Collecting past-due monies is more challenging today than ever—especially in the field of dentistry. We hear all the excuses: I forgot my checkbook. … I never carry a credit card. … Why can’t you bill me like youused to?
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We have actually done it to ourselves over the past years by allowing our patients to pay whenever they want to. We send them three “we really mean it … this is your final notice” statements, and then never take action! In this article, Iwill outline the steps necessary for effective, efficient collections.
- First and foremost, always, always, always inform your patient of your fees and your financial policy before you do dental treatment.
- Second, make financial arrangements before treatment starts.
- Third, always follow through with whatever you promise — whether it’s collecting a past-due balance, following up on an insurance claim, or answering questions that are important to them. Otherwise, your patients will not feel like they’re being taken careof and that they are not understood and respected. With the proper information, they can make the right decisions about the proper treatment and payment options.
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I recommend outlining the treatment plan to your patients in writing. Use easy-to-understand terms, not complicated dental terminology. Develop a treatment plan that encompasses the entire process. Set goals for your patients and put them in writing. Have a disclaimer statement at the bottom of your treatment plan that allows for unexpected changes in treatment. Always have the patient sign a consent form allowing you to do treatment on them and a truth-in-lending agreement that explains fees and payment options. Changing how and when you accept payment from your patients is one of the most challenging situations for a dental practice. If your patients have been allowed to pay from a statement for 20 years and you suddenly change the rules, you will be met with serious objections! First of all, be excited about the change!
When you are confident, your patients don’t have as much of an opportunity to object. Example: “Mrs. Jones, your fee for today is $700. We estimate your insurance will pay $500. Your estimated portion is $200. How would you like to pay today … cash, check, or credit card?” Mrs. Jones may reply, “Just send me a statement like always.” You can reply, “Actually, we are so excited, our accountant was just in and set up new payment guidelines. We can now take payment right here in this office by cash, check, or bank card. So, which would you prefer?”
If Mrs. Jones becomes upset, simply state that she couldn’t possibly have known about the change in policy and offer to send a courtesy statement with her and include a stamp and an envelope. Ask Mrs. Jones to put that payment in the mail as soon as she gets home, and you will follow up in five days if have not received a payment. This is a simple solution to alleviate any adverse responses to your change in payment policy. Now Mrs. Jones knows about your new guidelines for the next appointment!
When tracking past-due payments, it is very important to remember to be consistent. I firmly believe in the four-notice rule. That’s three notices of past-due payment status before taking collection action. First, send your current statement. Then, send a gentle reminder 30-day past-due notice. Calling the patient at this time is up to you. However, I believe in giving the patient the benefit of the doubt here, and I don’t call on the first past-due notice. If you do not receive a response, sendthe 60-day, second past-due notice and follow up with a phone call to the patient. If still no response, send the third and final past-due notice in the form of a 90-day reply. After a set time, take collection action after that third and final past-due notice.
Remember, we lose credibility when we repeatedly send final notices and never take any final action. Not only is this unproductive, but it can get you in legal trouble in the United States. According to our Fair Debt Collection Practices Act (state laws may differ slightly), sending more than one final notice is considered harassment and the patient can take the dental practice to court! Another great collection resource is to look online for the state law rules at The State Attorney General’s office. This is a website dedicated to informing you about your state laws in reference to collection, NSF checks, small claims court, etc.
Whatever the policies are in your dental practice, be certain to put them in writing and always follow through. Fifty percent of our patients listen with their ears, and the other 50% listen with their eyes. Most patients need to see something in writing before it becomes believable. Keep track of how many notices are sent to each patient, and write detailed notes regarding conversations about collection attempts and promises made. Never write your collection notes in your progress and treatment notes. It can be perceived by the courts that you were only interested in the patient’s money. Always keep a separate record of collection calls and notices sent. Print monthly reports to keep track of payments received and notices sent to patients. And remember, for legal purposes, it didn’t happenunless you write it down.
