Here’s the first rule of billing: send the bill.
Funny? Screamingly obvious? Yes, but you would be surprised how many practices wait until sending out the first bill, and never pursue – even passively – the money owed to them. Then there are the ones that never pursue a bill, even after 30 days with no payment.
A physician authored article in Family Practice Management tells the story of a practice that delved into their A/R and learned a lot about their practice and their finances in the process. For example, the practice was carrying balances where I would have been asking for
payment on the patient’s credit card – let the credit card issuer charge and collect interest. They allowed balances to be carried on elective procedures such as vasectomies and IUD insertions. For new OB patients, a payment plan was not being set up nor enforced early on in the pregnancy.
I’m a big fan of credit cards. The author suggests that the credit card companies have gotten people used to paying off large bills over time. First, the card issuers are collecting interest, Secondly: a medical practice is not an credit card company. Take that Visa and Mastercard, and if necessary, add American Express and even Discover. Your cost – the discount rate that you pay the bank – should be under 2%. If it’s higher, negotiate, or change banks.
My last suggestions are these:
Get bills out within 2 weeks of service. After 30 days, if the insurance carrier hasn’t paid – bill again, and after 45 days, start calling. With patients, by 60 days, make a phone call. Politely call to remind the patient that there is still a balance due, and when can you expect the payment. You, of course, will be happy to take a credit card over the phone. In many areas, you may want to have staff work a later shift (until 8 at night – generally, calls cannot be made after 9PM) to catch people at home.