Credit guidelines: The secret weapon to reduce stress and increase collections
By Jan Keller

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When was the last time you and your team had a meeting to review and collaborate on your expectations regarding collections? If you're like many, the honest answer is "never." No surprise, then, that most administrative team members are frustrated. The doctor wants them to "collect the money" and "make sure the patients pay," but that is the only guidance they are given.


Does your practice have established credit guidelines?
  • 1. Yes
  • 2. No

Even worse, doctors often sabotage the efforts of the financial team by making special arrangements with the patient in the treatment room, putting them in an uncomfortable position when the patient informs them:

"Oh, the doctor said I only have to pay X." or "The doctor said I can make payments whenever I can afford them."

If this sounds like your practice, now is the time to sit down and discuss how your current payment arrangement system is working, and what you can do to improve it — especially with the economy making treatment acceptance more challenging than ever.

The good news is implementing an effective payment system is not difficult, if you follow a few simple rules. First and foremost on the list is establishing credit guidelines that everyone knows and has agreed upon and everyone — doctor included — follows.

Good credit guidelines fulfill a multitude of objectives, including:
  • Provide a written document for internal use that describes your guidelines in detail.
  • Develop parameters to measure job performance for the financial coordinator.
  • Establish a training protocol for new team members.
  • Explain how payment arrangements will be conducted with your patients.
  • Allow for flexibility for your established patient to make their payment affordable.
  • Address your philosophy on "credit" and team members' philosophy. If you do not agree on these core values, your guidelines are doomed to fail.
Other areas that should be discussed with the entire team:
  • Whether you offer a pre-payment courtesy.
  • Whether you quote a fee range for new patients.
  • How you handle the medical "shopper."
  • Whether patients will be required to complete a credit application for third-party financing, such as Care Credit.
  • When and if billing charges apply. Make sure you check with your lawyer/accountant how to handle applying these charges if you have not established this in your practice previously.
Insurance issues must also be discussed. It is vital the entire team understands the doctor's philosophy on this subject, and how submitting claims will work in your office. Do you accept assignment of benefit, for instance? Are you participating with insurance carriers and adjusting the difference between your fee and the "allowance" of the insurance carrier? If so, how does that translate into expectations of payment from the patient?

Your credit guidelines should also address how to handle these common occurrences:
  • Broken appointments and late cancellations. Are patients charged for a first offence? Second? If so, how you will notify patients of this practice?
  • Bounced/returned checks. Will charges be applied and how will financial arrangements be handled for these patients in the future?
  • Emergency patients. Your entire team should know your expectations for emergency patients and how their finances will be handled. Are finances different if they are an established or a new patient?
  • The patient "handoff." Doctor, are you comfortable explaining your fees but get caught discussing how the patient will pay for it? Have you and your team practiced your part in handing off the patient to the team member whose job it is to discuss and negotiate payment arrangements? Don't get caught up in making deals, which devalues your clinical expertise and puts your financial coordinator in a corner.
Arm you team with this "secret weapon" and put the stress of undefined and undocumented payment arrangements behind you forever. Your team will thank you, your patients will thank you, but most of all you will begin to get paid fairly and consistently for the excellent work you and your team provide.

Wouldn't that be nice?

Janice Keller has 25-plus years of experience in dentistry clinically, and as an office manager and software trainer. Now, as a practice management consultant, she provides high-quality, customized practice development and education to clients and their teams.