Train your patients and other receivable tips

In our last post, we mentioned that a key part of achieving monthly payment/6 week scheduling harmony is an effective receivables system.  Obviously, collecting money is both fun (actually having the money) and undesirable (asking for the money when it is past due).  

This is especially true when you have monthly payment or other convenient payment plans intended to ease the financial burden on the patient.  This is extraordinarily true if you decide to allow payments to be made after treatment is completed.

But here are some tips for easing the undesirable part and creating more of the fun part.

Before starting, have a plan

There are quite a number of ways to effectively keep past dues under control while actually collecting money (as opposed to simply reclassifying past due amounts as current – which happens a lot).  But decide on how you want to deal with situations to keep your past dues under control.  Here’s an example:

Patients 30 days past due – A friendly reminder letter that notifies the person of the past due amount and offers various ways to make the payment due.

Patients 60 days past due – A less friendly/unfriendly letter that notifies the person of the past due amount, offers various ways to make payment and informs them that if payment is not made by a certain date, their account will be turned over to a collection agency.

Patients 90 days or more past due – Amount turned over to collection agency as noted in the letter above.

Any past due patients are not seen for treatment until their accounts are brought current.

That’s a plan.  Details need to be filled in and you will not always be able to rigidly adhere to those rules, but at least, a usable framework has been created.

Some practices only accept autodrafts.  Many require at least some semblance of decent credit.  People working in this field may debate the various merits of each (i.e. are you excluding too many potential good patients by having these types of rules), but at least the practices have certain principles under which to operate.

Train the patient

We used this term in our last post, and doing this has great value when trying to make sure you are paid on time.   During the new patient process (usually when a contract is about to be signed in an orthodontic practice or when a patient agrees to take treatment in other dental practices), the office lays out all the payment methods, the billing system and what is expected to continue treatment.  At this point, the financial coordinator or clinical coordinator should stress that the practice cannot see a patient with a past due balance.  Explain that the practice policy is to turn over any amounts more than 90 days past due to a collection agency.  Put all of that in writing for a patient to initial or sign.  All of this can be explained matter-of-factly.  Essentially, you are telling the patient, “I know we won’t have any payment problems with YOU, but we have to go through this policy with all of our patients.” 

Here, you lay out the expectations for the patient so that patient knows exactly what he or she is getting into.  If this scares the person away, that person might not have been the best patient for the practice.  Over time, experienced managers will tell you that going through the receivable policy enables them to identify potential good payers and bad ones as well.

Again, there is no magic to the method or verbiage or documentation.  The point here is to lay out the policies and expectations beforehand to help the patient know what to expect.

Monitor, monitor, monitor

Just like practically everything else we’ve discussed, a policy is useless without making sure that the policy is being enforced.  Of course, a doctor and manager cannot observe every contract discussion (and observation may change behavior too).  So, the past dues should be reviewed at least monthly.

If past due amounts appear to be rising out of control, the problem may not be the patients or the system that you have set up.  Rather, it may be that your system, while perfectly designed, has been executed poorly.  To determine that, spot audit the past due amounts and closely observe overall trends in past due balances.  This will tell you plenty about where problem areas might exist.

As always, if you have any questions, please do not hesitate to contact us.  We’d be happy to work with you to set up a system that fits your practice at no cost.