How to Deal With Delinquent Accounts

Being busy is great, but like any business, you need to get paid for the services you perform. Delinquent accounts are a reality, but you can keep them at minimum by knowing why they occur and considering the following:

Why Do Delinquent Accounts Occur?

Many chiropractic offices have numerous accounts with small amounts owed to the practice. Though the amounts may be small, they often add up to large sums in total. This can jeopardize the practice’s financial success if not dealt with.

Why don’t patients pay their chiropractic bills? There are five major reasons:

Deductibles. Some patients don’t understand the concept of deductibles. For example, they may be confused about when their deductibles start or how changes to the insurance plan affect their deductibles. (Surprisingly, co-pays typically are not a problem. Most health insurance cards spell this out as the patient’s responsibility.)
“Arrangements” with previous chiropractors/healthcare professionals. Some patients have an expectation of special arrangements with billing so they won’t have to pay deductibles. Watch out for patients who say something like: “I have good insurance, so bill as much as you can.”
Health plans without chiropractic coverage. If you are listed in a patient’s employer book of providers, a patient may assume coverage includes chiropractic care. However, just because you are a provider under the employer’s overall plan does not mean the patient’s specific plan includes chiropractic coverage. Also, a patient may suddenly be without coverage for chiropractic care if an employer changes plans midyear.
No referral. Though most health plans do not require a referral from a primary care physician, a few still do. Unfortunately, this information is often not readily available on the card, and many patients are not aware of the need for a referral until after they already sought chiropractic care.
Limited number of visits. Most plans have either a limited number of visits or they require a treatment plan after a certain number of visits. Once again, patients may not know these specifics.

What is the common reason with why patients don’t pay their chiropractic bills? They don’t expect them! Patients don’t pay the bills when they are unexpected and don’t feel responsible for them.

Credit Card Payment Tip:

Practice write-offs typically go down significantly when you accept credit cards for payment. People are more willing to swipe a credit card than write a check.

Minimizing Delinquent Accounts

Let’s face it: It’s only realistic to expect some delinquent accounts. But the trick is to keep these as few and far between as possible.

As noted above, patients are reluctant to pay unexpected bills. So, educate your patients about their financial responsibilities, and you can reduce your billing nightmares. Here are a few tips:

The front desk should photocopy the insurance card for any new patients or patients with new cards. Make sure they copy both sides; the back of the card is where the contact numbers are listed.
Ideally, your office manager will contact the insurance company while the patient is completing the paperwork. It can be helpful to have a form listing all of the needed information (e.g., deductible, co-pay, number of visits, referral needed, procedures covered and not covered, pre-authorization for MRIs, and the name and extension of the person spoken to). Preferably, this information will be available before the patient is taken back to a treatment room, though this not always possible. However, your staff should make it a priority to obtain this information as soon as possible.
Your office manager should explain the financial responsibilities and ask whether the patient would like to proceed.
Have the patient sign a form indicating agreement and understanding of the financial responsibilities.
Submit a claim form on the first visit. That way if there are any problems with billing, it will be addressed early. (Personally, I believe a practice should never allow large delinquent accounts to occur—they should be stopped before reaching that point.)

Dealing with Delinquent Accounts

After you have sent 2-3 bills in 2-3 months (depending on the situation), it’s time to address the delinquency with a letter requesting payment. The tone of this letter is very important and should:

Be personalized. Do not address the letter “Dear Patient.”
Acknowledge your understanding of financial burdens. Do not assume that every patient with an overdue bill is a bad person. Some patients may be embarrassed about their financial situation and need understanding.
Give payment plan options, so patients will understand you are willing to work with them.
Mention you don’t want this financial situation to affect their health, which is your main reason for wanting to resolve the matter.
Clearly explain why the patient is getting a bill.
Include your signature to make the letter more personal.

Share these letters with staff and colleagues, so you can get feedback on the tone and translation. Edit them as necessary.

Turn Write-offs into Marketing

Though not all possible all the time, you may be able to turn your delinquent accounts into marketing for the practice.

A few years ago, our practice decided to really clean up our delinquent accounts. So, toward the end of the year, we sent letters to patients with accounts we decided to write-off (accounts I was certain would not have been paid). The letter stated we wanted to do something nice for the holidays. And rather than sending their account to a collection agency, we were wishing them a happy holiday, and that they could start the New Year off with a zero balance at our office!

People were so touched they cried and hugged me. Best of all, they not only became patients again, but they began paying on time!

When to Throw in the Flag

Let’s face it. No matter how hard you try or how organized you are, there will always be times you will need to either send an account to a collections agency or write it off. Before you send a letter to the patient announcing this final step, ask yourself:

Is the amount large enough to send to a collection agency? (Keep in mind sending the account to a collection agency could hurt your reputation as a caring professional and may even result in a complaint to your chiropractic board.)
Have you already spent too much time and money trying to collect a single co-pay?
Is the patient a positive person you don’t want to lose? Or, does the patient cause problems for your front desk and operations staff?
Is there a chance a mistake was made and the patient should not have been billed in the first place?
Are there personal reasons to be addressed, such as a death in the family or a lost job?

If you decide to write off the account, make it clear that you will not refuse future care, but that payment will be due at time of service.