Practice Management Alert

Question: My practice uses an outside collections agency, and I'm worried that they might be falling down on the job. What's the best way to monitor the work they're doing?  


Michigan Subscriber

Answer: Once you've decided to turn an account over to an outside collection agency, you know you have a serious problem on your hands. The recovery rate can be as low as 30 percent if the account is aged 180 days or more. The agencies don't earn anything unless they collect, so in general, you really don't have to worry about their falling down on the job. 

How the collection process works: The debtor will first get a series of strongly worded letters from the collection agency or the law firm representing them. The letters will advise patients that your practice is a member of the National Credit Bureau Network and that a blemish will be recorded on their permanent credit files if they don't immediately resolve their past-due balance. This stern warning often does the trick. 

Time to change agencies: If, however, you are finding that you are getting less-than-adequate responses from your collection agency, you may want to switch agencies. How do you know when it's time to do this? The primary way of determining whether the agency is doing its job is if you are getting regular reports on the status of accounts and positive results by receiving monthly checks.

But be aware that if you do want to change agencies, you should check your contract with them. You will probably have agreed to give them a certain amount of time to collect the account.