Chasing bad debt is always ethical for independent practitioners, argues Martine Reuben
We often hear from our consultants that they do not feel ‘comfortable’ chasing unpaid invoices. The key to dealing with this problem is not whether you chase these patients, but how you chase these patients.
What we refer to as ‘gentle chasing’ is always appropriate. But what is gentle chasing?
For us, this is an initial phone call to introduce ourselves as the accounts manager and explain that there is an outstanding invoice.
The manner has to be non-threatening and soft – more of an inquiry to check they are aware of the debt. Always make a plan to speak again on a particular day and time and make sure you constantly follow this up.
Most consultants would rather write off a payment than get involved with chasing for the money. We always advise our consultants that ‘no debt is a bad debt’ because everyone has the right to be paid for the service they provide.
Clearly, this simplistic statement has many grey areas when it comes to outstanding invoices for consultants.
Often the situation is very sensitive. The patient may have recently undergone a life-threatening operation and, in some cases, the patient may be deceased.
We are often faced with such a situation and certainly do not see this as an occasion where gentle chasing is inappropriate. On the contrary, is not chasing for payment an admission of responsibility?
Just because something feels uncomfortable, it doesn’t make it unethical. In this particular case, our advice is to wait a respectful length of time and then call the next of kin directly to express your sympathy and give a gentle reminder.
Often you will need to wait for probate and go through a solicitor, but it is worth sticking with the process, as payment will eventually be made.
[quote]As a general rule, there is absolutely no need to threaten patients with debt collectors. If chasing is handled correctly, then this need never be an option. [/quote]Having a third party on hand, who is emotionally unattached to the patients, is a very cost-effective way to handle this uncomfortable area.
Reminder phone calls to a patient’s mobile phone that are consistent, gentle and friendly are incredibly effective. Ask for a BACS transfer or take a credit card payment over the phone, rather than asking for a cheque to be sent.
Most importantly, always get a mobile phone number and an email address at the initial booking and on the hospital registration form. We find that those who have the best cash flow are those who take the most thorough information from the start.
There are five main reasons why patients do not pay invoices:
1. The patient confuses the consultant’s bill with the hospital bill. When a patient goes to a private hospital, their credit card details are requested, but no payment is taken, as it is used as a guarantee for hospital payment – blood work, X-ray, theatre costs or nurses. The patient makes the assumption that this covers the consultant’s bill also, so the invoice is discarded.
2. The patient has simply forgotten. Human error prevails and the invoice is put to the back of the drawer with intention to pay that never materialises. These patients need a gentle nudge and usually pay immediately accompanied by flowing apologies for the delay.
3. Patients are not aware of an excess. Often insurance companies do not inform patients that some or part of the bill will be the patient’s liability. The patient is therefore left in blissful ignorance that the full bill has not been covered by the insurance company.
4. The patient may also hope that they never get chased for the money . . . and, in many cases, they never are.
5. There is sometimes confusion over private hospitals self-pay package schemes. Private hospitals will often offer a package for procedures, which include either an initial consultation and the procedure or the procedure and a follow-up consultation.
Often this is not communicated to the consultants, so they, in turn, bill for the consultation without realising the patient has already paid for this within their package. In this case, payment needs to be chased from the hospital as opposed to the patient.
Generally, most invoices are left unpaid due to practice inefficiency. It is impossible to bill efficiently and create good cash flow if the invoicing process is chaotic.
Approach private practice like it is a small business and the patients are your customers. You have to take responsibility for taking the proper information from your patient to be able to invoice effectively. This means employing the correct systems and procedures from the very beginning.
Ultimately, no independent practitioner – no matter which specialty they practise in – needs to assume a financial risk when treating a patient.
Martine Reuben (right) is co-owner/director of medical billing company MediAccounts