Practice Management Alert

Here’s why experts say that ‘hard’ collection should be a last resort.

There are few more frustrating situations in a medical practice than a patient who does not pay his bills in a timely fashion. Collection efforts must achieve the desired outcome without alienating the patient.

Bottom line: Your practice needs prompt payment to keep things humming, but not at the expense of patient relations.

Walk that line with this expert advice on how to handle patients that don’t pay.

Use the Phone to Contact Patients

While technology affords us several ways to contact patients about paying their balances, nothing can replace a phone call, says Alice Scott,  co-founder of Solutions Medical Billing in Rome, N.Y.

“In a medical office, we highly recommend calling the patients on overdue balances,” explains Scott. It is much more personal than an email or text, and talking to the patient can often clear up any misconceptions about the bill or patient issues.

Example: The patient might not have paid because she just lost her job, or had another financial setback. If a patient is in legitimate dire straits, tell her you might be able to find a workable way for her to settle her account. If you take the time to talk to the patient, you’re far more likely to find someone willing to work with the practice to pay her bill.

Some medical practices use other means of notifying the patient, such as email, text, even traditional mail. Scott says you shouldn’t rely on these methods, and should instead use the phone and tell the patient about the outstanding balance. Texts go unread sometimes, emails can end up in spam folders, and traditional mail just takes too long. Talk to the patient, get her side of the story, and work with her to see how you can both work toward a mutually agreeable outcome.

Use 3-Notification Rule

When you’re deciding on how many opportunities to give a patient to settle an outstanding balance, it will be situation-dependent. If you make contact with the patient and they promise to pay, keep sending up-to-date invoices as long as the patient is responsive, Scott says.

If, however, you never hear from the patient, only make three attempts to collect before sending the bill to a collection agency, recommends Scott.

Decide Between ‘Soft,’ ‘Hard’ Collection

Nobody likes to go the collection agency route, but you might have to if a patient just won’t comply. If you want a bill collector with a more empathetic approach, try using an agency that specializes in “soft” collections.

Definition: “Soft collection is a less severe form of collection,” per FinancialWeb (www.finweb.com). “This [collections] agency will send increasingly urgent letters and make increasingly urgent phone calls” to the patient until she makes payment. Be sure you do your research on soft collection agencies, however. On paper, soft collection is less severe than hard collection — but soft collectors can go too far in terms of contacting patients. A soft collections agency can can become a nuisance, at best, or illegally abusive, at worst,” FinancialWeb reports.

Every office will not choose the “soft” route. How to collect outstanding patient balances “is a personal decision for the provider to make,” Scott says.

Soft collection practices might be most beneficial for some practices, but you can still do it the “hard” way — especially if you think it will lead to better collections outcomes.

Definition: While it depends on the collections agency, “hard” collections are more aggressive, and potentially intimidating, toward patients. A hard collection should be a last resort, as it could damage the patient’s credit report and her relationship with the practice.