Practice Management Toolkit You Provided Treatment - Will Your Patient Pay? Steven Schwartz, DDS There are times, when no matter how hard you have tried to educate patients about your financial policies they just don’t get it. How often does a patient arrive for an appointment and announces, “I left my wallet and checkbook at home. Can you bill me?” Your initial reaction might be to say, “We made a deal with our bank. We don’t extend credit and they don’t provide dentistry.” While this could provide some momentary satisfaction, the result will be one of the following:
Current Patients When trying to determine if you should extend credit to a current patient, you can evaluate the patient’s reliability by looking at the patient’s past treatment history. A patient with a history of keeping appointments and promptly paying for treatment has demonstrated reliability. The patient is likely to pay for treatment. A patient with a history of broken appointments and a troublesome payment history has not demonstrated reliability and credit should be extended with caution if at all. Credit should not be offered to a patient with a history of being placed into collection. In most cases it is better to accept lost chair time rather than work for free. New Patients How can you provide immediate treatment with the assurance that you will receive payment within a reasonable time period? By requesting the same information banks and lending institutions require from loan applicants, you can identify indicators of the likelihood of payment. These indicators are the patient’s referral source, maturity and stability. This information can be found on the patient’s financial information form. Each indicator is given a score after evaluating information provided by the patient. The scores are tabulated and the total score is used to categorize the risk of extending credit. The possible scores for each indicator are plus one (+1), zero (0) or minus (–1). Each of these values reflects the likelihood of payment.
The scores are added for each indicator and the patient is given a final score. The final score determines the likelihood of the patient eventually paying the fee and whether or not credit should be extended. Referral Source One of the simplest ways to evaluate a new patient’s reliability is to question the source of the patient’s referral to the office. Just how did they find you? New patients usually find a dental practice through referrals, the telephone book and professional signs. Patients referred by current patients, especially those that are conscientious about keeping appointments and paying bills, receive a score of +1. Patients referred by unreliable patients receive a score of –1. These scores are based on the assumption that people associate with others with similar personalities and values. Reliable patients will refer other reliable patients; unreliable patients will refer other unreliable patients. Patients referred from other dental practices are given a score of 0 because it is difficult to know the reason behind the referral. The patient could be referred to your practice because of your expertise, especially if you are a specialist. In other cases, the referring dentist might be looking for a way to get rid of a difficult patient. Patients who indicate that they discovered your practice by scanning the phone book or driving by the office are assigned a score of –1. Unless it is a dire emergency, few patients pick a dentist through advertisements or signs. The vast majority of patients are referred by friends, health professionals and insurance plans. Patients who seem to have picked the practice at random might be looking for the lowest price or they might owe money to their former dentist. Maturity Credit and lending institutions determine an applicant’s maturity by simply looking at age, gender and marriage status. Applicants older than 25 years are considered more mature and creditworthy than those younger than 25 years. Women are more creditworthy than males. Married people are more mature than singles. When grading maturity, look at the patient’s age. Patients who are over 30 receive a score of +1, those who are 25–30 receive a score of 0 and those who are under 25 receive a score of –1. Stability The patient’s stability is evaluated by looking at the patient’s address and employment history. Three factors are considered.
Years at Current Address Lending institutions have found that people who change addresses frequently are less stable and are more likely to default on a loan than those who have lived at the same address for a longer period. If a patient shows residence at the current address for less than two years, request the previous address and length of time at that address. If the answer reveals a pattern of constant moving this may suggest low stability. Patients that have lived at their current or previous residence for an extended period of time suggest greater stability. Location of Home [Note to author/publisher: If the location of the home is going to be included in the chart at the end of the article, you need to insert a few paragraphs for background.] Years with Current Employer Patients who stay at the same job for an extended period are considered more stable than those that hop from job to job. However, before making judgment it is important to discover why the patient changed jobs so often. Try to determine if the patient has been terminated from a series of jobs, or if the patient has made a series of successful career moves. Credit Histories Credit histories can supplement the information collected in the office. They can be obtained through a credit bureau, collection agency or even your credit card company. However it can take from an hour to days to receive the requested information and thus it is not helpful in making an immediate decision. In addition, consent must be obtained from the patient before requesting credit information from an outside agency. Know the Score The following chart summarizes the grading criteria for categorizing a patient’s likelihood of payment.
Risk Categories and Rules Based on a patient’s score, you can assign the patient to one of the following risk categories.
After a patient is assigned to a risk category the following rules can be used to decide what treatment you are willing to provide.
There are always exceptions to rules. When you are not sure, give the patient the benefit of the doubt. It is okay to give gifts of treatment. When a patient comes to you with a real problem or emergency and all criteria indicate that the patient will not pay you, it is okay to render treatment. Just consider the treatment a gift. Rather than being upset about not getting paid, you have the satisfaction of performing a good deed. There have been numerous occasions in my practice where I rendered treatment never expecting to receive payment. (I never send a patient away from my practice without treating his or her pain.) I instruct the staff to give the patient or parent a bill for rendered services but not to follow up on collecting the fee if it remains unpaid. In a handful of instances, months or even years later I receive monetary payment with a note thanking me for my patience. In most cases I receive thanks and nothing more than the knowledge I have provided comfort to another person. Action Steps
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