Often times, good patient care is confused with providing free services to patients. If the latter is the reason why a physician is in practice practice then it's understandable but mostly, it's not the reason. A practice that collects fees from some (those who pay) and not from some others (those who don't pay) is contradictory in its approach.

Patient collections is one of the most confused areas of practice management.

To collect or not?
Do we see a "free" patient the next time she schedules an appointment?
How often do we keep sending statements?
Do we send a patient to collections and if so, at what point of time?
How do we collect from a patient who receives the practice's check from an insurance company and considers it her own money?

Patient statements: The patient statement process actually occurs during posting received payments off of Explanation of Benefits (EOBs) from insurance companies. It isn't a separate process. Efficient practices send out patient statements almost immediately after care is rendered and not after a month after service. Every effort is made to collect the amount when the patient is at the practice - not after she leaves. When a patient is unable to pay her co-pay, the practice hands the patient a self-paid envelop and schedules time for follow-up.

Channels of payments: Some practices try to save money by not accepting credit card payments. In fact, they tend to lose more money by not providing an additional option for patients to pay. Payments by phone, web, mail, and in-person must all be accepted.

Number of patient statements: Typically, practices send three patient statements followed by phone calls. This process is followed by "demand letters" that indicate to the non-complying patient that there's a possibility of handing over to collections.

Patient collections: After sending demand letters, the practice or the physician must decide on whether sufficient effort was made to collect and whether it's time to write off the balance or send the patient to collections. This is a highly personal decision and changes from practice to practice.

Yield v/s effort: Analyzing patient demographics and insurances reveals likelihood of payments. Clear analysis also reveals who is most non-compliant and where most of the money is stuck. Estimating yield v/s effort helps a practice focus its activities.

Billing patients when you don't participate with their insurance: If your practice does not participate with an insurance company and negotiates payments, is it required to bill the balance to the subscriber? The answer is yes. State laws mandate that every effort must be made to collect the balance from patients because she is the ultimate responsible party.

When patients receive checks from insurances: Sometimes (depending on the insurance plan and depending on whether the practice participates with an insurance), an insurance company can choose to send checks directly to patients. The practice then has to request the patient to send the statement to the practice. We recommend the following process: send a pre-emptive letter to the patient to expect practice's payment from an insurance company, attach a self-paid envelop, follow-up with the insurance company and request the check number and payment details, send another letter to the patient with the details and follow it up with a call. Most of the patients make payments at this stage. Some don't and tend to spend the money as if its their own. They need to be sent to collections.