Get the Payment Plan out of your head and into the Computer

You might say you don’t take payment plans in the office and your financial office policy states that the patient portion is due at the time of service … but the reality is you extend payments a lot more than you think you do. Look, I am not opposed of extending a payment agreement if it is appropriate for the situation and you have a systematic way of managing it. What I am opposed of is hiding behind this curtain of, “We don’t do payment plans.” When you do, you have accounts receivable that is over 60 days past due and your patients are dictating the terms.

If you are going to enter into a payment agreement with a family who has a past due account, all I ask is that you make up the terms and hold the patient accountable. Because here is what I see happening … and correct me if I am wrong. As I am going through the accounts receivable report with the financial coordinator, all the stories start to come out.

  • “Oh, they are making $50 per week payments because the insurance company did not pay for mom’s crown and we didn’t know she just had it done two years ago.”
  • “The dad lost his job and the doctor said it is okay for them to pay $100 per month until the balance is paid off.”
  • “They are making payments.” “They are making payments.” “They are making payments.”

When I ask the financial coordinator where the written agreement is for these payment plans, her reply is, “Oh, I just know what accounts are making payments.” There is no formal agreement and the patient has set the terms. If a patient sends in a partial payment, let’s say $50 on a $500 balance, and you accept this payment, then they send $50 again and you accept it, you have now entered into a payment agreement with your patient. Your patient has dictated the terms.

Like I said above, I am not against payment plans in certain situations. What I ask of you is to create an agreement with your patient that fits your terms and you are able to manage it. Keeping those details in that pretty little head of yours is not managing it. When you keep all those details in your head, it puts a huge responsibility on you to retain all that information and it doesn’t give you the freedom to delegate tasks or maybe take a vacation. I know, I have been there. However, when you get all those details into your software, it is easier to manage, plus your doctor has access to the information even when you are not there in person.

Here is what I recommend . . .

  • First, if your patient sends you a partial payment for a large balance, I would hold the check and call the patient. Do not deposit it until you have an agreement. If you deposit a partial payment, you have allowed the patient to set the terms and you also still do not have anything to hold the patient accountable for the full balance.
  • After you have a verbal agreement with the patient, enter all those details into your software so you can manage the payment plan effectively. If you are a Dentrix user, then use the Payment Agreement section to add the terms of the payments, print a copy for the patient and send it. Now the payment agreement will be trackable from the Payment Agreement Report or the Collection Manager where you can manage it, make notes and follow up with the patient instead of always making mental notes and tracking it by the seat of your pants.
  • Finally, I would recommend getting a credit card on file instead of having the patient mail in checks. When you call and talk to the patient about their balance and you are making the agreement, this is when I would ask for a card for the payments or have the patient come into the office so you can swipe the card. Make sure you have a secure way to store that credit card information so you are not vulnerable to a breach.

When you get the information out of your head and into the computer, you will have a more manageable way of tracking your patient payments and it will relieve some of the stress of your past due accounts receivable. Managing accounts receivable is part of running a small business.