Getting clients to pay

My office manager suggested that we discount hard-to-collect, 90-day-past-due accounts as an incentive to encourage patients to pay at least something. We'd offer up to 25 percent off the bill, depending on how much the patient pays. We'd require the patient to adhere to a payment schedule until the debt's paid off. Is this a good solution or does it contribute to the problem?

Jim Remillard

Such discounts can be a reasonable approach to clearing up long-term bad debts and increasing cash flow, says Jim Remillard, MPA, CVPM, owner of Remillard Management Associates in Cool, Calif. But you don't want to get into the habit of offering this type of discount on a regular basis, says Remillard, because clients may start to expect discounts if they just hold out long enough.

"I've used this approach more in large or mixed animal practices, because they traditionally face higher accounts receivable balances than small animal practices," he says. The first step is a client letter. (See Remillard's example.)

Of course, working on prevention is the best approach; try not to let clients leave without paying for service, he says. Staff members, doctors, and clients need to understand that you expect payment when you provide services.