Collections
In a world of HMOs and PPOs, patients are no longer used to paying at the window for services rendered. After paying their co-pay, they expect their insurance company to pay the physician’s bill in full, thereby eliminating the patient’s need to do anything further.
As we all know, payment in full rarely comes from the insurance company. Not only are there co-pays and deductibles, many insurance companies won’t pay their own portion of the claim in a timely fashion either. What to do?
Initial Decisions That Must be Made
There are two basic approaches when it comes to collections in a physician’s office. The first school of thought is: “I do not want to be too aggressive because I want the patient to come back to the office for future visits; and I definitely don’t want a disgruntled patient to talk badly about me, which could make me lose referral business.”
The second school of thought is: “The patient owes me money, and I will take whatever means necessary to collect the debt.”
School of thought number one generally comes from physicians who are non-specialists: primary care, pediatrics, internal medicine, and, more increasingly, OB-GYN. They tend to make their money from a high volume of office visits. Losing one patient who might come to your office for 1-5 visits a year for the next 20 years is significant. Further, there are typically many more primary care physicians in a given community; and, therefore, it is easier for a disgruntled patient to find another office to take care of his or her needs.
School of thought number two comes from specialists and surgeons, who generally have a much higher turnover rate among patients. An orthopedic surgeon might only see a patient or a family member of a patient once in an entire lifetime. Upsetting a patient is much less likely to affect a specialist’s annual income.
So you have to make a decision: do you care if a patient does not come back to your office because of aggressive collections tactics? If the answer is yes, then you need to follow Option One, the less aggressive strategy. If the answer is no, then you need to follow Option Two, the more aggressive strategy.
How to Collect a Debt
In order to actually be able to collect debts, there is one thing you must do before you ever see your patients, whether you are a primary care physician, specialist, or surgeon. You must be sure to insert a certain paragraph in your patient intake forms that patients are required to read and sign. That paragraph explains what happens when the account is assigned to a collection agency and specifies that the patient will have to pay any reasonable collection and attorney fees as well as late charges.
You can find the exact wording of that paragraph for each of the two approaches, along with example agreement forms, in The Doctor’s Wealth Preservation Guide.
In that book, you will also find specific instructions for how to proceed if the patient does not pay his or her bill, complete with sample attorney letters that generally get the desired results, and quickly.
It also covers what to do in third party liability situations, for example after accidents. You don’t have to be at the mercy of insurance companies and their slow payment policies. There are ways to get paid more quickly and to improve the odds greatly that you get paid at all. You will find the necessary instructions in The Doctor’s Wealth Preservation Guide as well.
