Dealing with Bad Debt
Many chiropractors share the same problem: bad debt. When a patient does not pay within a month or two of treatment – or not at all – bad debt is what you’re left with. This debt creates havoc within accounts receivable, and if left unchecked, it can hurt your ability to pay yourself and your staff. Among young chiropractors specifically, this debt can impede your ability to pay back your educational loans and the other expenses incurred while setting up your practice.
So what is the game plan for collecting debt from delinquent accounts?
- Implement online collection tools. Your website can be transformed into an online payment center for your services. Paper bills can become a thing of the past, invoices can be emailed to clients, and you can encourage them to pay via the website. Make sure to display the website prominently wherever you can.
- Have an official policy. Carefully explain to clients what your policy says and what it means. Have them sign the payment policy form to show they understand how and when collections will occur. Ideally, you want co-payment the day treatment occurs. Make that clear, and if they cannot pay you should instruct them to use online payment options.
- Offer automatic payments. Work with your bank to set up a system that allows your patients to pay by auto debit.
- Train your front desk. Your front-line employees should generally deal with all billing issues. Your job is to ensure they are trained and that they understand the official policy. A good practice is to have staff request co-pays or full payment upfront during patient check-in. If patients are not prepared to pay, make sure your staff is ready to guide them to the next option. Describe how they can log on to your website and pay, or how they can authorize an auto-debit option. Have brochures or business cards with the web address clearly printed on them, and offer to email them the instructions along with a link to the website.
- Prioritize receivables. The easiest bills to clear up are those of the lowest amount owed. Your staff will want to seek payment on those because clients will usually have that amount of money readily available. You still need to go after the larger, tougher cases, however, because those clients owe you a significant amount of cash. Get patients with bigger balances to agree to workable payment schedules.
- Offer incentives to employees. Getting patients to pay, especially those individuals who haven’t paid in months, is especially challenging. Set up a monthly staff-incentive program for meeting predetermined collection goals. Bonuses are great motivators.
To avoid bad debt, you should, in summary, implement online collection tools, have an official policy, offer auto payments, train your front desk, prioritize receivables and offer incentives to your employees. Employing these practices should allow you to reduce your bad debt and have a financially healthy practice.