The cash-flow of any business is directly linked to the debtor’s book. This book contains money outstanding from sales already made. In the optometric industry, a considerable percentage of this amount is owed to us by medical aids. However, it is the patient that remains responsible for any money owed to the practice.
Why is it that, after we have given the best professional service, provided the best eyewear with the best possible customer service, that we still fear the moment when we need to ask for money? We often have difficulty in collecting money from patients once they have collected their spectacles and there is a short-payment from their medical aid. If we emphasise the payment options when talking to a patient every time we have contact with them, there is no reason why we should have any difficulty collecting money.
By following 10 easy steps, money matters will only be the next step – and nothing to fear!
Making an Appointment
When a patient makes an appointment, mention your payment policy. Do not offer the medical aid option upfront. Tell them that you give a 5% / 10% discount for upfront settlement. Should they choose to use their medical aid as payment, inform them about their medical aid’s contribution towards their eyewear. Never use the words “medical aid benefit” as it creates a wrong impression in the mind of the patient. Ensure that they know that the medical aid merely contributes to their eyewear. On request, give them all the detail regarding medical aid exclusions and the price of a visual examination. Also, advise them on the procedure for non-medical aid patients – i.e., 50% deposit on order and the balance payable on collection. Remember – the more they know before they visit your practice, the more pleasurable the visit is going to be.
Confirming the Appointment
When telephonically confirming the appointment of patients using medical aid as payment, inform them about the medical aid exclusions and conditions again. By now you should have done the medical aid confirmation of the patient and had the patient benefits at hand.
“Mrs. Jones, this is Karen calling from Foureyes Optometrist to confirm your appointment with Mrs. Ross tomorrow afternoon at 4 o’clock. I see that you are a member of Discovery medical aid and we are contracted to them, which means they will pay your account with us up to the value of your optical benefits. The balance, if any, will be payable by you on collection.”
One can only use 160 characters to send an SMS. When using this method as a reminder system for patients making use of medical aid, it might be difficult to fit in all the information on the wish list. Try this message:
“Dear Mrs. Jones, this is a friendly reminder about your appointment at Foureyes Optometrist on 28 November 2005 at 14:20. Please ensure to bring your M/A card. See you soon!”
Or in Afrikaans:
“Hierdie is ‘n vriendelike herinnering aan u afspraak by Foureyes Oogkundiges op 28 November om 14:20. Bring asseblief u Med Fonds lidkaart saam. Sien u binnekort!”
The SMS message for non-medical aid patients may be something like this:
“Dear Mrs. Jones, this is a friendly reminder about your appointment at Foureyes Optometrist on 28 November 2005 at 14:20. Please bring all your existing eyewear along. See you soon!”
Completing the Patient Information Sheet
When taking down patient detail, confirm how the account will be dealt with. “Mrs. Jones, I see from your information sheet you have indicated that you are going to use Discovery medical aid for payment. We are contracted to them which means……” Please explain in detail how the process works and what will be expected of them. If there are any levies due, request payment. Remember to make copies of all medical aid cards.
When dealing with existing patients, always check that there are no overdue amounts on the account. Your computer software should flag the account if this is true, but computers only tell us what we tell them. If the credit controller has not flagged the account, it will not warn us. Make a habit of always checking first.
Many optometrists prefer not to discuss money matters with their patients. During a casual discussion between the patient and the optometrist, he/she should mention the advantages of paying upfront and then claiming from his/her medical aid. Optometrists should keep a shortened version of the current price list in their office. They cannot try to convince a patient to pay cash up front if they cannot indicate the possible cost involved.
Optometrists should know ALL the available payment options. Should the patient insist on using the medical aid, the optometrist must explain the conditions of the patient’s medical aid. Due to all the changes and the complexity of dealing with various medical aids, most optometrists have lost the confidence to discuss payment options and leave it to their employees.
It is advisable that an Optometrist should at least have a guide in his/her office summarising the most used medical aids in the practice to enable them to answer the most basic questions from patients. This can be followed up by: “Mr. Jones, Karen is going to assist you with your frame selection. She deals with the medical aids on a daily basis and will be able to answer all of these questions in detail. She is also going to prepare a quotation for you which means that you will have all the information you may need before making a decision today.”
Sales process / Frame stylist / Dispenser
When busy with the sale, the patient should be in control of the process that determines the price. This is a golden opportunity to ensure that the patient understands all the advantages of upfront payment or the conditions of his/her medical aid. By now all the information from the medical aid is available on the patient file, and dispensers can discuss the medical aid’s contribution towards their spectacles. The fact that the patient contribution is payable “today” to enable us to place the order for the eyewear must also be mentioned during the sales process.
(Remember always to offer an alternative!)
Back at Frontline (Quoting and Invoicing)
The frontliner (or the dispenser) does a quote for the patient, discusses it with him/her and once agreed, gets the patient to sign the quotation. No order should ever be placed before this signature from the patient.
An invoice is now created. By asking: “How will you be paying Mrs. Jones? Cash or Credit Card?” we receive the patient contribution or the 50% deposit while explaining to the patient what the rest of the procedure will be. “Your spectacles should be ready in 5 working days, Mrs. Jones. We will call you as soon as it arrives. On collection, the balance of R2 350.00 will be payable by you. Should there be a shortfall in your medical aid payment, we will let you know…”
(Never ask: “Are you going to pay now, Mrs. Jones” or “When are you going to pay, Mrs. Jones?”)
If the patient requests to pay their portion in two or three installments and your practice payment policy includes this as an option, be sure to complete the necessary documentation before the patient leaves the practice.
Phoning to say that spectacles are ready
When informing the patient that his/her eyewear is ready for collection, confirm once more how much the patient portion is or that the balance of the account is “payable on collection.”
“Mr. Jones, this is Karen calling from Foureyes Optometrists. Your spectacles are ready for collection and the lenses we ordered for you came out nice and thin! The amount payable on collection is R2 350.00.”
There is a difference in opinion amongst optometrist whether first to take the payment and then dispense the spectacles or dispense first and then take the payment. What is the difference?
If we take the payment and then dispense the spectacles, there will never be that awkward moment when you ask for payment, and the patient has “left his purse at home by mistake.” We should then ask them to return the spectacles until it is paid. This is a sure way to embarrass a patient!
Handle the situation as follows: “Good morning Mr. Jones. Nice to see you again! Here are your glasses. Look how nice and thin the lenses came out. Let’s first take care of the payment and then a dispenser will fit your glasses. Your medical aid indicated that the would contribute R2 400.00 towards your eyewear. All you need to pay is R2 350.00. Should there be a shortfall in their payment, we will contact you. Will that be cash or credit card?”
If we ask for payment up front and the patient remembers that his/her purse was left at home by mistake, we can still rescue the moment by saying: “That’s no problem, Mr. Jones. What we’ll do is fit your spectacles and ensure that everything is perfect and then you can send somebody else tomorrow to collect it. This will save you the trouble of making another trip.” (Or offer to deliver it once it is paid.)
Another option is to offer the patient the use of your internet service on an office computer to make an electronic payment.
National Credit Act requirements:
It is becoming more and more difficult to trust people with when it comes to promises for payment. We do everything in our power to deliver excellent service and to fulfill the patient’s eyewear needs. We expect them to want to pay us after receiving such excellent treatment. The reality is different. Some patients need more than a kind request before they settle that portion that the medical aid paid short or that second payment they promised to make!
Optometric practices are not registered credit providers and for that reason are not protected against bad debt. If, however, we follow the instructions from the National Credit Act, we have a leg to stand on when it comes to collecting bad debt.
The following insert summarises some of the requirement of the National Credit Act. Ensure that this appears on the patient information sheet and most of all ensure that the person responsible for the account has signed on the designated line.
Submitting your claim
Medical aids do not always confirm the correct contributions when we call them. Often, we find a shortfall in their payment. Because we have the National Credit Act requirements in place, our patients have already signed the legal notice on the patient information sheet where they take full responsibility for any short payment received from the medical aid, and they know that they are liable for any shortfalls. It is our duty to inform them of this short payment as soon as we receive the remittance advice from the medical aid.
It is vital that patient communication is done effectively during this stage. If you say you are going to follow up, DO IT! Use the diary and be consistent.
Different practices have different ways of submitting their invoices to medical aids. Many medical aids use Healthbridge; others use Optimum or EDI, while others need to be submitted manually. Whichever way you use; one thing is of utmost importance: Keep proof of your submission! Should a medical aid refuse to pay an invoice due to a service date that falls outside of their cut-off date, this proof will make the difference in them paying or not.
We all make mistakes, and whether we like to admit it or not, there will come a time when an invoice slips through the system and never gets submitted to the medical aid. There are numerous time-consuming ways to ensure that this does not happen. The most familiar way is to work from the daily report, go through each generated invoice and check if it was submitted or not. This is easy if you see six patients a day and have only one optometrist. However, a practice with 3 or more optometrists all fully booked every day, poses a completely different scenario. You will need three full-time credit controllers to keep this function up to date. Add to that the reconciling of credit balance accounts, and there will be no time left to do what you have to do – collect outstanding money!
Ed: In the next edition, Daleen will discuss the Reasons for having Debtors and how to deal with it
REASONS FOR HAVING DEBTORS
- Short-payment by Medical Aid.
- Medical aid discount not allocated.
- Patient portion not paid on collection.
- Stale claims.
- Private patients allowed leaving without full payment.
- Patient cheque returned from the bank unpaid.
- Finger and Accounting errors.
- Incorrect patient information.
- Electronic payments not managed.
- Short payment by Medical Aid
This is a significant contributor towards outstanding debtors in practice. If we did not do proper medical aid payment confirmation, it would result in either over- or underpayment. If this happens, phone the patient immediately! Do not procrastinate!
“Good morning Mrs. Jones. This is Jane, and I am calling from Foureyes Optometrists. I have just received a payment from your medical aid, and although they confirmed their contribution to be R2 400.00, they only paid R1 650.00 today. This means that there is an amount of R750.00 outstanding on the account and it is payable by you… I have printed a statement, and I will send it to you today along with the reason why the medical aid (shortfall letter) did not pay the amount in full. Please have a look at it, and I will call you again in 10 days to discuss payment. I am including our banking detail to allow you to make an electronic transfer if you prefer this payment method. Should you make use of this option, please include your account number as a reference…….”
As soon as you put the phone down, make a note on your computer system in the patient profile as well as in your debtors’ diary stating that the patient has been notified and a statement and shortfall letter have been sent on this day. Diarise the follow-up date.
Medical aid discount not allocated
Avoid embarrassment by ensuring that you allocate the discounts from the medical aid. If you do “batch posting” on your computer system, you will immediately see that your remittance advise does not balance with the batch posting. It probably stems from a discount not allocated.
The patient portion not paid on collection
This should never happen, but on occasion, a patient manages to convince you to trust him/her! It is often a well-known patient or a good friend (or even family) of the optometrist that manages to get away with this. Ensure to make notes on the master file regarding the promises.
Should the patient not make the payment according to the promise, ‘phone him to remind him of the promise and then put the collection process described below into action.
“Good morning Mrs. Jones, this is Jane calling from Foureyes Optometrists. When you collected your spectacles on the 15th, you promised to settle the account before the 30th of April. Today is the 2nd of May, and I would like to remind you of your promise…..”
Keep quiet now. Let them talk and make a note of the new arrangement on the master file and in your diary.
Suspend the account to ensure that no other goods will be sold before the account is settled in full.
What is a stale claim? Service providers are notified of a health plan’s outdated claim policy which requires providers to submit claims within a defined period from the date of service. A claim that is submitted past that time will be denied.
The only excuse for a stale claim is negligence on the part of either the practice or the company appointed to submit your claims to medical aids. How can we avoid a stale claim?
- Have a system in place to ensure that all invoices are paid in full, submitted to the medical aid or credited. (Invoice control sheet.)
- Watch your debtors aged analysis like a hawk. Any amount claimed from the medical aid still showing on 30 days must be followed up without delay. Keep proof of all communication with the medical aid.
- Respond to medical aid rejections due to incorrect codes used, incorrect prices used or insufficient detail supplied immediately. Make detailed notes of the date of the re-submission.
Private patient allowed to leave the practice without full payment
If the patient promised to make the payment “tonight” and you have not received the payment confirmation on email the next morning, ‘phone that patient immediately:
“Good morning Mrs. Jones, this is Jane calling from Foureyes Optometrists. When you collected your spectacles yesterday, you promised to make an electronic payment last night. I am worried that I have given you the incorrect email address as I have not received the payment confirmation yet.”
Keep quiet now. Let them talk and make a note of the new arrangement on the master file and in your diary.
Patient cheque returned from the bank – RD or Post Dated
Do we still need to discuss cheques? Are there still people using them? The answer is yes. Although it is a dying process, some patients are still using them and we have to have processes in place to deal with cheques returned from the banks unpaid.
Refer to drawer (RD):
- Immediately reverse the receipt with a journal debit.
- Debit the patient with an admin fee due to the penalty charged by the bank.
- Phone the patient and tell them about the unpaid cheque. The patient must either pay the amount (including the bank charges) into the bank account or bring cash in exchange for the cheque.
- Follow up; follow up; follow up!
- If the cheque was banked and returned to you as unpaid, ‘phone the patient, apologise for your negligence and ask them to please send another cheque.
- If the bank teller picked it up before it was deposited, delete it from the deposit, reverse the receipt, correct your daily banking sheet and re-deposit the cheque on the correct date.
- Ensure to check all dates on cheques before it is receipted and then again before doing your daily banking.
Finger and Accounting Errors
If you are using a thorough banking system, any receipting errors will be picked up. All over- and under banking MUST be recorded daily. Should a patient phone in to say that she has received a statement that shows she owes R1 000.00 but on the 15th of April has paid R1 112.00 of which only R112.00 reflects on her statement, your daily banking summary will show this amount as being over-banked, and the situation can easily be rectified. Your debtors’ book will suddenly show R1 000.00 less!
Sometimes receipts are put through on the wrong account. This account goes into credit while you are trying to collect money that has been paid already. Take caution when receipting, especially if you have patients with identical names. Use the date of birth and the medical aid number to determine the correct member.
Incorrect patient information
If we do not correctly allocate or update the patient information when the patient is in practice for the examination, it may happen that they never receive their mail and that we are unable to contact them on the phone to tell them about a short-payment by their medical aid. Their mail will be returned, or the ‘phone calls left unanswered and eventually we will have to write that money off.
Too much time is wasted in the optometric practice when credit controllers have to search any possible venue (like the appointment book where the original ‘phone number was recorded) for some form of contact detail.
Should we receive any “address unknown” mail, immediately remove the address from the master file to stop all correspondence from following the same route. ‘Phone the work numbers or cell numbers or any other contact numbers you may have to get the new address.
Electronic payments not managed
There are very few medical aids that still send cheques with a remittance advice. Most of them do electronic transfers directly into the bank account and send the remittance advice via email. This is a very effective process – if managed well!
If a remittance advice has been received but not receipted, the amount shows as outstanding, and it forms part of the collection process. A lot of time and money will be wasted in trying to collect money that has already been paid into your account!
1. Remittance advice from medical aids
- In your email program, create a folder for each medical aid. This will simplify referring to old remittances. File these emails by date to always show the latest remittance advice on top.
- Once the remittance advice is printed out, refer it to the bank statement. If payment shows, continue to receipt it.
- Create a file for remittances received on email but funds not showing on the bank statement yet. Name this file “Awaiting Proof of Deposits.” Download remittances daily. It is often argued that the money is already in the bank and it is therefore not so urgent to do it daily. Do it daily to ensure easy referencing and timely patient information.
- If you are in possession of a remittance advice but the amount is not showing in your bank yet, ‘phone the medical aid to follow up.
2. Bank deposits from medical aids
- Go through the deposits in your bank account every day. If you do not have access to bank statements and have to rely on the optometrist or practice manager to supply these statements, keep the remittances in the “Awaiting Proof of Deposit” file. Stress the importance of receiving regular statements to enable you to manage debtors with your Optometrist effectively. When a patient ‘phones in with a medical aid query, we need current information and not information dating back two weeks!
- Reconcile the remittance advice with the deposits on the statement. Use different colour highlight pens for medical aid and patient deposits.
- If there has been a deposit from the medical aid, but you have not received a remittance advice, ‘phone the medical aid to either fax a copy or email it again.
3. Electronic payments made by patients
- Carefully examine your bank statement for deposits from patients. Their references are often not clear. “Johnny’s specs” will be very hard to trace. Inform patients to use their account numbers as a reference number. Immediately receipt it and write the receipt detail next to the entry on the statement.
- Caution: Sometimes a patient will fax or email a payment confirmation for an electronic payment to you. View this in the same manner as the remittance advice from the medical aid. Keep it in the “Awaiting Proof of Deposit” file under a separate heading until you can verify the deposit. Do not receipt it before the money appears on the bank statement thus ensuring that no receipts are duplicated!
4. Direct deposit made by patients
- When a copy of a direct deposit slip (money or a cheque that was deposited by the patient at his/her bank) is faxed to you, handle it in the same manner as electronic payments. File the faxed copy in the “Awaiting proof of deposit” file along with the medical aid remittances.
If you ask different practices in the optometric industry on which day they usually send out their monthly statements, you may get 31 different answers. If you ask them why they send it out on that day, you’ll only get a few!
Is there a “better” date to send out statements? Yes!
- Mailing statements via snail mail:
Print your statements on the 15th of each month. Before sending it out, we have to work through it to check that we are not sending out credit balances; that patients with special arrangements are taken out and dealt with according to the payment arrangement. Mail the statements by latest on the 18th to ensure that your statements will reach your patients in time to be worked into their monthly budget!
On 30 days, send “medical aid statements” to the patient as well. Your statement should make it clear that: “In the event of the medical aid failing to settle the amount in full, you will be liable for settlement thereof. Please follow up with your medical aid.”
Your banking detail should appear on your statements.
- Emailing statements:
If we prefer not to print the statements and rather send them via email (a popular option), use the program filters to do the checking before sending out the emails on the 20th of the month.
- Print an aged analysis for “credit balances only” and check that the information is 100% correct before sending out the statement.
- Print an aged analysis showing medical aid balances outstanding after 30 days and send it to patients via email.
The debtor’s follow-up process
The following flow chart is a guideline or summary on how to manage the debtor’s process.
- Debtors Diary
Most of the software programs offer stunning diaries on their systems. If you are in the habit of using this diary for anything, keep doing it. However, there is still nothing as effective in the credit control process as an ordinary diary and a pen!
When you are busy to discuss an account enquiry with a patient, you are working on the computer, and you need to write things down. Use your diary and make all the relevant notes in the space provided on the patient profile.
If Mrs. Jones said she would pay on Tuesday, 13th April, make a note on Friday 16th April to check the patient’s account for possible payments. If nothing has been receipted, check the bank statement for any payments not receipted yet. If she breaks her promise and you do not call her back immediately, you have missed an opportunity to show consistency – a very valuable personality trait to have in this job!
Open your diary first thing in the morning to check which account balances must be checked, who should be called, emailed, or should receive a final demand!
- Request for Payment Letter
If no payment has been made by the promised (10 days) date, phone the patient: “Good morning Mrs. Jones. This is Jane calling from Foureyes Optometrists. I spoke to you on the 3rd April regarding a short payment by your medical aid. Have you received the letter I sent you. You did well. I see that I have not received a payment from you. Can we make an arrangement for payment now?”
Whatever is promised, make a note on your computer and in your diary. Send a request for payment letter with the promised date as the deadline-date along with a statement.
- Final Demand
Should you receive no response after sending out the request for payment letter, ‘phone the patient on the date written in your diary. If no agreement can be reached, print a statement and attach a Final Demand letter before you post it by registered mail.
This letter gives the patient a final payment date before being handed over to a debt collector. Remember to make notes on the computer system as well as in your debtors’ diary. Should the patient still not respond or make an offer to pay the account, make one more phone call informing them that they are being handed over to a debt-collecting agency on “Friday” – and do it!
Debtors what if’s
The patient never collected the glasses?
- Phone, phone, phone!
- Make an arrangement
- Credit only the price of the frame and hand the account over to a debt collector. Do not throw away the lenses – keep it in the patient’s file.
- If m/a paid – post it to them with registered mail.
The Medical Aid or Insurance has paid the patient directly, and they have not collected their glasses?
- Complain with m/a or insurance.
- Put the collection process in action. Keep track of everything you do in preparation for handing the patient over to a debt collector.
The patient is charming and is really trying hard to pay?
- Make an arrangement and ensure that the patient keeps to it – even if it’s R50 per month. When a payment is skipped, hand over.
The patient always makes promises and knows the optometrist well?
- Handle carefully but firmly.
- Talk to the optometrist – sort out regulations of practice. Credit Controller should be the one discussing overdue amounts with patients.
- Make your arrangement – without optometrist.
Divorcee – “other” parent is responsible:
- Parent bringing in the child must see to payment. Inform them that should it not be the case; you will need written permission from the responsible person that they will take full responsibility for the account.
- When the person bringing in the child is not the main member of the medical aid, discuss the handling of the account with them. Offer that they settle upfront and claim the money from the medical aid – although this is not likely to happen.
- Offer to call the responsible person, fax or email the patient information sheet to him/her and do not continue incurring costs before this document is returned.
The patient passed away:
- Proof of death.
- Frame back in stock – write off the total amount.
- If the account was partially settled by medical aid, contact the family and ask what they want to do with it.
- Account for the full amount to an estate.