Dealing with deadbeats

Dealing with deadbeats

Banta tells dentists to get patients' home address and mailing address because they're not always the same. "If they only give you a P.O. Box, that could be a red flag -- they may expect or have had financial problems. Find out where they actually live."

If a patient has ignored your 30-day and 60-day statements, it's time to make a call. "Your office's payment collector should be cool, courteous and cordial on the phone."

If patient decides to pay, state you want the full balance due. "If they send a check for $5 and you deposit it, then you've just made arrangements for them to pay you $5 in monthly payments, and it's legally binding," says Banta. "Send that check back and request the full balance."

"And don't ask 'When can you send it?'," says Banta. "That lets them set the date. Instead ask, 'What day should we expect the payment?' If they don't pay on that date, follow up with a phone call the next day."

Keeping on top of late receivables is a must. Just do the math. Every month your patient's balance ages past 90 days, you lose 7 percent of the value based on the labor, stamps, and paper to ask for that money. Your goal should be to collect 98 percent of all revenue and write off just 2 percent as bad debt. No more than 5 percent of your outstanding payments should be over 90 days old. But Banta notes that the average for dental practices is 25 to 45 percent. Ditto insurance claims--only 5 percent should be 90 days past due. Yet the average is 15 percent.