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August 10, 2011 3:41 PM   Subscribe

They don't pay. I need the money. What are my alternatives?

I work at a small private clinic. We are running into a few families that simply don't pay their bills. We're very liberal with repayment if the family makes an effort to at least pay parts of it each month. Recently, we've encountered more and more of these families who just don't pay. Some families are months and years delinquent. We're looking into our options: small claims court, lawyer, and collections. Do you know of any alternatives? Also, which is the best course of action that minimizes fees and extra time? And, is there anything we can put in place to prevent this from happening?
posted by jadegenie to Work & Money (30 answers total) 1 user marked this as a favorite
 
What is the service you provide? Do you have an ongoing relationship with the people who owe you money?
posted by ManInSuit at 3:43 PM on August 10, 2011


Withhold further treatment until a payment plan is worked out with the payment officer.
posted by Blazecock Pileon at 3:43 PM on August 10, 2011 [1 favorite]


If people are years delinquent, you may not be able to sue anymore, depending on the statute of limitations in your juridiction. So be careful not to wait too long.
posted by Dasein at 3:46 PM on August 10, 2011 [1 favorite]


I'm not an expert in this, but I think your course of action is going to be somewhat determined by just how much money is owed. $100 vs $5000 might require different methods. Personally, I'd get a lawyer because that person could advise you where to go from there - whether that's representing you in court or hiring collection services. But above all, stop providing services for anyone who's delinquent and/or require upfront payment.
posted by blaneyphoto at 3:49 PM on August 10, 2011 [1 favorite]


Response by poster: @ManInSuit: I'm a speech-language pathologist. We've halted services for the families in question, but the kids need speech. Maybe not from me, but they need it at some point.
posted by jadegenie at 3:49 PM on August 10, 2011


Require payment up front? I'm not sure if that is considered ethical in your field, but that is the only sure way I can think of to definitively prevent this in future.
posted by aiglet at 3:52 PM on August 10, 2011 [3 favorites]


For starters, STOP TREATING THEM. Or at the very least, implement a cash-up-front policy with them.

Second, refer them to collections. You'll probably get about half of what they owe in total.

If they actually bounce checks, they've actually committed a crime and you can press charges.

That about covers it.


We've halted services for the families in question, but the kids need speech. Maybe not from me, but they need it at some point.

If they clearly won't pay, then decide how much charity work you want to do - And talk to your accountant about that first - We mere humans can't claim "in-kind" expenses on our taxes, but perhaps as a business you can at least claim something for it.
posted by pla at 3:54 PM on August 10, 2011 [1 favorite]


As others suggest - it sure seems like the most obvious solution, at least going forward, is to require payment up front, and/or to cut off people who do not pay.

Is there any reason you can't do this?
posted by ManInSuit at 4:00 PM on August 10, 2011 [1 favorite]


We've halted services for the families in question, but the kids need speech

Ok, so is the question "How do I collect from people who didn't pay and have been cut off?" or "What are my options to help people who need this service but can't afford it?"

At any rate, if people agree to pay, they need to pay. If you want to help people who can't afford your service, you probably need to formalize the process: set up an application for "hardship" candidates where they prove they can't afford it, offer them reduced or free services, and set a cap on how many of these customers you can accept and stay in business.
posted by drjimmy11 at 4:07 PM on August 10, 2011 [3 favorites]


> the kids need speech. Maybe not from me, but they need it at some point.

You have to decide how you feel about this. If there are people who need speech therapy, but their families cannot or will not pay, how are you going to respond to that fact?

You probably can't just provide speech therapy to everyone who needs it, regardless of whether they are able/willing to pay. You probably can't offer ongoing therapy to people who continually fail to pay their bills.

You might decide for yourself that it's okay to do some "volunteer" work for which you are not paid. If so - it might help to decide how much of that you want to do per month or per year....

Small claims court, lawyers, and collections may help. But a better long term solution is one where you don't have to resort to small claims court, lawyers, and collections.
posted by ManInSuit at 4:07 PM on August 10, 2011 [1 favorite]


Probably your best bet for actually collecting the money is referring accounts to a collection agency that specializes in medical debts. You should understand that the amount that's actually collectible is probably going to be quite low - the population of people who can't pay their medical bills can often basically be judgement-proof in a collection action, because they're really poor. Talk to a few different agencies, make sure you understand their business models and rates (and whether they'll be buying the accounts from you at a flat discount to the balance, or working on contingency for a portion of what they collect), and make sure you understand at exactly what point you're going to refer an account to collections and be consistent in following that.

Another avenue to go down besides tightening up point-of-service collections might be helping your patients get on Medicaid. Lots of people that are eligible for Medicaid don't know and don't apply, and if your patient population is children some of your poorer uninsured families are quite likely to fall into that bucket. If there's anybody in your billing office that understands Medicaid eligibility rules really well, starting having them provide your patients with counseling on how to complete an application can be a win/win; you're more likely to get paid (admittedly at Medicaid rates, which suck, but are better than a bad debt) and they get Medicaid.
posted by strangely stunted trees at 4:11 PM on August 10, 2011 [1 favorite]


Response by poster: We probably can't require payment upfront. We bill insurance at the end of the month for each visit. Parents don't always bring their children to the clinic (sometimes it's a babysitter). We have an idea of who we're seeing in the month, but if the child gets sick or is away on vacation, we can't bill them. As far as halting services, we've done that. (Probably not soon enough because afterall, these are children that need help).

The funny thing is - most of the families that aren't paying can pay. They're employed in financial firms or consulting firms, some have their own businesses. We've been very lenient with those who can't pay by giving them a prorated rate. But yes, I would like ideas to prevent non-paying families. And yes, I'm asking about delinquent payments from families that no longer receive services.
posted by jadegenie at 4:11 PM on August 10, 2011


Best answer: 1. Stop billing insurance. Parents must bill insurance on their own.
2. Require everyone to pay upfront. They must give you cash in hand at the start of the appointment. They are capable of giving the babysitter a check. How do those kids get piano lessons or Baby Gymboree or karate class or whatever? I guarantee you Tumblin' Tots Baby Gym isn't billing insurance at the end of the month. CASH IS KING.
3. Write off the people who didn't pay you before, because they probably won't pay you now. If you want, you can send them to collections.

If you feel bad about this, remember that by paying their bills, these families allow you to help the children who really CAN'T afford to access your services. If you feel woozy, I want you to remember the mother who took two buses to get her child to your clinic, and two buses to get home, and is paying you $10 per session, the only crumpled, wrinkled $10 bill in her wallet. If the free-riders don't pay you the $100 per session that they owe you, eventually you will have to turn her away. Think about her and her child every time you enforce your new rules.
posted by Snarl Furillo at 4:22 PM on August 10, 2011 [13 favorites]


Best answer: You could require an estimated co-payment in advance, either by the visit or by the month. Probably one of the few remaining uses of these quaint old things called "checks" - if someone is entrusted with a child, they can be entrusted with a check, which they can bring you.

Get a medical bill collection agency. You want a local one that's ethical about how and when they call and what they put on people's bureau reports, but unfortunately this is the only kind of pressure some upper income (or living above their means) people understand.

Nthing - set up a pro-bono care policy that is restricted to a certain percentage of your practice, and treat those deserving people only. The rest are cash customers who don't get treated unless they pay. People don't die from speech defects.
posted by randomkeystrike at 4:22 PM on August 10, 2011 [1 favorite]


Send the bills to a collection agency. They'll go about getting what they can in exchange for a percentage of the take. This will take a while, and it's by no means guaranteed to work, but it's the easiest and most efficient way for you to get paid. It's why these companies exist. If a lawsuit needs to be filed, they'll do it on their own dime. A lot of them are actually law firms for that very reason.

In the future make parents deal with insurance on their own. You demand cash on the barrel. Patients can get reimbursed if they feel like it. But you get paid either way.
posted by valkyryn at 4:24 PM on August 10, 2011


There are two big problems with the advice to stop billing insurance: if you're a participating provider with an HMO or PPO, your contract probably forbids doing this to their patients, and even if you're allowed to, it will lose you a ton of paying patients.
posted by strangely stunted trees at 4:26 PM on August 10, 2011 [1 favorite]


Best answer: An accountant friend once gave me some advice that I found invaluable while working as a bookkeeper. This isn't much help with your ages-old delinquent accounts now, but might help you in the future.

Someone misses their payment date? Ring them the next day. Sympathise, "yes, times are hard, I understand, but we really need to pay our bills too. When can we expect payment or part-payment?" Pin them down to a date. If they don't pay on that day, ring them again. Sympathise, "yes, times are hard, I understand, when can we expect payment or part-payment?". Repeat as required, daily if necessary.

If they absolutely refuse to negotiate a payment date, ring them every day. Every single day. I've found it's even worthwhile calling them from a different phone number, if they record the office number in caller ID and simply don't answer the phone.

My accountant friend swears those who can pay, will pay, you just to get you off their back, and in my experience, that's true.

And this is why I love my new job, where the invoice must be paid before services are provided. Debt collecting sucks.
posted by malibustacey9999 at 4:29 PM on August 10, 2011 [8 favorites]


Before you go all out on collections and lawyers, you could try a cheap fix that we've used where I work--just write a note on their statements to the effect of, "X is our attorney and we will turn this matter over to him/her if this bill is not paid by this date." Sometimes that's enough to get people moving on it. It has worked for us (it probably helped in one case that the deadbeat was a buddy of our lawyer).
posted by WorkingMyWayHome at 4:31 PM on August 10, 2011


When we needed to visit a doctor on vacation far from home, he required payment in full up front, then sent us a refund check once our insurance paid up. I assume the collection issues are patients without insurance? Because if they are a PPO / HMO patient wouldn't you collect the co-pay up front, and they won't owe you anything later anyway.
posted by COD at 4:32 PM on August 10, 2011


For continuing clients, the babysitter can bring a check or cash - I agree that if the babysitter can be trusted with a child, then money should be no worry. The parent can call ahead with a credit card number. The parent can mail a check ahead of the appointment. Try to get a way to do EBT on checks, makes it harder to stop payment or NSF them.

The babysitter is getting paid. You should be too. If the kid and babysitter show up with no prepayment, then the kid goes home.

Have this in your new patient intake forms. Make sure they sign a document acknowledging that no payment in advance equals no treatment. Be able to direct them to their own copy of that document.

As far as getting the money that is in arrears, a collection agency is probably your best bet.

To deal with insurance issues, you need a system that bills insurance for each visit, rather than once a month. This will also help you catch the families who have changed insurances without changing paperwork.

Finally, a good mantra for medical offices is: people pay for the things they want, not the things they need. The woman who is bringing her kid on two busses and using her last ten dollar bill to pay for the kid's speech? She values your services. The parents driving a Lexus and replacing their kid's broken PS3 or whatever every 30 seconds, but not paying? Let them wander off, because they are going to stress you out six ways to Sunday, beyond the non-payment. Yes, it's unfortunate for the kids. But you can't save everybody. Send them to collections.
posted by bilabial at 4:36 PM on August 10, 2011


For the defaulting families, you really need to change your billing practices & require pre-payment at check-in for each and every visit; even further, require that pre-payment in cash or a cashier's check, not a reversable credit card charge or a check where they can stop payment. Doesn't matter who brings the kids into the office either: if it's not one of the parents, then they can hand the babysitter an envelope of cash to bring in when when they bring the kids. (If they can trust the babysitter with their kid, then they can trust the babysitter with a cash payment, right?!?)

I understand your pain about halting therapy for the defaulting families --- after all, it's not the kids' fault their parents are deadbeats, plus you probably got into speech therapy in the first place because you want to help people. But maybe it'll help to think of it this way: refusing service to non-paying families frees up your time to provide that same needed assistance to PAYING families, which will be good for both you AND those paying families.
posted by easily confused at 4:39 PM on August 10, 2011


In general, I would encourage you to not make assumptions about people's finances from external trappings. There are plenty of people these days who have good jobs, nice cars and are now so fucked by their mortgage interest rate they can't buy groceries (and can't get out of the car lease they're now in arrears on, either.)

My approach to this is that bills are bills but people are people. I agree with the people suggesting personal chasing. Get paid at time of service whenever possible, call the Monday after a missed payment, attach a personal post it note to the next bill. I'd rather pay off my nice vet to whom I owe €100 than the impersonal electric company.

(Vet is #3 on my guilt list. It'll be another two weeks, but wouldn't you rather know that?)
posted by DarlingBri at 4:45 PM on August 10, 2011 [1 favorite]


Best answer: I've taken my kid to speech therapy for 4 years. He's been to several private clinics in a few different cities, and every single one required payment up front. They provide a form I can file on my own with my insurance company.

I applaud your instincts to help the children and your efforts not to penalize them for their parents' failure to pay. But you'll be out of business soon if you keep operating this way. And then you won't be helping anyone.
posted by Kangaroo at 5:07 PM on August 10, 2011 [1 favorite]


Response by poster: Thanks for all the advice! I'll definitely look into paying up front. I'll also be looking into my duties as a provider in the health care plan. If I don't need to bill insurance, then I won't. The copay idea is also a grand idea.
posted by jadegenie at 5:40 PM on August 10, 2011


This sometimes works: Jan owes the clinic $500. You write to her and say that the balance can be regarded as paid in full if she sends $350 in 30 days. (You of course include all of the statements that the law requires in your letter because you prudently sought legal advice before sending it.)
posted by megatherium at 5:57 PM on August 10, 2011


(And you will also run malibustacey9999's ideas past your lawyer as well, because many of the suggestions made by m'9 have violations written all over them)
posted by megatherium at 7:26 PM on August 10, 2011


I work with low-income people who need my legal services. Making them pay up front is the way to go. Many of my clients are so financially strapped that they want ME to be the "bill that doesn't have to get paid." The bill that doesn't have to get paid, almost always becomes the bill that DOESN'T get paid. They're strapped every month. Many of my clients only respond to cutting services off. Back when I was new and naive to the business, I would be outraged when people's excuse for not paying me was "I had to pay my light bill! It was about to get cut off! I had to pay my rent, I was about to get evicted! I had to pay my cell phone bill ..." etc. etc. I quickly realized that my services had to become a service-that-will-get-cut-off, too.

I collect the money up front, now and try to arrange things so I can cut service off when they stop paying. And whatever I don't get up front, I really don't count on being able to collect.
posted by jayder at 7:46 PM on August 10, 2011 [1 favorite]


Best answer: Do you accept credit/debit cards? Over the phone? Because whenever I've been late on a doctor's bill — not because I can't or don't want to pay, but because I'm frankly just terrible about dealing with mail sometimes, and usually don't know where my checkbook is — and I've gotten a call, they're always very happy to take my credit card info on the phone and call it done. None of this "when can we expect partial/full payment?" business, that invites you to go home and not have a stamp and forget about writing that check again; just a straight-forward "if you can give me a credit card number I can resolve this right now." And hey, another chronic procrastinator has accomplished a task without even trying to.Win-win.

Sometimes it's not that people are avoiding paying you, but that the way you're requiring payment presents a barrier to them. So... get a Square, set up a PayPal account, figure out if there's any way to make it easier for folks to send you payment directly from their bank... just don't take any more wooden nickels.
posted by mumkin at 8:35 PM on August 10, 2011


You need to have a standardized system in place. Payment immediately at the end of services rendered. This stops this altogether.

I guess how far you go with the currently non-paying parents is really dependent on how much money you're owed, but, honestly, you're running a business and not a charity - the minute someone doesn't pay, you don't deliver any more services. If you're able to continue without recouping lost money, I wouldn't pursue it - you'll waste time and your own money by going down that track.

Yes, it hurts the child, but your responsibility is to the running of your business - the parents are the ones who have a responsibility to ensure their bills are paid so that their children get the appropriate services. If they don't pay, you don't treat their children.
posted by mleigh at 1:15 AM on August 11, 2011


(And you will also run malibustacey9999's ideas past your lawyer as well, because many of the suggestions made by m'9 have violations written all over them)

posted by megatherium


Fair call. The actions I've described are legal here in Australia... the US's medical, insurance and debt-collecting systems may well be a whole different kettle of fish.

I guess the point I was trying to make is that gentle, caring insistence works better than lawyering up and calling in the big guns. In my experience with debt collecting, you do catch more flies with honey than with vinegar.
posted by malibustacey9999 at 3:07 AM on August 11, 2011


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