Sandy Pardue, Consultant/Classic Practice Resources
Sandy Pardue, Consultant/Classic Practice Resources
Management and Organizational solutions for dental practices.
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Sandy Pardue
Sandy Pardue

Consultant Tip: Use a "Rebilling Charge" to Motivate Slow Payers to Pay Faster

Consultant Tip: Use a "Rebilling Charge" to Motivate Slow Payers to Pay Faster

8/20/2014 1:00:00 PM   |   Comments: 1   |   Views: 5830
There is no question that adding a monthly rebilling charge to account balances will motivate patients to pay their bill faster. We all try to collect fees and co-pays but still manage to have patients owing money to the practice, especially since insurance companies don't always pay what is expected. If there is no penalty (so to speak) for not paying on time, the patients can stall as much as their conscience will allow. One cannot go to a restaurant, have a fine meal and pay at their leisure months later. A football team cannot go to the line of scrimmage and wait forever to run a play without a penalty.  That coach and team both know that if time runs out and the whistle blows, there will be a penalty. One cannot owe the bank, loan company, I.R.S. or anyone else money and not pay some premium for the use of their money. 

This is one of the most effective things we have done in practices to motivate honest, but slow paying patients. There is no doubt that overhead costs are rising out of proportion to our income. The cost of rebilling is anywhere from $5 to 5 percent of the accounts receivable balance. Try it and I think you will like it.

Review the Truth-in-Lending Law with your local credit bureau and/or attorney. Basically, the law says that a person must be informed in writing of any finance charge. This rebilling fee is not a finance charge. We recommend that you place a message on your financial forms informing patients how and when a rebilling fee is charged. 

A rebilling charge can work to your advantage with patients who object to it and those who do not. For example, some patients will exclude the rebilling fee in their payment. It is perfectly acceptable to write it off. It's not worth the time, effort or expense to try and collect it from the patient when they are paying off their account. This is also a perfect way to create good public relations. Just for the record, waiving rebilling charges in the the examples below, does not violate the Federal Truth-in-Lending Act.

1. A patient calls and says, "I was out of town for four or five weeks due to an illness in the family," or "I was in Europe for a month and that is why I didn't send the check." Recommended reply, "Oh! That's okay, we'll just deduct the rebilling charge of $_________. Send in your check for the remainder and I'll just take it off your bill."

2. "That's no problem Mr. Brown, we all know who you are, that you have been a patient here a long time and you  are not one of those people who tries to get out of paying, so just deduct the $__________ billing charge and I'll make sure it is taken off your account."

A rebilling charge is added to all past due accounts. It will get the account paid a lot faster. 
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