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Dear Doctor: Here is half your money, take it or leave it

I recall as a student when – somewhere near the last day of school – an instructor would share the funniest things that they’d seen come across their desk throughout the year.  It was usually some 5-word blooper from a student or a simple, yet funny misstatement of history that found it’s way into a writing assignment; something that managed to set itself apart from the rest, truly catching the attention of the instructor through a countless sea of papers, essays, tests, and homework assignments.  Only the real gems would make it to that last day of school.

We’ll, I wish I could say that I’ve got a “gem” for you, or perhaps even a blooper.  If not that, then at least something that is a bit rare and unusual.  Unfortunately, the only qualification that my statement has is that is has caught our attention, and it should catch yours as well.  It’s not funny, rare, or even a blooper.

One of our functions is as a provider of medical billing services, and we consider this to be a “sign of the times” in health care and in our economy, and the statement is simply this (taken from an actual letter from patient to doctor):

Dear Doctor:

I am your patient and I have a bill for $400.  I will send you half within the month if you will agree to write off the balance.  Please sign below acknowledging this agreement.

Sincerely,

Your Patient
 
Approved:

_________________________
Medical Practice Authorized Representative

Our recommendation is simply this: If you believe in your services, your prices, and your policies, then don’t fall hostage to anyone, not even a patient.  If you feel that arrangements such as this are in the best interest of your practice, and your financial policy supports this behavior, then it certainly might be right for you.  But understand the risks of too quickly going after the quick buck in lieu of collecting the sum of what is rightfully yours as a provider of health care services.

There are no easy answers, but it is in your interest to know that these letters are coming and you should at least know how you will respond.

_________________

Tannus Quatre PT, MBA is a private practice consultant and principal with Vantage Clinical Solutions, Inc., a nationwide healthcare consulting and management firm located in Bend, OR and Denver, CO.  Tannus specializes in the areas of healthcare marketing, strategy, and finance, and can be reached through the Vantage Clinical Solutions website.

Cash flow considerations

There is a trend of “slowing payments” over the past several months and we are noticing clinics have higher percentages of aged account balances, particularly from patient responsibility, sitting out in the greater than 90 or 120 day columns.  With individuals continuing to struggle in this economy, they are more quickly and frequently making the decision that their medical bills can be put on hold.  Clinic owners need to recognize that this may be happening in their practice, and they should develop tactics to handle higher days sales outstanding, slowing cash flow, and patients who are creating their own payment plans (or deciding not to pay at all).

Realizing that some compassion needs to come in to play with those that are financially struggling, we are reminded by Peter Lucash that we should be collecting us much up front (co-pays and deductibles) from patients as possible; we definately should have the ability to receive credit card payments; and we should have policies and procedures in place for cash pay patients, financial hardship, and payment plans.

Implementing a collection at time of service policy will take some time. When making appointments, tell patients that you will be asking for payment. At first, if the patient balks (such as saying they don’t have their checkbook) let it pass, but tell them that you are asking for payment from now on. Over several months, you should see your collections rising and A/R dropping. At some point, of course, collections will flatten, the timing of collections stabilizes.

 

Collections are always a challenge within a practice, as you balance the desire to help patients with the business side. You want your staff your staff to remain compassionate and caring, and they are often the best people to work with your patients to collect with compassion.

 

Take the pain out of collecting from patients

Collecting co-pays and responsible portions from patients is uncomfortable for many in the front office, and for clinicians as well.  Unfortunately, choosing to avoid the pain of collecting can land a private practice in a world of hurt, especially in our current economic environment.

This article from the Medical Group Management Association (MGMA) speaks to some ways to make the collections process a bit easier, more professional, and systematic – ensuring that your practice won’t “see red” at month end.

Developing and implementing a sound collection policy is vital to running a successful practice. If staff is not well informed and patients not educated on payment expectations, the likelihood of late payment or nonpayments increases. Ensure that your practice’s terms of payment are clearly stated in writing for both staff and patients. If you don’t have a systematic invoice and billing system, get one. The faster you mail invoices, the sooner you’ll be paid. An invoice should clearly show the amount due and when payment is expected, otherwise it will fall to the bottom of a patient’s payment stack.

Customer focused collection tactics

Collecting on aging accounts is vital to the health of our business.  The collection process needs to be thorough and efficient in order to maximize cash flow.  But, having a methodical system does not mean that customer service is thrown out the window.  Peter Lucash offers some insight into maintaining great customer service while working these accounts.

Collecting fees, from co-payments to non-covered expenses, requires a degree of tact and compassion. Our goal is always to develop long relationships with our patients – they should never be viewed as one time transactions.

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