I’ve had an opportunity to give my “101 ways to transform your practice“ talk a couple of times and one of the points that gets the most interest from attendees, is our collection efforts. Specifically some of the techniques we use to get people to pay us. So I wanted to highlight for you today, some of those techniques we use.
Fundamentally, the collection efforts begins before you’ve provided the service. And the administrative task is to ensure we will get paid before anything else.
Now, there are circumstances where a child is ill and needs immediate attention. I’m not talking about those special circumstances. The well-being of children comes above all else.
Having said that, the well-being of children depends on our financial well-being. In other words…
…we can’t provide for the needs of others if we are in need as well.
Credit Card On File
For starters, many of you regular readers know that we have a no exception rule to our credit card policy. What this means is that everybody – and I mean everybody – has to leave a credit card on file if parents wish for us to see their children ( I guess there is an exception, Medicaid patients). The agreement states that if we are unable to collect for the patient balance after 90 days, we are able to process the credit card.
We collect all balances due before seeing a patient. If the patient’s balance is too high, and the parents can’t pay it in full, we set up a payment plan. But the payment plan has to be on a credit card and we process the card at a defined date. None of this, I’ll send you check every month nonsense.
It is OK for other merchants to allow customers to send in payment every month because those companies can reposes a car, turn off the electricity or turn of the cable TV service until customers pay up.
But a medical office? Well, we’ve already provided services; so at that point, we are at the parent’s mercy. After all, the kid is better; there is no real incentive to send in payment.
15 Day Rule
For those parents that are delinquent (delinquent is defined as 30 day past due), we reach out to them every 15 days via a letter, phone call or statement. Why? Because the sooner you consistently let parents know they have a balance, the more likely they are going to pay. So let’s say the parent received a statement and did not pay within the 30 days. We will pick up the phone 15 days after their second statement, give the parent a call, and ask them if they have any questions regarding their bill or if there was any other reason why they missed the payment deadline.
Envelope Collection Letters
With our collection letters, we use color coated envelops. Why? Because we want to draw attention to the letter. The majority of mail comes in white envelops. A pink or bright blue envelope will stand out.
We also handwrite the receivers address as well as use a regular stamp (versus a machine generated stamp). We do this so the envelope doesn’t appear to be a “collection letter.” People will be more likely to open it if they don’t identify the letter with a collection letter.
Kill’em With Kindness
Our collection letters (those that we send out when we don’t make phone calls) are also a bit different. We don’t mention “collections” or sound as if we were giving people an ultimatum. Our approach is, Kill’em with kidness.
For a sample of our letter, click on this “link”
We Do Our Best
I wish I could say that all these methods are 100% guaranteed. But the reality is that some patient/parents do slip by. Although much less thanks to my team’s effort.
Remember this, the collection process ought not to be a department per say, but rather an attitude. What I mean is that everybody (including the doctors) must work towards ensuring that the collection efforts are achieved. I’m not suggesting the docs get on the phone to make collection calls, but they too can play a part in ensuring that the collection efforts are not undermined.
What collection efforts have worked for you?