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Thursday Troubleshooter: Can dental practice charge interest for patients who take months to pay?

Feb. 8, 2018
This dental practice staff is frustrated that its wealthy patients take months to pay their bills. They should know what it takes to run a business and not take so long.

Nearly everyone has problems and concerns on the job, and sometimes you're just too close to a situation to solve something yourself. Share your concerns with Team Troubleshooter, and the experts will examine the issues and provide guidance. Send questions to [email protected].


QUESTION: My question is about collections. We are a fee-for-service practice with a very wealthy patient base. We require payment when services are rendered, however, we have numerous patients who don’t pay their bills for months. My question is, are we able to charge interest? Most of these patients are very successful professional businesspeople who should understand what it entails to run a business. Any information or suggestions you have would be very helpful. Thank you!

ANSWER FROM ANDY CLEVELAND,Dental Accounts Receivable Ninja:
It's always best to have any fee charged to the patient disclosed and agreed upon, usually in the patient information and intake sheet. It’s customary to charge interest on outstanding accounts, whether it's in dental or any other business that is extending credit to a customer.

It’s best to check with your state, but the most commonly allowed interest is 1.5% per month or 18% per annum. In my opinion, dentists should be charging interest as it subsidizes those patients who do not pay, and the office is taking a risk in allowing the client to defer payment with a promise.

The key with charging any fee is to have it disclosed and agreed upon by both parties and for it to not be usurious. The definition of usurious according to means, “charging illegal or exorbitant rates of interest for the use of money.” (Editor’s note: Mr. Cleveland is not an attorney or CPA so cannot give legal advice.)

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Team Troubleshooter

This weekly column on DentistryIQ features questions from everyday people who work in dental practices, who have issues they would like addressed by the experts. Those who regularly take the time to answer questions include Rebecca Boartfield, Patti DiGangi, Dr. Chris Salierno, Laura Hatch, Karen Daw, Jill Townsend, Lisa Marie Spradley, Shelley Renee, Judy Kay Mausolf, Robin Morrison, Paul Edwards ... and the list is growing.

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