Time is not on your side!
This simple concept is at the heart of debt recovery. Many business tend to overlook the fact that debts are not truly worth their face value. One tends to think of each customer's entire account balance as a pending receivable, but in reality, some percentage of your billings will never be collected. If that number is 5%, then a bill of $100 is really only worth $95. This is because for every paid-in-full invoice one must also partly cover the others that will never be paid. There is a point of diminishing returns, a point where you must consider: -Do I continue throwing good money after bad, or do I look at my other alternatives?-
Why are older debts worth less?
Each customer only has so much money available to pay bills, especially customers in financial difficulty. Available funds go to the most current and most urgent demands, with old bills going to the bottom of the stack. Human nature tends to cause most people to rationalize past-due debts as not really being as urgent, particularly when an old bill has not been followed up with pressure to pay from the institution owed. (Ignoring the outstanding debt didn't yet create a problem, so why would delaying one more month matter?) Besides, by letting this bill get old, you the medical institution are conveying a message that you don't consider the debt to be important.
An old bill is for goods or services that were delivered long ago. The value has already been received and consumed. The customer is more motivated to pay bills that still feel "real" to them, something being bought and paid for today. Past-due bills are embarrassing. People naturally want to avoid confrontation and disappointment. It often seems easier to procrastinate than to face up to an awkward financial discussion. Worse, since it is more comfortable to buy from a competitor without any embarrassment or debt baggage, your customer is likely to go elsewhere. So, not only does inaction risk even further delays in payment, you are also faced with the outright loss of your customer.
The bottom line.
The longer you wait to get paid, the less likely you will recover anything, and the more money you will waste on collection efforts. It's a continuing spiral.
Don't let time pass you by. Contact us now for a no-obligation consultation.
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With ARPC, the client pays your practice directly, thereby speeding up your cash flow. Submitted payments can be seen online by your financial department 24 hours a day, seven days a week, 365 days a year. A traditional collection company will often take up to two months to report a transaction; with ARPC, you have immediate direct access to payment records, so you always know where you stand.
Keep in mind, traditional collection companies often charge the debtor extra fees and interest, yet most do not share any of those fees with the you. The agencies rarely negotiate the additional fees with the debtor and are under no obligation to inform your practice of the amount added to the total.
ARPC gives you total control on how much to add for delinquent charges, and the discretion to waive the fee as well. Your practice keeps the fee, which can be accounted by your bookkeeping department to lower the total collection cost. This method gives your practice leverage to better negotiate with the delinquent patient, leading to a higher percentage of successful payment resolutions.