Bad-debt Control Checklist to Improve Physician Practice Cash Flow – Part I

With what seems like a continuous decline in physician reimbursement, it is imperative that all practices collect every dollar they are entitled to. However we all know this is not always the case. As such, mechanisms and systems need to be in place to avoid bad debt situations as much as possible. The following is a bad debt control checklist you can use to assess whether or not a medical practice is prepared to minimize its bad debts. Any “no” answers should be investigated immediately, with recommended solutions following soon thereafter. I have provided commentary to aid you in this analysis.

Do written guidelines exist on the collection of self-pay accounts? ___ yes ___ no

Every practice should have written guidelines to guide its employees on how to collection self-pay and patient-pay accounts. These are accounts where the patient might not have insurance at all or accounts where the amount shown is the amount the patient personally owes after his or her insurance has paid.

Are collection guidelines reviewed and revised periodically?___ yes ___ no

Medical practice in today’s environment does not remain constant and so neither should the internal policies of a practice. This is especially true of collection policies and one main reason why these policies should be reviewed and revised at selected points in time. For example, many practices used to refuse to press patients for payment of their overdue accounts for a variety of reasons; but with insurance reimbursement declining, this type of policy may have to be reconsidered.

Are collection guidelines clear, concise and sufficiently detailed to serve as a working reference to personnel? ___ yes ___ no

You want a document you can give to an employee and after reading it, they can understand what their job duties are. This not only minimizes training time but it provides the employee a guide he or she can refer to on an ongoing basis.

Do business office personnel receive formal training on collection guidelines before beginning work? ___ yes ___ no

Up front training can prevent and sometimes even eliminate many of the day-to-day problems that occur within the practice. Just don’t throw an employee into the water and assume they can swim. The good practices take the time to train their employees as soon as they start work and then on an ongoing basis thereafter.

Do employees receive formal training on collection guidelines after any revision, or otherwise at least annually? ___ yes ___ no

Here is the main point about a “guideline”: Do the employees follow it? Employees are almost always going to tell you that they are but what are the results? Are the guidelines really working? There must be a continuous assessment to ensure they are working and effective.

Does management solicit employee suggestions for changes in policies and procedures? ___ yes ___ no

The good practices constantly solicit employee feedback. Listen to them – they often have good ideas on how to improve various aspects of how the practice operates.


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