Medical Collections Specialists

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Turning over accounts to a collection agency in a timely manner

I know, I know…collection accounts sit on the back burner of the medical practice’s stove and just simmer there. No one is really that concerned about them because they have already been written off. There is really no sense of urgency to do anything with them. The truth of the matter is the longer the debt sits there, the more difficult it becomes to collect.

Many practices call us up and ask us if we can help them. They send us packages of debts that are from 2006, 2007 or possibly even older than these etc. Where have these been all of this time? Why haven’t these debtors been pursued? They more than likely have been sitting on someone’s desk languishing.  If you aren’t in the collections business you probably don’t understand how difficult it is to collect consumer debt, let alone OLD consumer debt.

A practice should only be sending a total of 3 statements out to a patient. If a patient has not paid by the end of the 3rd statement you are now looking at a 90 day delinquency. At 120 days a debt should be turned over to a collection agency in order to have a “shot” at getting that debt collected. 

Most practices are short-staffed and each staff member wears many hats. Chances are that your staff may not have the appropriate time to devote to telephone calls. Once your practice has sent 3 statements and made 3-4 calls you need to turn them over to a collection agency. A medical practice does not have the leverage to get your patient to pay that a collection agency has.

Collection agencies can and do turn over debtors to the credit bureaus if they do not pay. We send out a 1st notice, a second notice and a Final notice. In between the notices we make telephone calls. The Final notice tells the debtor that we will be reporting them to the credit bureau within 10 days if they do not pay the debt. At the end of each month we send an electronic report to the credit bureau and the debtor’s credit is affected. This black mark on their report stays there for the next 7 years. If that person seeks credit of any type their credit report will show that they owe x amount to us and they must pay it in order to get credit. Keep in mind that the credit bureau will only accept debtors with a social security number and debt that is $50.00 and higher. A collection agency can and will damage a debtor’s credit if they refuse to pay. That is something that a medical practice cannot do.

A collection agency also has the resources to work with collection attorneys if the debt is large enough.

Again, I cannot stress enough the importance of getting your delinquent accounts turned over quickly to a collection agency. Your chances of ever getting your money are reduced each week or month that you hold onto those accounts. Below is a graph regarding commercial debt but it shows how the percentages quickly drop as time goes by:

The CCAA’s most recent survey was performed in June 2001. They polled 115 member commercial collection agencies, which in the aggregate handle about 80% of claims placed with professional commercial collection agencies in the U.S.

The results, presented graphically below, show that the probability of full collection on a delinquent account drops dramatically with the length of the delinquency.

Do your practice a great favor and turn those accounts over no later than 120 days. You believe that by holding on to them and having your staff make calls that you will hang on to more of your money but the reality is that you will lose money. Make an effort to really look at your collection procedures and ask an expert to help you. You will be glad you did.

February 19, 2010   Posted in: Uncategorized

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