Medical Practice Management
Jan 28

Do you give free credit to your patients?

You might ask, what does this mean? We don’t give our patients free credit or a loan.  It is true that physician practices are not consciously loaning money to patients. But if you have the following processes in place, you are unconsciously loaning money to patients:

  • Letting patients not provide required information
  • Letting patients not pay at time of service
  • A patient collection cycle that allows too much time for payment

Some physician practices disagree with me about the term “letting patients” and instead want to remind me that it is not the practice’s fault that the patients don’t provide insurance information when they need it and don’t pay their copays and prior balances.  My response is that better performing medical groups have policies and procedures in place that will ensure that things are done right the first time. In order to stop providing free credit to patients, physician practices need to establish financial policies that they are willing to share with their patients and to enforce.  For example:

  • Patients will provide insurance information or identify an alternative method of paying during the appointment/registration phone call.  When the patient says they don’t have access to their insurance card right now, the physician practice will have a standard script that explains to the patient that they are willing to wait for them to go get it.  The practice staff will go on to explain that when they have the patient’s insurance information at the earliest moment, they are in a better position to make sure the patient’s billing is handled correctly.  If the practice still does not have the necessary information from the patient two days before the appointment, the policy should state that you call the patient and let them know you will need to reschedule them.  Note: your policy will state that you are only going to do this for non-emergent patients.
  • Your physician practice’s policies need to address when patients will receive a financial policy that they will sign explaining when payments must be received and what will happen if the policy is not followed, i.e., no new appointments being made, finance charges being added to their bill, etc.
About Reed Tinsley, CPA

As a top advisor to physicians, I help increase practice profits by delivering hands-on, expert medical accounting/tax support, practice counsel, and revenue-building strategies. Read more →