The best way to deal with collection problems is to prevent them from happening in the first place. Carefully define patient payment policies and communicate these policies with patients clearly and often. (You do not necessarily need to share them verbally, which might irritate patients, but with signage and by noting them on statements and other paperwork.) In cases that involve high out-of-pocket costs for patients, offer and encourage outside financing through a reputable finance company.
Put collections on your financial coordinator’s schedule Dealing with delinquent accounts can be frustrating and unpleasant, so it’s understandable that even responsible staff members will sometimes put it on the back burner. To avoid this, designate specific times on specific days when your financial manager can concentrate totally on collecting overdue payments. To make this most effective, set and track performance targets—number of patients contacted, number of accounts cleared, amount of money collected, and more.
Use the “Rule of Threes” Exactly what should your financial coordinator do to motivate patients to pay what they owe? Levin Group clients have achieved excellent results by following the “Rule of Threes”:
• It begins with phone calls to patients, one call per week for three weeks to remind them of their financial obligation and to ask them when the practice can expect payment. To increase the chances of actually speaking to patients, call their cell phones.
• Next, send emails, again, once a week for three weeks. Though the message should not be harsh or accusatory (these are your patients, after all), it should be businesslike and convey the sense that the practice is concerned. Include numbers and dates to put the situation in sharp focus for the patients.
• Finally, mail letters, one every week for three weeks. By this point, the tone should be very formal, to the point of resembling a legal document (without threatening legal action). Each of the three letters should be different, showing an increasing level of “disappointment.”
When using the “Rule of Threes,” your financial coordinator will usually get a response before going through the whole process.
You’ll always have to contend with overdue accounts, but by setting performance targets and a 99% goal, scheduling collections activities and employing the “Rule of Threes,” your practice should be able to collect most of the money it’s owed.
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This article first appeared in DE's Expert Tips & Tricks. To receive enlightening and helpful practice management articles in this e-newsletter twice a month, visit dentistryiq.com/subscribe.