Most patient collection letters I’ve seen come off very threatening and standoffish. They are written to intimidate. For example, they’ll say, “Final Notice” or “your account will be sent to collections if you don’t respond.” The notion is, “you better pay now or else… ”
We used to send out letters with these words and most of them were ignored. My guess is that at best, 1% of parents would respond to them. We probably offended more parents than those that actually sent payment. Clearly, this was the wrong approach. With this process I learned that the harder we push, the more resistance we got. Which is counterproductive.
The way I see it, there are two reasons why someone hasn’t paid their medical bill:
- They’ve genuinely missed the statement or put it away and forgot to pay it; in which case, we don’t necessarily want to make threats, but rather inform them of their delay.
- They are purposely blowing you off. If this is the case then:
- They don’t have the means to pay it out-right.
- They don’t understand why they are responsible for the balance and not their insurance company.
- They’re too confused with your bill and the boatload of other bills from all the different providers they visited. As we know all providers and hospitals bill separately, so when a parent is not aware of how the system works, getting five different bills from five different providers is overwhelming. So they put the bill away. Out of sight, out of mind.
- Or they are simply, purposely blowing you off.
In a recent paper published titled, The next wave of change for US health care payments, 
McKinsey&Company [somewhat] agrees with me. Their paper mentions that many assume incorrectly that consumers are unable or unwilling to pay their health care bills. The research suggest otherwise. The paper contends that lack of financing options, inefficiencies in billing practices, and consumer confusion are all major drivers of nonpayment.
With this in mind, we have a different approach in patient collections. My focus is still wanting for patients to pay their bills, but instead of threatening them with legal action, or sending them to collections, I approach it by trying to offer them help. By lowering our guards a bit and reaching out rather than growing aggressive with every letter seemed to be a better more human approach.
Here are a couple of examples of our letters. Click on the highlighted link below for details. Feel free to use them anyway you’d like.
Patient Collection Letter Examples
As always, I’d love to get your feedback. What is your approach? Have you found an effective way to approach patient collection? How about your letters? Are they effective?
Likewise, I’d like to hear you feedback if you think I’m full of it, if you think I’m missing the mark or if you don’t think this is a very effective way to approach patient collection letters.
I'm a practice administrator at a Pediatric office located in the western suburbs of Chicago. I write mostly about running a small business that happens to be a medical practice.
Brandon, I think these are some of the best-written collection letters I’ve seen. The letters come across as being very sincere. I would like to post these on my blog for others to use, if you’d be willing.
We do have some patients who refuse to pay until they have been turned over to an outside collection agency, which is so frustrating. Because of these patients who habitually wait until the bill is 90+ days old to pay, I have been considering adding the % that the collection agency charges to their amount due. This would mean changing our financial policy and notifying patients of the change. The examples I am talking about apply to radiology, not to primary care services. Maybe because patients do not use those services often, they feel justified in not paying the bill. I’d be interested to hear what you think of this plan and what your readers think.
Great post!
Mary Pat
These patients know very well how the system works.
I have not patience for patients that abuse the system. And that is why we instituted our credit card policy. http://pediatricinc.wordpress.com/2009/10/11/does-your-medical-practice-have-a-problem-with-bad-debt-here-is-a-solution/
Every once in a while, someone slips by because their credit card was denied and we can’t get them on phone.
Those patients, we send to collections. But before we do that, we mark-up their balance 40% to cover the collection’s company cost. It is part of our financial policy which is also posted on the blog if you want to check it out.
So, if the collection company does collect the balance, we at least get 100% of what we were entitled without incurring additional cost.
I would absolutely implement the collection company’s charge. Change your financial policy, then give it some time so people become aware and then implement within a 3 to 6 month period.
By the way, feel free to use the letters however you’d like.
As always, thanks for the comments.
Many patients are distracted or careless but not “bad” patients. We’ve found that by systematically and diplomatically reminding these patients, through a series of letters and calls, many will pay. Once patients pay they’re more likely to come back for a visit. The ones that don’t, you can feel better about putting them collections.
Collection of unmet deductibles, copays, and coinsurance at the time of service will completely eliminate the need to chase after patients for money. It takes slightly more work up-front, but it is far far far better to do so than to chase after patients for money after services have been rendered (and the perceived value of that service greatly depreciated).
It’s good practice management, and I encourage everyone to do it.
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