report.

Sample Collections Letter

Installment Agreement

Effective Account Management
• Establish an Office Financial Policy.
• Follow the steps of the Collections Calendar.
• Act quickly and consistently.
• Recognize the value of your collections role in the healing process.

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