In our last post, we discussed some ways to organize your receivables system to make sure that you get off to the right start to control past due amounts and deal with any amounts that may become delinquent.
But what about a situation where you initially did not have a plan or execute a plan? The aging analysis has never been reviewed, there’s been no follow up, patients are seen without regard for their financial status. The assumption is that everything will work out OK. And in a lot of cases, you don’t know what to collect because you have no idea what is owed. That’s certainly not an ideal situation, but fear not. Do not abandon hope. The situation can be salvaged and turned around.
Take the following steps as soon as humanly possible:
Do your best to organize your data
We’ve seen a lot of cases of extreme disorganization. Offices using only paper, charges not recorded, or possibly even worse, payments not recorded. And, of course, lots of incorrect amounts entered. As painful as it may be, you or someone one your team needs to be tasked with going back through the data to try to track and audit amounts to get the most accurate data possible. Now, there are a couple of things to keep in mind:
- If you’ve let a year go by without attempting to collect amounts due, you are probably not going to collect it. In the orthodontic industry, after 120 days past due, chances of collecting an amount are slim. When you look at 3 times that interval, slim has usually left the building. So if you need to reconstruct amounts due, you probably don’t have to go back to work done many years ago unless you have supreme confidence in collectability.
- Do NOT just start sending bills out with the assumption that the party billed will let you know if they’ve already paid the amounts. This can and has had legal ramifications and makes the practice look disorganized and shady.
Usually, this process takes some time to do, but if it results in you collecting something instead of nothing, the effort will generate a return. The good news is that if you don’t have the time to do this, there are companies that will do this for you at no charge if you give them business going forward (which may be worth it) or handle the process for you and simply take a percentage of whatever is collected (that percentage may be sizeable, but at least you won’t have to come out of pocket initially).
Deal with reality
In some cases, you will not be able to properly recreate amounts due. Either that, or the effort will require so much time that the cost does not merit the potential income. Older amounts, even if perfectly computed and supported, may not be collected. Patients may battle over the amount or even send unpleasant letters from legal counsel. You may decide not to pursue those amounts.
In other words, despite your best efforts, you may not collect everything owed to you. That’s life. Be prepared for the bad debts that might befall you and keep in mind that collecting something is always better than nothing. At the very least, you took the time to get your information as organized as possible.
Make sure your new systems are in place now
Obviously, even before you start reorganizing the data, get a system in place now. Initially, that system doesn’t have to be completely perfect. Just have some methodology to collect funds and keep the best possible records of patient and insurance transactions. Knowing you are in a bad situation is a lot better than being in a bad situation and not realizing it. In the case of the former, you know the problems facing you and can come up with solutions to the problems. In the case of the latter, you are just guessing and like most of us, probably guessing wrong.
Remember that no matter how bad the situation looks or how ugly your data situation may be, hope is never ever lost. E-mail us today if you are in this situation.
No comments:
Post a Comment