Practice Management Alert

Bad or bounced checks from patients cost practices revenue and can cause havoc for billing departments that are unaware how to address the problem. Several procedures should be followed and stated in a practice's policies that will determine the course a practice takes when confronting a bad check.
 
Your practice's financial policies and procedures should spell out how you will handle bad or bounced checks from patients. Give the financial policies and procedures to patients in writing when they register as new patients with your practice. The policy should cover whether you will charge the patients a fee if they write you a bad check, and the amount of the fee. It should also state what kind of payment you will accept after a patient has written you a bad check, such as cash, money order, credit card or debit card.
 
If a patient's check bounces, contact the patient and find out what the problem is. It's possible that the bad check resulted from a bookkeeping error on the patient's part, and was not done intentionally to defraud you. You could also contact the bank and ask whether the money is available. If it is, ask to redeposit the check. If it is not, try to work with the patient to collect the money. When contacting the patient about the check, explain that your practice's policy on bad checks states that once the practice has received a bounced check, it will not accept another check. Then, tell the patient what kinds of payment you will accept. Try to get a credit-card or debit-card number over the phone so you can obtain payment immediately.
Charging Check Fees  
When a patient's check bounces, your practice's bank will charge you a fee, and the patient's bank will also charge the patient a fee. You can charge the patient a fee for bouncing a check to cover your bank fee, but to do so you must have stated the fee in your financial policies and procedures. State law may govern how much you can charge in bounced-check fees, so you may also want to check with your attorney about the amount of the fee. When determining whether to include a bounced-check fee as part of your policies, realistically consider whether you will be able to collect the money. A patient with financial problems who lacks the money to cover the bill will have even more trouble trying to pay your bill plus a bounced-check fee.
Pursuing Bad-Check Writers  
Some practices are unwilling to pursue patients who have deliberately written bad checks because they want to maintain good patient relations. Others maintain that failure to follow up and press for prosecution of worthless check writers provides [...]