The Secret Sauce: The missing ingredients for a five-star debt collection strategy revealed!
Gain insights from an accounts receivable professional about how a collection partner can improve your revenue with a crafted recipe of expert tools, strategies, and the secret sauce of better patient recoveries.
A common misconception is that collection agencies do nothing more than send the occasional letter and make phone calls to past-due dental patients. And so why hire an agency when you can do that yourself and save yourself the cost of outsourcing your accounts receivable to a collection partner? The reality is, a trusted collection partner has a secret sauce, and that recipe, as we’ll see, includes a special set of tools and strategies. Their unique efforts can save your office staff valuable time, grow your revenue stream, and lead to an increase in the recovery of past-due accounts—all while helping your patients who, after their positive experience with the agency, will return to your office for additional treatment.
Pinch of Letters.
A collection agency’s first attempts at contact to a past-due dental patient comes in the form of a letter. The sense of urgency in these letters demonstrates the seriousness of the matter and, since no one likes to be in collections, they often result in an immediate response from the patient. Once aware of their past-due account in a collection letter, many dental patients are prompted to resolve their balance with either the provider or the agency. Additionally, the first collection letter delivers a validation notice. This provides the patient with a window to confirm their account information is accurate and an additional incentive to resolve the account before their credit is impacted (assuming of course that your office decides to credit report overdue patients).
Dash of Calls.
Letters are easy to ignore these days. Calls from a collection agency can lead to a healthy financial conversation that results in resolution of the account, without tarnishing your patient relationship. If you’ve never worked with a collection agency before, be sure to find one that conveys the urgency of the situation but uses win-win negotiation tactics, concerns itself with the patient experience, and works with your patients to find an amicable solution. An active collection partner can also call more often, and at more opportune times, to ensure a connection with a past-due patient. Whereas, your office staff, given the demands of running the office, may only be able to call sporadically.
Credit Reporting to Taste.
Beyond letters and calls, credit reporting can be a useful tool for encouraging payment. Accounts placed with a collection agency are usually reported to the bureaus after 60 days without resolution. Should the account go unpaid, credit reporting can impact a patient. This provides a long-term leverage for repayment. The mark will remain on their credit until the account is resolved or for up to seven years. If they find themselves in a better situation in a year or two, or try to acquire an additional line of credit, they may be incented to resolve your account to improve their credit score.
Sprinkle Credit Monitoring.
In addition to credit reporting, credit monitoring can provide an additional boost to recoveries by alerting the agency to certain credit improvement events that may indicate a new willingness or ability to pay. These might include a new tradeline on the patient’s credit report or evidence that other accounts are getting paid. When a trigger fires, the agency is notified, and they begin active collection efforts again, using the new information from the patient’s credit profile to negotiate a payment arrangement. Best of all, credit monitoring does not leave a mark on the patient’s credit profile. For dental offices that find credit reporting too invasive on their patients, credit monitoring is a great alternative.
A Little Heat.
The right collection partner may also offer non-litigation attorney referral or even litigation referral options. In the former case, non-litigation attorney referral is a law firm, partnered with a collection agency, which sends letters and makes calls from an attorney’s office. Often the very idea of being contacted by an attorney is enough to incite a response from the patient. In the latter case, litigation referral places the past-due account with a litigation attorney, who takes the consumer to court to seek a judgment. However, there’s no guarantee of recovery with a judgment, and there are additional costs and court fees associated with it, and so it’s often the last resort.
The Hidden Ingredient.
The key ingredient to a collection partner is deceptively simple. When a dentist’s office tries to collect, there’s little possibility for an escalation of effort, and past-due patients quickly learn to ignore the attempts made by their dentist’s office. A collection partner will disrupt the patient’s expectations and, as stated above, demonstrate the seriousness of the overdue account. The change from the dental office’s collection efforts to that of a collection agency is dramatic, and that alone can make an impact on patient recoveries.
Blend into a Fine Sauce.
A collection agency also provides a time-saving for your office. Whether you’re managing patient satisfaction, ensuring accurate treatment, or overseeing insurance submissions, you have a lot to do, and a collection agency can alleviate the time wasted trying to collect from overdue patients. But the most apparent advantage is a collection agency’s ability to recover past-due accounts on behalf of your office, and do so with a level of expertise and professionalism. A collection agency has relationships with skip-tracing and credit reporting vendors, and access to analytical tools that would be cost prohibitive for any dentist’s office to incur. Using a unique blend of ingredients, a successful collection partner ensures your past-due patients receive fair treatment and your office has a proven accounts receivable plan to stabilize your revenue, allowing you to focus on providing excellent dental care.
Chris Morris, Vice President, Small Business Services and Healthcare Operations
Chris Morris has over 18 years in the collections industry, starting as a collector in 1997 and progressing to his current position, vice president of small business services and healthcare operations. The small business services business is aptly named Main Street Recovery services. IC System was built upon this core business. These businesses make up main street America. Chris has full P & L responsibility for a team comprised of Inside Sales, Client Services, Collection Operations, and Marketing.