APMA News - February 2012 - (Page 44)

Small Business 101 From the American Academy of Podiatric Practice Management, the voice of practice management for the profession. By John Guiliana, DPM How to Collect Unpaid Bills QUESTION: I am having trouble with patients who owe me money. The economy has affected how people pay their bills. Please help! ANSWER: While a sour economy certainly has an impact on our patients, they have an obligation to pay their bills just like we do. When times are tough, people prioritize their obligations, and it’s up to us to rearrange their priorities. The longer an account goes unpaid, the more difficult it becomes to collect. That being said, the biggest problem is that many medical practices have no collection department. Practices rely on the accounts receivable clerk to act as the collector, and that person is already too busy getting invoices out and keeping up with customer payments. Many practices do not have a set procedure regarding credit policy, so they “shoot from the hip” and just hope insurance companies and patients pay them on time. Before you engage in any collection efforts, it’s important to speak to your attorney about state laws you must follow. If you break the law in the collection of a debt, the debtor may sue. With rare exceptions, no patient account should remain uncollected for more than 90 days. By 120 days, very serious measures should be taken. After the original bill goes out, your practice should send a notice once the due date has passed. Notices should be sent out at 30, 60, and 90 days. During this time, the practice should attempt to reach the patient by phone. If there is no response or if the patient does not make payment arrangements, your options are: 1. Send out a pre-collect notice with options; 2. Turn it over to a collection agency; or 3. Take it to court yourself. Pre-collect notice: Pre-collect is an interesting concept. For a small fee per account, a collection agency will send a notice to the patient that says, in essence, “We’re monitoring this account. Make arrangements to pay or we’ll take over the account.” The patient then has the chance to pay the practice directly. You can add options for the patient to call to make special arrangements or to seek credit counseling to help pay the bill. But if the patient doesn’t respond at this point, don’t waste your time. Collection Agencies: There is a place for collection agencies; you do not have the time to deal with an account that isn’t paying. Most pastdue accounts should be turned over to a collection agency at 120 days. 44 APMA News February 2012 Generally, a collection agency does nothing but collect pastdue accounts for businesses. By law, they are considered thirdparty collectors, which means they must follow state and federal laws in the collection of a debt. When you turn the account over to collections, you have “sold” the account to the agency. I do not recommend you pay any fees up front, but rather choose an agency that will collect on a contingency basis. If they manage to collect an account, they might receive up to 50 percent of the money. So, if someone owes you $500 and the agency collects it, you would receive a check for $250. The account would then be considered paid in full. An agency may decide to sue the debtor, and the agency would then cover all costs for this action. Sometimes the agency will garnish a debtor’s paycheck until the debt is paid in full. Most agencies worth their salt have a representative who works directly with you to Always be completely prepared before you walk into court. Be professional. explain their procedures. As with any business, it is important to check out the collection agency with the Better Business Bureau, Secretary of State, or other area businesses that may be able to shed light on its credibility. Do not use a collection agency from out of state. Take it to court yourself: Understand what is expected when you use the legal system. You may hire your own attorney or go to court by yourself, depending on the amount of the debt. Always be completely prepared before you walk into court. Be professional. Do not become angry with the debtor. Going to court is time consuming, so unless you or one of your staff is trained in this area, you may want to use a collection agency instead. But with some proper training and organization, you should be able to manage quite nicely on your own. As always, consider the amount owed and the time involved. Much of the nastiness of collection can be eliminated by establishing clear policies and procedures in your billing and collecting department. If you don’t set a clear policy, you will soon regret it. People will set priorities about who they owe, and your practice might be at the bottom of that list. n Contact Dr. Guiliana at Jguiliana@aappm.org.

Table of Contents for the Digital Edition of APMA News - February 2012

APMA News - February 2012
President’s Message
Contents
APMA Social Media: 2011 Success and 2012 Stategy
The National in 2012: Celebrating 100 Years Advancing Podiatric Medicine
APMA By the Decade: 1922–1931
Profiles in Progress: Student Recruitment
2011 Podiatric Practice Survey: Sources for Patient Referrals
Confronting the Residency Shortage
Reimbursement
Federal Advocacy Forum
APMAPAC Chair Report
IT Consultant
Website Wisdom
Technofile
Young Voices
Small Business 101
APMA All Stars
Awards Nominations
In Short
Worthy of Note
Resolutions Submissions
Affiliates Corner
List of Affiliated Organizations
Insurance Advisor
New Members
Death Notices
Annual Scientifi c Meeting Registration Form
Annual Scientific Meeting Sponsors
APMAPAC Update
Development Update
Classified Advertising
Dates to Remember
Advertising Index
10 Questions

APMA News - February 2012