Front Office or Front Line?
Is your office more like a battleground?
I took a position as an Office Manager in a two doctor general practice six months ago. The previous Office Manager retired after being here twelve years. My problem is that I inherited a huge (over $300,000) accounts receivable (they produce $90,000 a month) plus a large credit balance sheet. I showed it to the doctors and they asked me to “clean it up.”
I started a collection system of three letters and calls to follow-up. The patients that I call say things like this: “Well no one ever asked for money before, how do I know you are correct?” Or, “I sure miss Tessa. She was so nice. She let me pay whenever I wanted.” And even this one, “How dare you send me a “dunning letter. I have been coming there for years. I want to speak to the doctor!” One patient did call to complain and said that the only reason she comes to our office is that we allow her to pay $25.00 a month on her long standing balance. What is the best way to handle this without losing patients and causing stress?
Dear Juanita Rose,
With change comes resistance and distrust. In changing the status quo, you have breached a standard that some patients relied upon in order to have their dental care. This is a fact, not a criticism. You are right in wanting to set up a collection policy and get the accounts receivable to a healthy level. Delivery of this new system to existing patients is challenging. Complaints about your services should be used to enlighten not alarm. Taking the extra time to work out a solution is in order. A standard policy for all patients is the goal. I would recommend the following system be put into place:
- Write a letter or have the doctors write a letter to all patients introducing you as the new Office Manager. Some information about your interests, family, pets etc. This will help transition you to authority.
- Establish a written financial policy or payment option plan. Explain to patients that you have not been successful as a lending institution and are a “small business” and cannot extend monthly payments any longer. Present this with every treatment presentation creating a standard of operation.
- Offer a payment plan through CareCredit services in your payment option plan and assist the patient in applying for the funds.
- Work out a satisfying payment plan with existing accounts that are not able to get credit or pay off the balance. Be sensitive to their situation as long as they keep their agreement. Follow-up on these accounts is time consuming.
- Be diligent in collecting estimated co-payments and deductibles at every visit. Inform the patient as to the amount due at the next visit.
When looking at the credit balance sheet do not assume that these figures are correct. Many offices return this money to patients without checking the allowable contract fee and adjust to it. If your doctors are signed up as PPO (Preferred Provider) providers, on some plans, there will be “adjustments” made to contract fees when you receive payment. Even leaving these credit balances on account for patients to use next time can hurt the practice collection if the credit balance is not a “true credit balance.” You will have to compare these balances to the EOB (Explanation of Benefits) to see if they are accurate. Make sure that you have the most current fee schedules on file for all PPOs for which you are signed up as providers. (This year I received several updated fee schedules from major plans.) This will insure more accurate treatment plans and fewer adjustments to accounts. Bill all claims out at UCR. Always tell the patient that the insurance payment is “estimated based on the information provided by the insurance company.”
When sending out statements, a “balance forward” statement is guaranteed to get you a phone call from the patient. They do not know what the balance represents. Send a detailed statement. If you have never met the patient, then include a hand written note on your business stationery and send your own card offering to explain and help them understand the statement.
Most important, you must have support from the doctors. If the system is to work, the doctors must never get involved with fees or payment arrangements.
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