Keep Your Revenue Cycle Short

Gone are the days of sending out a past-due patient statement every 30 days for a year. To increase the likelihood of receiving payment, it’s best to collect close to the time of service, well under 90 days.

Every practice should have systematic collection policy that includes patient calls, letters, or billing notices, and turning over the account to a collection agency after a period of no activity or response. Staff may be tempted to write off balances older than 90 days rather than pursue the collection if the office process or policies are unclear.

Here are two sample collection cycles:

1. More Active Cycle

Once your practice determines the balance is the patient’s responsibility:

  • Send a statement the day you receive the explanation of benefits.
  • Send one additional statement in 30 days, followed by:
    • A collection letter at 45 days, and
    • A phone attempt to collect at 60 days.
  • Send the second or “final notice” collection letter at 75 days.
  • If you don’t receive a response, send the account to your collection vendor at 90 days, unless you have a particular reason not to for that patient.

2. Less Active Cycle

  • Send two statements 30 days apart.
  • Send a collection letter at 75 days, allowing the patient 10 days to respond.
  • If you don’t receive a response, send the account to your collection vendor.

The timing of the statements and letters is arbitrary but should be consistent for all patient accounts. The goal of the timing is to determine quickly how likely the patient will pay the bill.

“Most patients will pay the balance with a reminder or two, but if they don’t attempt to contact the office, pay a portion of the balance, or set up a payment plan, the practice should assume they have no intention of paying no matter how long the collection process continues,” said Laura Palmer, author of TMA’s Revenue Cycle Management: Keys to Success.

The cost to send statements and time pursuing small balances is better spent on pursuing insurance payments, marketing and building the patient base, and improving time-of-service collections, Ms. Palmer said.

Revenue Cycle Management: Keys to Success is available in the TMA Education Center. You also may want to view these two TMA on-demand webinars: Financial Policies Do’s and Don’ts and Business Boot Camp: Take Charge of Your Finances.

For customized help with improving your billing processes and procedures, contact TMA Practice Consulting for a Revenue Cycle Assessment. Call a consultant for more information at (800) 523-8776 or email[at]texmed[dot]org.

Published July 27, 2017

TMA Practice E-Tips main page

Last Updated On

July 28, 2017

Originally Published On

July 27, 2017

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