There are many potential strategies to consider with a view to both minimising and dealing with patient debts in your practice - the most appropriate approaches depending on what your clinicians and practice management are most comfortable with, and in keeping with your patient group and overall strategy.
Determining a clear policy for your practice supports your team to manage this tricky area, and helps to streamline payments and cashflow. In creating this policy, regardless of whether payments go direct to your clinicians or the practice, it’s a good idea to consult with your clinicians at the drafting phase so everyone’s on the same page and supporting one another.
Of course, a more recent challenge that’s developed for many practices is getting payments for telehealth appointments, so below we include suggestions for both in-person and telehealth appointments, as well as potential inclusion for your debt management policy.
Debt Prevention
Clear and communicated payment methods
Advising your patients when payment is required, as well as expected fees, at the time of making their appointment, can make a big difference. You can also let them know what payment options are available, with the most common being:
Cash – great in that you receive it on the day, but does require your practice to maintain a float, and get to the bank.
Cheque – very much less common these days, but still accepted by some practices, particularly for longer term patients and older patient populations.
Debit / credit card – easy to take the payment, though will generally attract merchant fees. It’s worth negotiating these with your merchant facility – ideally upfront, but an annual review reflecting volume can also result in a fee reduction.
Bank transfers – used by some practices for larger payments, but administratively challenging where your admin team doesn’t have access to the practice’ bank records.
Upfront deposits – commonly required where patients have previously been poor payers / regular no-shows, or for large assessment or procedure payments.
Payment plans – often used for larger amounts, or put in place where a patient is experiencing financial hardship, or to pay off a debt.
Payment on the day of service
For many practices it’s standard policy to require patients to pay on the day of service. Getting your team to communicate this requirement at the time of booking can really help to avoid challenges when the patient comes in, as well as a sign at reception where patients see it on check-in.
Telehealth appointments have thrown a spanner in the works on this front, creating a different admin environment without the patient face-to-face post their appointment. As many patients can forget to pay after a telehealth appointment, some methods you might consider include:
Taking prepayment for all telehealth appointments – either the day prior/earlier in the day of the appointment, or directly prior if your admin team sets up the telehealth session for the clinician. For phone call appointments, clinicians can also transfer the call to reception at the end of the consultation.
Using online booking platforms, where payment can be taken at the time of booking.
Where your practice decides to send invoices post the appointment, it can be really effective to do so via SMS, with a link to the appropriate payment method.
Debt Management & Collection
If the team member in your practice who’s responsible for monitoring and following up collection of outstanding money isn’t familiar with all the related features of your medical software, it’s worth them looking into how much automation is possible, how to generate reports etc. A more automated process will generally save time, plus create a record in the patient’s account – making monitoring and future reference even easier.
The frequency you choose for reviewing debts might be weekly or fortnightly, depending on the level of debt outstanding. We know one practice that had patient debt of over $100,000 over 3 years! Once debts reach this sort of level, a concerted effort is needed to get on top of them. It’s also harder to get payment the longer it’s been since an appointment or service. So a more regular schedule is important.
Some escalation steps to consider including in your policy, based on how long it’s been since the appointment:
Day of/day after - an email or SMS.
After 10 days / 2 weeks - If the debt is more than X number of days (whatever you feel comfortable with), calling patients rather than sending letters is generally more effective. Also sending a copy of the invoice by email or post, will ensure that they have all the information in front of them.
A week or two after that - more regular calls, up to every day or two.
Another 2 weeks after that - debt collection.
Debt Collection
Whilst it’s the least preferred option, using external debt collectors is a genuine and worthwhile avenue for you practice to include in your practice policy.
Often referred to as “selling your debt”, the underlying concept is that you sell the figure owed to you, to another organisation. Debt Collectors generally work on a percentage or flat rate per collection. They may also have minimum debt amounts they will take on.
The process usually starts with the patient receiving a forceful and formal letter, outlining what’s required of them – payment and timeline. From there your debt collectors will escalate as needed, including the debtor being taken to court. Most have clear points in the process when they will communicate with you, and when they’ll seek your permission to take the process to the next step. It’s worth you doing your research prior and ensuring that you’re happy with the content of what will be sent to your patients, and your ongoing options for input into the process.
Your Debt Management Policy
In addition to the points covered above around timelines for different actions to be undertaken, you might like to consider your policy incorporating:
Advising patients that they need to pay the debt before future appointments can be booked.
Acceptable payment plan terms.
At what point you’re willing to write a debt off as uncollectable.
How and when a history of poor/late payment or written-off debts is recorded in the patient’s medical record.
A clear process for communicating to patients the payment terms and conditions for your practice.
Incorporating who “owns the debt” in your clinician service agreements – thereby clarifying who has input into decisions regarding debts that arise.
Your practice environment – you know your practice and patients best, and a personalised approach to your community is needed.
Nobody wants to have to make decisions about each individual instance of debt, so a practice policy is a necessity! If you’d like some help getting yours underway, the Augmentum team is more than happy to assist – just get in touch or find out more on our website www.augmentum.com.au.
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