Practice Management Alert

Use this checklist to make sure your collections arsenal is stocked and ready

If your in-office collections rate isn't dynamite, you could be lacking one of the universal must-haves every practice should implement.

You should feel you've done your best to exhaust every option by the time you send patient accounts to an outside collector. Use this expert checklist to determine what your practice could be missing.
 
1. Clear financial policy. Prevention is the golden rule. Present patients - especially new patients - with a clear policy that outlines when you expect payment of copays, account balances and other fees. And collecting "co-payments, co-insurances and de-ductibles up front" is always a good idea, says Merrie Gaik, CPC, office coordinator at Charlotte Surgery Center in Port Charlotte, Fla.
 
2. Minimum balance write-off. Establish the minimum account balance you will try to collect, says Susan Billock, customer service manager with Certified Emergency Medicine Specialists PC in Grand Rapids, Mich. For example, you may decide to write off any balance under $5. You may also decide to send any account over $20 to an outside collector, and hold on to accounts with a balance of $5-$20 to combine with possible future balances, Billock says.

Money-saving strategy: In most cases, trying to collect on any balance under $5 will definitely cost you more than you stand to collect, Billock says. The cost of envelopes, stamps, paper, and employee time can easily add up, leading some experts to recommend writing off as much as $25. The appropriate write-off amount for your office will depend on your specialty and the average balance you try to collect (a surgical practice may want to set its write-off amount higher than a pediatric practice, for example).
 
3. Payment schedule. Establish a payment schedule so you can quickly and easily set up a payment plan and tell a patient what his minimum monthly payments will be based on his total balance, says Laura A. Bassett, office manager with Mid-South Surgeons PLLC in Columbia, Tenn. You will need to be flexible with patients with limited financial means, but you should generally try to adhere to this schedule, Bassett says.

Example: Your payment schedule might read as follows:

$50 balance or less: Entire balance due first month

$51-$500 balance: $50 minimum monthly payment

$501-$1,000 balance: $100 minimum monthly payment

$1,001-$2,500: $200 minimum monthly payment

Over $2,500 balance: 10 percent of balance due each month. 4. Set collection procedure. Make sure employees in charge of collections go through the same standard steps for every past-due account. Define in your collection procedure how many phone calls and letters a patient will receive before you send the account to an outside collector. A set procedure will ensure that every [...]