In the current practice environment of sliding reimbursement and rising overhead, remaining viable often depends on an effective and affordable debt collection system. Below are tips to help establish and maximize an internal debt collection system.

Establish a Collection Policy
Establish a written office policy as a preventative step. Key considerations include the following:

• What is the current management's attitude toward collecting outstanding accounts?
• Who is authorized to negotiate with outstanding accounts and/or make exceptions?
• What techniques (letters, calls) will you utilize?
• How will you enforce the policy (charge a penalty, hire an agency)?

Select Appropriate Personnel
Many practice management staff face difficulties with these tasks because their personality doesn't match the position. Effective contact personnel have a sense of right and wrong and work well under minimal supervision.

Comply with Laws Governing Collection
Federal and state laws govern debt collection, and responsible staff should understand them. Most importantly, the practice management staff should always be truthful to the outstanding account.

Persuasion Collects Debts
Staff should never threaten to ruin credit ratings or file lawsuits. Instead, they should demonstrate how payment will protect one's credit standing and keep attorneys/collection agencies out of the picture.

Effective Follow-up Needed
Collection letters reach two-income families, single heads of household, people with no phone -- in short, all kinds of people. The best letters are short and request payment in full. Wording, timing and frequency also impact effectiveness.

When invoices and letters to outstanding accounts go unanswered, try the telephone. Keep the following in mind to maximize your call:

• Know the facts (amounts, dates, services).
• Identify yourself, ask for payment and wait for a response. Always avoid arguing. Instead offer solutions.
• State your next step, such as referral to an agency, and grant them a period of time (e.g., 10 days to pay) in order to prevent such measures.

- Steve Phelan

For more advice on improving your internal collection system or outsourcing accounts, turn to I.C. System, the company selected by Massachusetts Medical Society to help members. Visit www.icsystem.com or call (800) 279-3511 and tell them you are a Massachusetts Medical Society member.