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Has Collections Become a Problem? Angela Evola

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Do you have any patients wearing braces that they aren't paying for? To answer that question, look at your accounts receivable. If 10 percent or more of your customers are behind on their payments, then your practice faces a collections problem. Likewise, if you have a bad-debt percentage of five percent or more (meaning your practice will likely never collect on those bills), then your losses are too high. And even if your practice's accounting books are healthy, you have treated patients that pay too slowly or end up not paying your invoices at all. Follow these tips to get your cash flow flowing again:

1. Head Off Payment Problems
As a doctor, you're probably a fan of the old saying, "An ounce of prevention is worth a pound of cure." Follow this wise advice to inoculate yourself from problematic patients. The best way to do this is to run credit checks as your new patients are signing up with you. Develop credit scoring procedures and set your contract terms based on their credit scores. Any of the three major credit reporting agencies – Experian, TransUnion, and Equifax – can provide you with patients' credit scores for a nominal charge. For patients who have credit scores that do not meet your standards, require them to put down a deposit.

2. Call In a Third Party
It is likely that some of your patients will not have the cash reserves to put down a deposit. In these cases, encourage them to sign up with third-party financing. Financing companies can also help if your patients are looking for lower monthly payments than you can offer through your in-house payment plan. In these cases, the third-party firms will be taking on the risk of non-payment, not your practice.

3. Set Up Recurring Drafts
Some doctors give patients the option of choosing between monthly mailed billings or recurring bank drafts. You don't need to offer the choice. Require your patients to pay by bank draft, and there's no reason to feel bad about it. Many businesses, from fitness centers to Netflix, have such policies in place. Your patients are used to it, and your practice will be paid on time.

4. Make Patients Aware of Terms
When setting up an in-house contract, make sure your staff reviews the terms and conditions with the patient before any signatures are dashed along the dotted line. In particular, highlight the date when payments will be considered late and the late fees the patient will incur. The purpose of a late fee, after all, is not to nickel and dime the patient but to encourage on-time payments. Demonstrate up-front that your payment terms will be taken seriously.

5. Create and Consistently Follow a System
In the end, the best way to demonstrate that you take payment terms seriously is to actually take them seriously. Too many medical practices follow up on missed payments only when someone in the office can get around to it. This strategy (or lack thereof ) gives patients the impression that their orthodontic bills are no big deal. Instead, develop a systematic protocol to follow, and schedule it into your group's workflow. Consistency is the key to success.

A system can vary from practice to practice, but here are some good guidelines:
  • On your billing cycle date(s), send out statements.
  • Include 30-day past-due letters and 60-day past-due letters with your statements.
  • Follow up on past-due letters with phone calls. Call past-due accounts every other day until your office makes contact with the responsible party and can discuss payment arrangements. Include current balances in the discussion.
  • Set aside some extra time each month (after hours or on a Saturday) to track down hard-to-reach accounts.
  • Create status codes for past-due accounts, and train staff to keep notes on collection efforts. That way, anyone looking at the patient file will know where things stand.
  • Cross check late-paying patients against appointments. When patients come in for treatment, ask about payment.
  • Verify patients' addresses and phone numbers on a regular basis.
6. Keep Collection Calls Courteous
The purpose of collection calls is to give patients an opportunity to bring their accounts up-to-date. An aggressive approach will not make them pay faster and can drive patients away. If patients simply don't have the resources to pay their bill, you can recommend removing their braces and putting them in a retainer until their financial situation improves. Ultimately, your goal is to keep them in your practice where they will continue treatment and remain a source of referrals. Truth be told, collection calls entail a balancing act. You should be compassionate without being a pushover. You should not have patience for endless excuses, but you want to be empathetic of hard times. Know your patients, and listen to their explanations. It might take practice to get the tone of your calls right, but it is possible to be a caring and understanding doctor while expecting to be paid for the valuable services you provide.
Author’s Bio
Angela Evola leads the patient collections services department at Ortho-Synetics, a business services firm that assists orthodontic and dental practices utilizing a full-service, turnkey management approach to address all non-clinical practice functions to gain better efficiencies and profitability. For more information, visit www.orthosynetics.com.
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October 2025
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