Make sure you get paid

If many private practices worked a little harder on curing the backlog of money owed, then they would be £100,000 better off.
Garry Chapman reports


Most consultants work extremely hard at making sure their practice is well run from a medical perspective.
They have typically spent many years being educated in their chosen specialty, they ensure their education continues on a yearly basis, and they put effort into fostering good relationships with the GP community.
Of course, they also spend time and energy on making sure the secretary, who is the focal point of the practice, gives patients the best possible experience.
Having done all this, it is disappointing that most doctors do not spend as much time as they should in making sure they get paid for the work they have carried out.
Even if the work is invoiced on time and at the correct price, we often encounter practices where a large proportion of the work remains unpaid.
This can happen for many reasons, but, from our experience, it is normally down to the fact that the practice is not set up to chase the outstanding invoices.
It does not matter if the invoice is to a self-pay patient or an insurance company – the fact remains that all outstanding invoices need to be chased.

Huge debt
This is true for all businesses, but due to the special nature of the health sector where the consultant is mostly dealing with individuals rather than organisations, it is of paramount importance.
When our billing and collection firm takes on new consultants, we are constantly surprised at the level of debt that a practice has amassed and the length of time it has been outstanding.
The amount of each backlog can vary and is relative to the size of the practice, but it is not unusual for an established practice to have a figure close to £100,000 – and, in many cases, far more than that.
The breakdown of these backlogs can be quite diverse and is not limited to self-pay patients. Although the largest amount outstanding is normally for self-pay clients, the outstanding amount owed by insurance companies is not far behind.
The reason for this is that a lot of practices think that once they have invoiced the insurance company, then it will automatically be paid. In reality, that is not true.
There could be a whole host of reasons why a bill does not get settled.
It could be that the patient has not filled out a claim form, or the insurer requires further information on the treatment – an increasingly common request for some specialties – and even that the patient is no longer with that particular insurance company.
Our analysis on the backlogs that we have dealt with this year shows that the amount outstanding from self-pay patients accounted for 30% of the total, with the insurance companies accounting for 25%. The remaining 45% was split between other organisations such as embassies, hospitals, solicitors (for medicolegal work) and other commercial organisations.

‘Excess charge’ problems
The self-pay total includes amounts not covered by patients’ policies. This is an ever-increasing issue, as the range of policies on offer are many and varied.
In order to control the costs of the premiums, insurance policies will have elements which are not necessarily covered. These will be due to benefit limits, patient excess on the policy, co-share policies where the patient agrees to pay a percentage of each invoice and for many other reasons.
The above statistics are based upon millions of pounds we have raised as ‘backlogs’, so they are a good representation. But the actual figures can vary depending upon the nature of the specialty and location of the practice.
In our experience, this is rarely dealt with correctly within the practice, typically because of time constraints, lack of resources and not having the skill set within the practice to chase money.
On top of this, there is always the dilemma that each practice faces when dealing with the patient regarding financial matters.
This can result in the practice having a large amount of outstanding debt, which is either chased on a sporadic basis or not chased at all – resulting in debts that amount to a significant sum of money.

Garry Chapman is managing director
at Medical Billing and Collection

Put some basic principles in place:

  • A chase process needs to be implemented so that,when raising an invoice, there will be stated payment terms which, once exceeded, will trigger an action. This would typically be either a phone call or a reminder letter. But the exact method of chasing will often depend on whom the invoice is addressed to, as each payee needs to be dealt with differently.
  • The chase process must be robust and followed on a consistent basis. Once the process has started with each invoice, it must be followed until conclusion. This is because the older the debt becomes, the less likely it is that it will get paid. Also, if the process is not followed consistently, the person who is being chased may not think it is being treated seriously.
  • The process that is implemented must be constantly adhered to and it must follow logical steps. It must state when you will phone, at what point you should send out chase letters, what should be the content of each chase letter and, ultimately, what action you should take if you cannot collect the outstanding amount. That action may be the small claims court or using a debt collector.

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