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Getting Paid On Time: Managing Accounts Receivable

My jaw hit the floor.

Last night I spoke with a friend who works as an associate in another practice.  She told me her office’s policy is to send patients to collections after 150 days.  One, hundred, and, fifty, days.

If you have a lazy collections protocol then two things will happen: (1) more money will slip through and ultimately not get collected, and (2) you’ll lose money by having to pay your team to chase down the delinquent payments.  All of this can be avoided by having a solid system in place for your team to collect money.  Here’s my flow chart:

Collections process

Treatment Date: Your front desk asks for the fee or copayment, which has already been presented to the patient so that there is no surprise.  If the patient “forgot their checkbook,” then they are handed a stamped envelope containing the billing statement and asked to send it in when they get home.

14 Days: A friendly phone call to remind the patient that they were supposed to send in their check.  We remind them that we can also take a credit card payment.

30 Days: A friendly letter.  I’ve already written about how I’ve revamped my billing statement letter.  Make sure there aren’t any “aging columns” that suggest the patient can wait to pay the bill.

45 Days: A slightly more stern phone call.  At this point there really isn’t a reason for you to not have been paid for services rendered.  If the patient is experiencing financial hardships we can sign them up for Care Credit or work out some other arrangement.  If they’re not returning phone calls, start to get worried.

60 Days: It’s been two months since you provided care and you haven’t been paid.  A stern letter that hints at further action is mailed.

75 Days: A final phone call.  If the patient hasn’t been reached this entire time then you should be concerned that they are trying to dodge payment.

90 Days: A final letter that describes the collections process.

100 Days: Notify the collections agency of the delinquent account.

Each month I get a report from my office manager about our accounts receivable.  I want to know that she’s on top of it and to review any arrangements she’s made with patients.  What happens when I have to take a patient to court for collections?  Well I’m in the middle of that for the first time.  I’ll let you know how it goes…


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