How to Decide on a Collection Company For Your Medical Practice

In our experience, collection companies do very little to help out with collection efforts. For starters, pediatricians’ medical offices balances are generally small when compared to hospital charges, ER charges or even surgery charges.

If you were in the collection business and got a commission for your efforts, would you try to collect on $10,000 or $100? In other words, our accounts are not high on the priority list.

I also think that by the time we turn over a bill to a collections company, more than 120 days have gone by. And we know that the longer an account is delinquent, the harder it is to collect on it.

The truth is, the best collection company for your medical practice is, your medical practice.

And your goal, as a manager of the practice, is to use your own billing company as little as possible. And in order to that, you have to put in place a protocol that minimizes the chances an account goes to collections.

Now, how do we ensure that?

Glad you asked.

Here is what has worked for us:

1 – Every single private patient MUST leave a credit card on file. No exceptions.

2 – We collect copayments at the time of service, ALWAYS. What about if the kid can’t breath and they don’t have their wallet? There are exceptions, of course, but those sort of things rarely happen. If they are dying, they shouldn’t be  in our office in the first place.

3- We collect balances at the gate (code word for front office). If the account is past due, you won’t be seen. Unless the kid is dying, can’t breath or has an unresolved issue.

4 – With large balances, we call the parent as as soon as we know about them. Not to collect but to make them aware. The sooner we do this, the better. The purpose of the call is to initiate dialogue and awareness.

5 – Every 15 days, after the first statement goes out, we contact the patient either by mail or phone. We usually alternate phone with letters.

6 – We make available an Easy Pay Program where we set up patients on a payment plan. We only set this up with a credit card or a debit card. We don’t send out coupons or allow parents to “remember” to send in payment.

7- At 90 days, after we’ve called and sent letters, and the patient still doesn’t respond, we process the card they have on file. This is spelled out in our policy, which they’ve agreed to.

8- With our collection letters, and phone calls, we never threat with sending the accounts to collections. Our letters and phone calls are designed to encourage people to call. Not to threaten them. When you threaten people, they generally do two things. They either push back or get angry. Sometimes both. Either of which gets you NO money. Thus, we choose to kill’em with kindness.

Even after all that, some people still fall through the cracks. But far less than the alternative.

If they do fall through the cracks, we send the accounts to collections. We also send them a dismissal letter and follow our dismissal protocol.

Emotionally, however, I’ve resigned. In my heart I know we did everything we could have done. Unlikely that the collection company could do better. If they do, great.

9 – Before we send the accounts to collections, we attach 40% to the balance (also written out clearly in our policy; which the parents have signed and dated) to cover the cost of the collection agency should the collection be successful at their attempts.

10. In my view of the world, the collection is on us. And the more we do upfront, the less you’ll need to use a collection agency.

Usually, when I go through our collection policy, I always get somebody that says, “Brandon!” “Why don’t you simply check eligibility?”

Our practice management system checks eligibility. But the system basically checks to see if that person has coverage under that insurance company. I find that the issue isn’t so much about determining if the person has insurance or not, but rather if the patient has bought enough insurance to cover our services.

Thus, determining benefits are more important. However, checking benefits is like chasing the wind. First, it consumes WAY too much time. Sure, you can check online these days. Knock yourself out if it works for you. Still a waste of time I think.

Second, there is absolutely no guarantee that the insurance will pay for services, even after getting a human on the line and asking them specifically if the services will be covered.

The insurance company will tell you point blank “…even though I’m confirming this patient is eligible and has covered benefits, we can’t promise it will get paid until we process the claim.” To which I murmur under my breath, why in the world did I just spend 20 minutes on the flipping phone call then if I’m not going to get a guarantee?”

I’ve resolved that issue by asking people to leave a credit card of file. Not only am I shifting the liability of payment to the parents, I’m saving time.

I’ve written about this issue a few times. If you would like to learn more about our collection efforts, and how we go about it, check out the links below.

Patient Collection Letters, what is your approach?

Does Your Medical Practice Have a Problem with Bad Debt? Here is a Solution

Medical Practice Collection Letters that Work – With Samples

 

2 thoughts on “How to Decide on a Collection Company For Your Medical Practice”

  1. Great post. Would you be willing to share any of your templates? Phone scripts and/or invoice/in-house collection letters?

    1. Jill,

      When I wrote the post, I forgot to include the links to my previous post that address the collection letters and credit card on file idea.

      I just updated the post and now the links are in.

      Brandon

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