Medical Practice Collection Letters that Work – With Samples

Brandon Betancourt March 7th, 2012

2 Comments Latest by COMMENTOR NAME

Medical practice collection letters that take a more positive tone can get better results

Collection letters that go out to patients usually have very stern language. For example, a letter may mention that unless the patient sends payment in immediately, they will leave the practice no choice but to send them to a collections agency. Another typical phrase is “final warning” or “3rd and final attempt,” or “delinquent” in bold letters.

The assumption is that the debtor is blowing the practice off. And our response as collectors is to intimidate and scare the debtor into paying us. In essence, the letter is saying, pay us or else! But does it work?

In my experience, these types of letters are not very effective. It may scare a few people, but they mostly do two things.  If the debtor is a seasoned debtor, meaning someone who is accustomed to carrying a lot of debt, their response is, “You are going to send me to collections? Get in line.” In other words, the letter creates apathy.

The other response is offense. And when people are offended, they get angry. Nobody likes to be called delinquent; even if they are. And when a patient is angry with the practice, the likelihood of them paying is less. Why? Because nobody likes to pay people they are angry with. 

Thus, strongly worded letters that threaten and intimidate patients have unintended consequences. In our experience at our practice, I think I made more people mad than actually sent payment in when I used this type of firm language.  

Consequently, I began to think about how I could make our medical practice collection letters more effective. And what I determined was that people that owe our practice money fall into four groups:

1) They don’t understand the bill, so they put it off.

2) The bill is too high for them to pay outright, so they put it off.

3) They truly missed the bill or forgot to pay it.

4) They never had the intention to pay, regardless.

For people in groups one through three, I think the approach should be different. Instead of fighting with fire, our approach is to fight it with water, so to speak.

And for those in group four, there are other ways to deal with them. But a “3rd and final attempt” stamp on the statement isn’t going to suddenly make them realize they should send payment in. 

So how do we fight with water instead of fire?

In our practice, we send patients that are delinquent a letter too, but we try to use a different approach. Our letter’s objective is to simply make them aware that the bill is overdue. No threats, no intimidation.

We also make an attempt to acknowledge that the bill may be difficult to understand, but we can help them. So if they have questions, they should ask us. We are here to help.

Lastly we do allude to the fact that if they don’t call us soon, or settle the bill, things could get difficult for them.  But we don’t mention the words “collections company” or “attorney.”

Before we began using these letters, I estimated that maybe 5% of patients sent in payment after they received a collection letter. With our newly worded letter, we received a 30 to 40% response rate.

If the patient didn’t respond to our first letter, we often give patients a call. The call is not intended to make patients feel guilty or to bully the patient, but rather be informative.

“Hello Mrs. Smith, we wanted to follow up on our letter that we sent last week. We noticed we haven’t received payment for little Timmy’s sore throat visit last month. Did you have any questions, could we help you explain your EOB? We also wanted to let you know that we can set up a payment plan to help you with your medical bills.”

Sometimes, we are unable to reach the patient, so we send them another letter that basically reiterates our main points.

You can see samples of these two Sample Medical Practice Collection Letters now.

Of course, there are patients who slip through the cracks and disregard our attempts to collect despite our best efforts. Our practice employs other approaches that fall outside of the scope of this article.

I would also like to point out that this approach doesn’t eliminate other best practices, such as verifying eligibility, collecting copayments and deductibles at the time of service, just to name a few. One still needs to do all those things.

But my intent with this article is to provide a different perspective in your collecting efforts, to think differently about how to approach this, and continue offering empathy, compassion and education, even when the patient is not in the examining room.

Brandon Betancourt is an administrator for a private pediatric practice in the suburbs of Chicago. He blogs regularly about running a small private practice at PediatricInc. You can follow Brandon on Twitter @PediatricInc

2 Comments »

    Cheri Freeman said:

    Great article Brandon, thanks so much for sharing. It would be nice if Kareo had a collection letter feature incorporated into the system! Hint-hint! :)

    Friday, March 9, 2012 - 4:59 am

    Kathy McCoy, MBA said:

    Cheri, thanks for your feedback–we will pass that along to the development team, although I think it’s on their radar. So many good ideas, so little time–but we’re getting there, one release at a time!
    Always appreciate your suggestions!
    Kathy

    Friday, March 9, 2012 - 1:11 pm

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