Practice Management Alert

Question: When should I turn an account over to a collection agency? California Subscriber Answer: Once an account is 90 days past due, many offices send out the first of two standard letters. The first letter should:

1. note the patient has a bill that is past due
2. ask that the amount be paid or that the patient contact the office to make payment arrangements. If you have not heard from the patient within one week, call him or her to determine if the patient just did not pay the bill or failed to pay for a reason, such as a financial or personal emergency.

Once you make this personal connection, you will find that many patients were just too embarrassed or caught up in their situation to contact the office and you are able to get payment in full. If not, you will probably be able to negotiate a payment plan. If there is no response to the first letter, and you are not able to make contact by telephone, or they make promises that they do not keep (make sure to keep good documentation), send a second more aggressive letter. This letter should be dated, specifying the outstanding balance and the date by which payment must be made to avoid having it forwarded to a collection agency. Warning: In many states, if you threaten to turn an account over to a collection agency and fail to do so, the law says your practice can be sued. You should establish a dollar amount for which accounts will be turned over to collectors and those you just write off. This threshold will vary by practice and region. For example, primary care providers whose billings include a lot of copayments should set a lower amount than specialists whose individual patient claims tend to be higher. For practices such as primary care and pediatrics that have many multiple-patient family accounts, consider red flagging and cross-referencing each overdue bill you write off as uncollectible. For example, a mother brings in her son for a check up. Upon cross-reference, you notice an outstanding balance for a flu shot administered to her husband in the fall of 2000. You can ask, "How would you like to take care of that today cash or credit card?"