Billing companies, collections and alternatives!

I sometimes find it shocking when consulting physicians or office managers about how they handle their clinic's receivables. I look at the fact that the Dr spent hundreds of thousands of dollars on their education, then hundreds of thousands, if not millions of dollars to open their practice and then go on to entrust their receivables to somebody else without full accountability. How many physicians are pro-active when it comes to providing solutions to their receivable issues?

The picture I most often see is an office manager and/or an internal biller running the day to day operations of a practice. If the practice's receivables get out of control, the delinquent patient balances or losses are looked upon as a cost of doing business. Well, they're right to a degree, as not all dollars will be recovered, but I have personally witnessed over $300,000 dollars on an aging sheet with $3,900 dollars recovered. Appalling! To make matters worse, they're adding $25,000 to $30,000 dollars to that amount monthly.

Then, there are also many practices that entrust their receivables to the expertise of a billing company that charges an average of 6% or more per recovered dollar. This percentage can vary depending on the services provided. Just to shed light on billing companies, regardless if a practice or billing company submits an invoice to a patient for services rendered, both will recover 95 to 98% of the time. This is the national average.

Lets look at an example of turning an account over to collections. A practice or billing company works a patient balance for 120+ days and decides to turn it over to a percentage agency. The chance of collecting the patient account is greatly diminished the longer a debt ages. Regardless of the recovery rate, the national average charged is 33% per recovered dollar by a percentage agency. This is business as usual for most practices, as they aren't exposed to alternatives, or shy away from them, as change can sometimes seem too good to be true or too overwhelming.

Imagine a 3rd party service that a practice controls. One where the office manager or billing department could choose from 5 initial points of contact, with 4 more demands to follow, all of which can be sent out on a 10 or 14 day cycle. Imagine having money sent right to the practice instead of being held for 60 days in a collection agencies escrow account. Imagine being able to accept partial payments, suspend account for 50 days while payment arrangements were made by the patient and send a thank you letter to those patients that have paid. And lastly, imagine being able to track every stage of the collection effort, with the ability to fully control the third party. If somebody told you that you could do all of this for your practice and only pay an average of $10 dollars or less per account to diplomatically collect slow-pay, past due and delinquent patient or insurance accounts, would you be interested in knowing more?

Transworld Systems Incorporated (TSI) has been operating for over 39 years as a diplomatic flat fee collection service. With a fee structure averaging $10 dollars or less per account, practices use us early in their A/R to reduce their internal costs of invoicing and following up on a past due account with a recovery rate averaging at an industry high 56%. Email me at steve.transworld@gmail.com if you are interested in a A/R solution.