5 Best Practices for Collecting Outstanding Balances
Collecting patient balances is one of the single most important sources of revenue for your practice, and it is one of the most important compliance practices that you can implement. Collecting patient balances is important for many reasons, but providers seem to struggle with this step in the process. There are probably many reasons why it is difficult to collect from patients in private practice, but we would like to help you with the process of collecting from your patients.
Always Collect in the Office
The first step to collecting outstanding balances is to prevent outstanding balances from accumulating in the first place. It is important to have a clear idea of what your client will owe you for sessions. You can do this by doing an eligibility check or by communicating your cash rate to the client at the beginning of your relationship with the client.
Once you have a clear understanding of what the client will owe you, it is important to be able to receive funds in a seamless manner. One of the best ways that you can do this in your practice is by keeping card information on hand and charging that card before your client leaves the office.
Once the client leaves the office, your chances of collecting any outstanding bill drop significantly. Therefore, it is critical that you have a process for receiving funds immediately following a session. It is also a good idea to have a process in place if the payment method that a client was using declines. In this case you need to be able to accept cash or a check or another digital form of payment.
Whatever you choose it must be easy to use and easy for your staff to implement on a day to day basis. Your clients must understand that this is the way you do business and that it is important for you to collect what the client owes. You will find that by collecting all the money that your clients owe the practice will allow you greater financial freedom and greater profitability.
Set Clear Expectations
Setting clear expectations is more difficult than people think it is. In order to set clear expectations, you must have a clear idea of the process and why the process is in place. We recommend that you spend some time thinking about what you expect for payment and why that expectation is important. Once you have a clear understanding of both of those things then you will be prepared to communicate them to your clients.
Remember that people forget! Sometimes people start to drift from the original expectation that you set for payment. Make sure that it is clear to the patient that the expectation for payment is going to be upheld per your informed consent paperwork and that you will continue to repeat the expectation so they don’t forget.
Keep in mind that if people have a clear expectation of what is expected from them financially it is very possible that you can maintain a clean patient aging report in your practice. This helps to avoid needing to employ a collections agency and allows you greater freedom in your practice to focus on your skills.
Always Keep a Card on File
As we said in the first paragraph, it is a good idea to keep a card on file even if the client is going to pay via another method of payment. The reason this is important is because it allows for you to maintain some control over the cash flow of your practice. If you don’t have a card on file, you don’t have any recourse in charging the client for missed or late sessions. Keeping a card on file allows you to maintain financial autonomy in your practice.
Additionally, keeping a card on file allows your client to forget that they have to pay. This can be an element that provides peace of mind for them as they seek to use your services. By taking away the payment step for your client they can focus on what they came to see you for and you never miss a payment.
Keeping a card on file, for most people, is a win-win scenario!
Send Multicolored Statements
In the event that you don’t collect from your clients and you notice that the balances are starting to pile up, you will need a few strategies that will get you paid for the work that you have done. First, at the start of each session with your clients check their balances and make sure they are caught up. This may lead to some uncomfortable conversations with your clients but it is critical that they catch up paying your practice. You can’t work for free and the client understands that reality.
Second, if you need to end up sending statements, start with normal paper. If you don’t get a response, change the color of the paper that you are sending to your clients. You can send statements on red paper which may indicate that the mail that you are sending is urgent. You can also buy a stamp that says “Outstanding Balance” or “Final Notice” so you can stamp the envelopes before you send them.
People throw away mail that doesn’t look imposing and your statements might be going to the trash. Do something to get their attention and allow them to focus on the outstanding balance that you have.
Finally, make sure that you have multiple ways that people can pay you. If you have a payment link that limits the steps a person needs to take to pay you. You can also take payment via check or credit card. Allow people to call in and give you information to pay. The more ways that people can pay you the better.
Hire Someone to Collect Patient Balances for You
The final way that you can fastrack payment from clients to your practice is to hire someone to pay you to collect those balances. Practice Solutions offers a service where you can send out statements to your clients and clients can call in to pay their balances. This allows you to avoid some of those uncomfortable conversations and allows a trusted third party to do the collecting for you.
Finally, you could hire a collections agency that allows greater leverage in collecting payment although using a collections agency should be a final step on the road to collecting money from your clients.
We would love to help you clean up your patient aging and be able to increase your revenue and profitability. Feel free to reach out to us if you find that you have questions or concerns when collecting from your clients.