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READER TIPS

A 30-day collection agency letter cuts the A/R days in Atlanta office

A four-physician surgery practice has reduced its receivables significantly with a collection approach that begins when a bill gets to be a month old.

At 31 days, every account with a balance greater than $50 gets turned over to the collection agency, explains Anjelica Alston, practice manager for Piedmont Colorectal Associates in Atlanta. But there’s no actual collection work. Instead, the agency sends the patient a “diplomatic” letter saying payment is late and requesting payment in full.

The letter is written on the agency’s letterhead, but it tells the patient to contact the office to make the payment. And while the agency stays out of the picture, the letterhead gets strong attention. Most patients pay within about a week.

The preliminary work continues for 30 days and includes a second letter plus an automated phone call, again telling the patient to contact the office.

After 30 days, Alston reviews the list of outstanding accounts and decides which to turn over to the agency for standard collection work. Thus, no time is lost. Preliminary collection attention begins at 31 days and actual collection at 60 days.

The approach carries good psychology, Alston says. Many patients don’t view their medical bills as priority and so put them at the bottom of the stack. By contrast, they expect consequences for not paying their other bills – they know their electricity or water will be cut off. The letter emphasizes that the office’s bill is also a true bill and that there are real consequences for not paying it.

“And they pay,” she says. Many call and pay by card. Patients no longer “let the bill slide for two months,” she says. And while the office still sets up monthly plans for those who can’t pay in full, plan requests have decreased significantly.

The office began the early approach only seven months ago, and Alston says “immediately there was a huge difference in payments.”

What’s more, very few patients have complained about getting the letter. Several have asked if the outstanding bill will appear on their credit report, and the office’s response is no, “it’s a service we use, and it’s just a reminder.”

The expense, she says, is $12 per account. But the return on investment is good, because most payments are made within 45 days, and far fewer accounts go to actual collections.


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