To keep your accounts receivable in shape, ask patients to prepay or pay at time of service

Allowing your accounts receivable (AR) to get out of hand is a huge strain on any office. It is frustrating to do well in bringing in business, but then to not collect and be able to pay your bills. Here are some helpful hints to make collections easier for you.

Payment at Time of Service: Make it Policy
Make it an office policy for your patients to pay at the time of service or pre-pay. Do not let them run up a balance. It is very important to collect on the first visit; this sets the stage for the rest of their care. Patients who don’t maintain equal exchange with you will find a way to make it equal by not keeping their appointments, not referring, and ultimately, bad-mouthing you in the community. The law of equal exchange works like this: If you give me something, or do something nice for me, I want to reciprocate to make our exchange equal. If I don’t keep up my end of the bargain, I try to make it equal by finding fault with your service or doing other things to downgrade your contribution. So, when patients don’t pay, they find ways to find fault with your care.

Review All Accounts Monthly
You should set up a time with whoever does your billing and collections to review all accounts at least once per month. Make sure that you, the doctor, do this personally. Don’t rely on your staff; you need to know what’s going on. Print out a report that shows how the accounts are aging (30, 60, and 90 days), and sort by type of account—cash, major medical, Medicare, or PI, for example. Work on one insurance company at a time. It takes time to get through to an insurance company. When you finally do get through, you can troubleshoot many accounts at once. Ideally, cash accounts should never have a balance, and insurance should be 60 days out or less. If you bill insurance, your AR should not be 2.5 times greater than your current billing month. Establish relationships with insurance adjusters. If they know you, it will be easier for you to get paid.

I once lost a CA who I thought was valuable. She had been with me for more than 5 years and ran all aspects of the office. I trusted her completely. After she left, we hired my son and found a nightmare. Many of the accounts were not accurate; the former CA routinely wrote off money and forgave patient balances to keep a clean appearance for the AR. The recordkeeping was sloppy. It took almost a year to go through 5,000 accounts and put them straight. I learned another valuable lesson: If you use a computer, know how your system works. The former CA was able to hide balances by clicking a button on the AR report that asked to not show accounts with zero balances.

Another nightmare happened about 15 years ago. We had just gotten a new computer system, and at the time I didn’t even know how to turn it on. The CA who did the billing and collecting would even put a note on the computer telling the rest of us not to touch it when she was gone so we wouldn’t damage anything. Months later, my accountant suspected that she was embezzling. Upon further investigation, we found out she was. She was immediately released; but more importantly, I learned how to use the computer and became familiar with our system, Satori.

Keep Accurate Records
Log all calls once in the computer or the patient’s file. This way, you know who you spoke with and can call on the same adjustor again. It also helps you build a rapport with the adjuster. This will go a long way in the future for troubleshooting. Since our former CA left, we have gone through all the active accounts and the files. Much of the information was missing or incomplete. The files weren’t even put together properly. At the end of each month, I now go through all the new-patient files and check the information in the computer. I go through all active travel cards and each active patient’s information in the computer.

Know When to Quit
Sometimes, it might be better to forgive an account than to upset a disgruntled patient. Every upset patient will tell 11 more people about their woes, and your reputation will be tarnished. Even if you are right, patients will be disgruntled with you. That’s why it’s so important to keep the patient’s account up to date.

Work With a Good Collection Agency
The agency should be professional and work on maintaining a relationship with your patients. Our agency sends one letter to the patient before going into hard-core collections. This works most of the time; we pay only $3 for the letter, and the bill gets cleared. Our agency sends us a monthly statement on the activities of all accounts. If the accounts do go to collections, the agency can attach wages or use other collection methods. Most of the time, the agency just persuades the patient to pay the bill with his or her credit card. The agency can access credit card information to see the patient’s credit limit.

Collection Mentality
It is very important for all team members in the office to realize that paying is part of getting well. Patients’ accounts need to be up to date. These patients also get better results. CAs should not feel guilty when asking for money. The doctor should have discussed all charges with the patient before beginning care so the patients know what is expected of them. If a patient asks if he or she could pay later or only part of the bill, the CA should respond, “I wish I could do that for you; however, our office policy is that you pay at the time of service, or prepay. We do accept cash, check, or credit card. Which would you prefer?”

For 3 months, we had a CA who just couldn’t ask for money. Patients got behind in their bills and eventually quit care. This should never happen. Make sure your CA is comfortable with money issues.

If you consistently monitor your accounts, and your CAs are doing their job, your AR will be under control and the office will run smoothly. It is also easier to create a budget when you know what you will be collecting. CP

Lynne Sullivan, DC, is in practice at Sullivan Chiropractic Health Center in Pleasanton, Calif. Contact her at dcladywss@yahoo.com.