Past Due Accounts
February 2025
Managing past due accounts is a pivotal part or revenue cycle management. Once a balance begins to age the likelihood of collecting payment rapidly diminishes. Some studies show that a debt aged 90 days has a 50% of being collected while those aged at 180+ days plummet to just a 20% chance of being collected. The easiest time to collect from patients is when they are in the office.
There are two key components to past due accounts: (1) maximizing fund recovery on outstanding balances; (2) minimizing future balances.
(1) Maximizing Fund Recovery on Past Due Balances
Create a clear practice policy, including a detailed step-by-step, on how outstanding balances will be handled.
Planning Considerations
How are statements sent? Mail or email or both? Is a phone call made? Text message?
When does a balance become past due? After how many statements? When is it bad debt?
What payment mechanisms are offered? Do you have an online payment portal?
Who is your collections agency? What are their amount thresholds and criteria?
Why do they have an unpaid balance? Why wasn’t it collected at the time of service?
Acknowledging that any recoupment of past due funds is better than none, consider offering in-house payment plan options on larger outstanding balances or discount if balance is paid in full.
Tips for Outstanding Balances
Encourage your front desk to collect not only the patient’s estimated portion for an upcoming appointment, but also collect any outstanding balance on account.
We recommend all past due accounts receive a phone call in an attempt to collect the balance.
Let the patient know how many statements have been issued and their account is eligible for collections. Follow practice policies, and offer payment plan or full payment discount, if applicable.
If no one answers, be sure to leave a voicemail that does not include any protected health information (PHI).
Document all contact or attempted contact in the patient’s record.
(2) Minimizing Future Balances
Review your treatment estimate process to determine why outstanding balances are occurring and how they can be minimized in the future. Learn more in our blog about Insurance Verification & Estimates (https://www.dentalbillingconsulting.com/blog/verification-estimate). Again, the easiest time to collect from patients is when they are in the office. You may also want to consider collecting upfront deposits and/or revise your cancellation policy.
Have we said it enough? Okay, one more time: The easiest time to collect from patients is when they are in the office.
Dental Billing & Consulting Professionals is always here for your as a revenue cycle management resource. Our services are customized to each practice’s specific needs and goals. Call or text us at (860) 435-7344 any time for a free consultation on how we can support you in achieving your practice vision and goals.
Managing your approach to past due accounts is essential – especially now. Over the years, many states have enacted policies and legislation regarding the collection practices of medical debt. Last month, the Federal Consumer Financial Protection Bureau finalized a new regulation barring medical debts from nationwide credit reports. This new rule is set to become effective in March 2025. (https://www.consumerfinance.gov/about-us/newsroom/cfpb-finalizes-rule-to-remove-medical-bills-from-credit-reports/). We encourage you to reach out to your collections agency to learn more specifically how this may impact you.