I am looking for a friendly but formal letter to send to a few patients who have outstanding accounts with me and have not responded to our efforts to date. In the past we've sent a self-addressed stamped envelope with a letter asking the patient to please take a moment and settle up the account as it has been overdue by two months. Can you offer some advice on how to be forceful and to the point and not risk being unkind?
Collection problems are a symptom. It's the price one pays for extending credit, whether you're a credit card company, mortgage company or health care provider.
You can treat the symptom, and I'm happy to share some languaging, however it would be wiser to address the underlying cause. Which is to prevent a patient's outstanding balance from getting out of hand in the first place.
What's ironic is the belief that pressing for payment will cause reactivations and referrals to disappear. But it's the reverse. Patients don't refer to a doctor who is seemingly spineless and doesn't respect him or herself enough to expect payment. And patients don't return to practices to which they owe money. Getting this financial management piece figured out is important.
Here are a couple of strategies.
Strategy #1 – Set a credit limit
You're probably not running a credit check on each patient or requesting three years worth of tax returns. When blindly offering credit to someone who wants it you'd want to be clear how much you'd be willing to lose should they not pay you. For illustration purposes, pretend you're willing to lose $100. Make that your credit limit. Credit card companies do this.
"I'm willing to extend you a credit limit of $100. If you outstanding balance ever exceeds that amount I'll need some form of payment before seeing you."
Oh, and then enforce it. Doing so will reduces collections problems and increases patient respect for you.
Strategy #2 – Let someone else carry the debt
If you don't want to be the patient's bank, I totally understand. It's not what you went to chiropractic college to do.
The first step is to accept credit cards. It's astonishing how many practitioners don't. Apparently the 3% fee is too much to wear. Get over it. It's the cost of doing business in the twenty-first century.
The second step is to arrange for Care Credit. These folks specialize in helping finance health care expenses. Let someone else deal with collections.
Strategy #3 – Create a collections procedure
Pull out that procedure manual of yours and turn to the collections procedure and see how it works in your practice. Oh, don't have an up to date procedure manual or collections procedure? Now's the perfect time to create or update it. And then meticulously stick to it. Make sure you include any type of hardship agreement you'd want to offer.
Keeping a sharp eye on your receivables is especially important for a small business. It's helpful to have a documented procedure describing when phone calls are made, when it's escalated to certified letters and if or when it's turned over to collections.
There are three collections letters in my 50 Patient Letters book that may be helpful. Here's the suggested text to one of them:
When you began care in our office you agreed to the importance of keeping your appointments, performing home-care procedures, and keeping your financial obligations current.
So we're at a loss. We can't figure out why you still haven't cleared up your outstanding balance of $_______ which is now ____ days overdue.
What can we do to help resolve this matter?
Perhaps we can develop a payment plan or make some other arrangements that can help you clear up your outstanding balance. By working together we can help put this behind us.
Please call my staff or me so we can develop a plan that will work for both of us.
Thanks for the question!