Of the important business processes in any practice, two routinely have substantially less time invested than they should: marketing and receivables. Practices tend to shy away from marketing because putting yourself in front of a new audience is a challenge for many people. Plus, the expense has a degree of variability that allows it to be cut first when other expenses – like repairs – pop up. For receivables, let’s face it, asking for money is hard especially when a patient or responsible party is right in front of a front desk person. We’ve all seen too many videos where those types of situations go very wrong.
As a result, we see practices that have poor on nonexistent receivable systems. Basically, if we get paid, that’s great. If not, we move on. However, no business can survive without income, and too many “we’ll let it slide this time” situations lead down a slippery slope to insolvency.
Poor systems tend to either be ones where there is no real system or effective control in place. For example, a single voicemail might be left if the patient falls behind on payment. People will just ignore that and move on with their lives without payment. Poor systems can result from poor execution. A practice can have the most elaborate policy designed by the leading consultant in the world, but if these systems are occasionally or never put in practice, what’s the point of those systems?
Any solid receivables system starts with communication with a new patient at the time they start treatment. Whether you deem this opening procedure, training the patient or another term, the policy and expectations must be laid out completely and clearly. Completely and clearly go hand in hand because way too many people just blow through that part of the new case presentation. That person must go through treatment expectations, patient compliance, risk management, possible opt-ins and then receivables among other things. Something is going to get short shrift, and it’s usually the uncomfortable topic of money.
To deal with this, the receivable system must be concise. Payments are due on the 1st, late on the 10th and we strongly recommend a card for automatic payment. That oversimplifies things a bit, but it does cover about 90% of the program.
Finally, and this is the hardest part for most people: there must be a real downside to not paying. Repeated texts and phones calls represent an approach that can impact one level of people. Threats to a person’s credit rating can impact others. The potential for real health risks without continuing care can be a very strong message that discontinuation of service due to nonpayment will be a bad thing. Whatever the practice chooses, communicate that and follow through on it. Otherwise, these are just empty words and patients who don’t want to pay over time will continue not to pay.
One more important note: as we’ve mentioned in other areas, the bedrock for any good system is quality data. If your ledger shows a patient owes $200, you should have a simple and accurate accounting of how you got to that $200. In addition, contact information must always be accurate and up to date: physical addresses, phone numbers, e-mail addresses, etc. all must be right to avoid having communication sink into an undeliverable abyss.
Do you feel like your practice is letting receivables get disorganized and delinquent? We offer a free A/R analysis and cleanup to get you back on track. If you are interested, please e-mail us at marshmallow@adbmgmt.com and we’ll get on taking a look at that for you.