Diminishing Debt: How To Reduce Your Private Practice Debt Levels

Credit control in medical billing is an area that often gets overlooked in private practice, despite its operational importance. It is time-consuming and usually an uncomfortable part of practice management – after all, working in healthcare is usually down to a desire to help people. Switching the conversation to finance can feel unnatural.

As a result, it can be easy for practices to build up high levels of outstanding patient debt.

Debt is the biggest bugbear for consultants and is generally the number one issue they need help with. Chasing payment is tricky in any industry, but when your focus is on treating your patients, trying to pursue unpaid invoices can significantly damage your patient journey at the final hurdle.

What are the common issues you face with debt?

The average consultant is often left with between 10-15% of their fees unpaid. Unfortunately, neglecting overdue payments can make them even more difficult to collect in the long run.

Here are some of the typical problems that may be causing your debt levels to rise:

  • Building debt – when you’ve already got historic debt under your belt, the constant addition of debt recently raised can start making settlement a time-consuming and ongoing battle.
  • Ineffective debt monitoring – without appropriate technology and processes in place, you can lack the knowledge or clarity surrounding how much debt is actually outstanding.
  • Poor relationships with insurers – if you haven’t built up a rapport with your patients’ insurance providers, this can often result in a slower payment turnaround time.
  • Unclear payment terms – if your payment options aren’t discussed prior to treatment this can lead to unhappy patients either being chased months (even years) down the line due to lack of clarity.
  • Void insurance invoices – if invoices aren’t submitted correctly or within a certain timeframe to an insurer, they can eventually become ‘void’ or risk the policy limit being exceeded by other treatments. Payment will then unexpectedly become your patient’s responsibility - which is much harder to collect.
  • Unnecessary write offs – if you have poor credit control processes in place it can be easy to just dismiss the outstanding debt rather than chase your patient appropriately, negatively affecting your profitability.

Shouldn’t my medical secretary be chasing patient payments?

Many consultants use their secretary, or a similar administration team member, to collect their debt. Which is completely understandable, they’re across your whole business and know what is happening best.

Well, therein lies the problem - they’re across the WHOLE business. Debt collection can be incredibly time consuming so the likelihood of your secretary having the capacity to do it effectively is going to be slim.

Your secretary will also be as heavily involved in the clinical side as they are the financial, which can easily fracture their relationship with your patient.

Your patient will see your secretary as a ‘friendly face’ at a potentially worrying time. If they are then having to chase them for money that is owed, it can taint their experience with your practice or put them off reaching out again if they have questions.

So how can you avoid raising debt levels in your practice and effectively collect the payments you’re owed?

How to handle your medical practices’ debt level

There are some simple ways you can try to mitigate the risk of gathering debt in the first place.

First and foremost, you need to bill patients promptly. While it may sound obvious, it’s not uncommon for practices to be running weeks, or even months, behind in their invoicing.

Raising invoices for self-pay patients should always be the priority of your practice as they come with the biggest risk. The quicker you raise an invoice to a patient, the higher the chance there is of your patient settling. They’ve just had a positive experience with you for treatment, so they’ll be more inclined to get in touch - particularly if they have any queries about the bill.

The same goes for insurance companies – invoicing the insurance company needs to be done quickly for the best chance of it being settled in full. If you run behind with invoicing the insurer, there is an increased risk of policy benefits no longer being available or there being a limited timeframe to submit claims. Once the patient becomes liable for the payment, it’ll create more administration work for you, and you’ll run the risk of the patient challenging the bill amount.

It’s also really important to keep on top of your remittances to make sure all invoices are reconciled correctly. This is particularly true for insurance payments; ideally you should reconcile all insurance payments the same day as they are received, as the sooner you know if there is any shortfall for the patient, the better (for all parties involved). Having a thorough and up-to-date record of how much debt you have in place, will make it that much easier to control your debt levels.

The most efficient way of managing your debt levels, however, is employing an expert billing and collection service. While it may seem counterintuitive to manage your debt by incurring further cost, there are many advantages to outsourcing this area of your practice management.

Why you should use a medical billing and collection service like Bill Medical:

  • This is what they do best - many billing providers have decades of industry experience and know-how, with an expert team that specialises in collecting payments on your behalf while providing a sensitive and positive patient experience.
  • Precise processes and clear information – the credit control processes in place are prompt and water-tight, and your patients will receive better clarity on payment terms and methods (such as single click online payments).
  • Enhanced payment options – they’ll work with your patients to determine how best to pay their invoices, including collecting upfront payments, direct debit options or instalment plans.
  • Better relationships with insurance providers – having great rapport with insurers ensures a seamless collection process and faster invoice turnaround times.
  • Ability to collect historical debt – the experts know the best ways to recover those old, outstanding invoices so that you don’t have to write them off. At Bill Medical, we’ve even managed to collect invoices that were more than eight years old!
  • Advanced technology – having a dedicated platform to monitor and track your billing and debt levels will help you keep on top of all your financials quickly and easily. Here’s what our own Doctor’s Dashboard looks like, which provides you with real-time data on any device.

Get to grips with your debt

Having any level of debt is inevitably disheartening, especially when you’ve put all your effort into helping your patients and creating the best outcomes possible for their health. But all hope need not be lost! Keeping on top of your billing and payment collection just requires the right level of attention and a sensitive approach.

We’re very proud to have achieved the lowest debt rate in the industry at 0.28%. Many other medical billing companies run at around 0.5%. This has been accomplished through our unique and personal approach to working with consultants and patients to realise the best possible outcomes, for all involved.

In fact, we’ve even helped a recent client reduce their debt by 78% in just six months!

So don’t despair, there is a way out of debt and improving your profitability as a practice. Simply implement our useful tips above or get in touch to see if outsourcing is the route for you.