Guidelines for Extending Credit to Patients

It’s a known fact that all patients aren’t always covered in full or in part by insurance. And, of course, if you are a veterinarian, few of your clients are covered by insurance. Although there are "care-credit” companies today that, for a fee, will take assessing credit-worthiness and collections off your hands, not everyone wants to utilize such a service. Therefore it behooves any practice owner to have some guidelines for extending credit to patients/clients. Below are some guidelines that will assist you in determining which patients/clients to extend credit to and how to go about collecting on those accounts.

1. Assess the patient’s/client’s credit worthiness before extending any sort of credit. Have the patient fill out a credit application and verify the information supplied. If possible, arrange a credit check on the person.

2. Always charge for any credit extended, using a monthly percentage or flat service fee.

3. Ensure that the patient/client fully understands and agrees to the terms of the payment, and have them sign an agreement covering the payment terms.

4. Ensure that statements are accurate and are being mailed out every month on time, without fail.

5. Monitor all accounts closely so you know who has become delinquent. Take immediate action on any account over 30 days past due. The more delinquent the balance, the more difficult it will be to collect. Call the patient right away and make arrangements to bring the account current.

6. Use some sort of accounts aging sheet, whether hard copy or computerized, to monitor all accounts. This acts as a valuable collection tool because the status of an account can be assessed along with an immediate determination of those patients/clients who are no complying with the terms of their payment agreement. Your accounts receivable information should be analyzed within ten days of each billing period. Patients/clients who have not made their agreed upon payments should be sent a second billing. Including handwritten note saying "Your payment is beyond the time you established to pay your account” can be very effective. Follow this up with a phone call.

7. Patients receiving a third billing should receive a statement with a more direct memo. If payment is not made within ten days the patient/client should again be called.

8. Patients/clients with delinquent accounts who are not making any attempt to handle the matter should be sent to a collection agency. Prior to doing this you could send a letter stating, "We have been informed by our accounting firm that because your account is considerably overdue, it will be turned over to an attorney for immediate legal action if payment of your balance is not made immediately.” Using a letter such as this, prior to turning the account over to an attorney or collection agency, creates the image of the account now being controlled by an outside, stronger source. This may create greater credibility and enhance the collection process.

9. Flag past due accounts on a patient’s chart. In this way, when the patient comes back in it will be easy to spot who needs to be addressed regarding delinquent payments.

If you follow these guidelines when extending credit, you’ll find yourself with less collection problems and enhanced cash flow into the practice.


Author Bio :


Jaff alvo is an experienced author, who has written articles on various health and financial subject. Please view my link on Silkin Management Group and Silkin Management Group.