Medical Bad Debt Collection Tools and TipsMedical bad debt collection can be a very challenging situation facing any doctor or medical practice. Your medical training, staffing and business processes are centered around providing the best care for your patients. After all, you went to medical school to learn to heal. You probably didn't spend much time studying how to collect on delinquent patient accounts, and chase after insurance companies all day! In spite of the best medical training, the reality is that unpaid bad debt is seriously affecting your business bottom line; not to mention the added labor costs and hours dedicated to going after these delinquencies. Whether your office is collecting these accounts in house, or you're thinking about outsourcing your medical bad debt collection, DebtCollectionSteps.com offers some tips for each. Collecting In HouseRegardless of whether or not you offer your services "pay as rendered", the nature of insurance reimbursement means that your office does provide some type of credit terms, since there is some uncertainty what the patient will finally owe.It is of paramount importance to have a well written and consistent in house collection policy, so there's no confusion when handling these problem accounts. Gather as much patient information as you can upfront. Think of the type of information required on a typical credit application: full name, employment history, social security number, etc. Should the need arise later, you'll have relevant contact information. Here's where you need to take on a more "investigative-type" role here. For instance, look for job stability, rental or mortgage history. These can indicate possible future collections problems. Once an account has gone 30 days past due, you should contact them by telephone. Remind them of the past due bill in a friendly, but professional and emotionally detached tone. This is important, because its easy to feel personally slighted when money is owed. But many collection attempts have been sabotaged by making the patient become defensive. You're likely to be more successful by keeping the conversation focused on options to rectify the money owed, rather than taking it personal. Inquire if there's a problem; it may be possible to make payment arrangements if they are having difficulties. Early contact will reveal if there's a real problem. A letter should follow 15 days later, if no payment or arrangements have been made. Followup with still another letter 15 days after that. We've included some sample debt collection letters you're free to use. Be sure to follow all federal (FDCPA) guidelines about collection agency laws when communicating with debtors. Even though you're technically not a collection agency, you have to abide by the same regulations. Violations can seriously impact your medical practice. Also be aware of and observe your state's particular charity care laws. Many states require hospitals to grant charity care to patients lacking insurance to cover a hospital debt and lives on an income at or below 200% of the federal poverty level. Find out what these laws are, if any, exist in your state. Not only is the hospital obligated to observe these charity laws, so are outside third party collection agencies, should these accounts ever need to be turned over to an outside collection agency. Outsourcing to Third Party Collection AgenciesAfter you've attempted phone calls and letters with no resolution to the matter, you should seriously consider hiring a third party collection agency. After 60 days has passed, the patient is most probably ignoring your collection attempts. And the longer you wait, your chances of recovering decreases exponentially.We've seen the highest medical bad debt collection recovery rates after it has been turned over at 60 days. Collection agencies are effective because they have the training, equipment and resources, as well as the professional, emotional detachment required to collect successfully. If you are interested in a collection agency quote, fill out the quick form below. One of our consultants will contact you within 24-48 hours.
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