Capko agrees. Charging interest “is a very touchy area. I really discourage it. It’s easier just to make sure you are collecting right.”

Her tips for tightening up:

• Don’t offer credit — If a patient does owe you money, try to have him put his balance on a credit card or use a credit agency such as CareCredit that extends credit lines to patients. You get paid in full, and the patient can work out his troubles with someone else. Patients need to pay down credit cards to keep the card and avoid ruining their credit altogether. “I don’t think the loyalty to a physician is as strong as loyalty to a credit card,” suggests Jeffrey Hausfeld, a physician and managing director for FMS Financial Solutions.
  
  
• Use your team — The best time to collect is always when the patient is in the office, but it doesn’t often happen. “We’ve gotten really good at training the front office staff to not hold patients accountable for anything but their copay and that needs to change,” says Capko. “Let’s say you have a patient who didn’t pay you and now has gotten two statements. They come into the doctor and no one says anything.” That just tells the patient you aren’t serious, Capko points out. “We do have to wire down how we are going to comply with our own policy.” Consider the front desk an extension of the billing office. Make sure the front line can see when patients have deductibles, coinsurance, or unpaid balances and that they know what to do about it.
  
  
• Act fast — “If patients don’t respond to the first statement, they are telling you it’s not important,” Capko points out. Don’t keep sending statements. “It’s very easy to ignore something that comes in the mail. Try picking up the phone.” Staff can simply say they are calling to help the patient work out a payment method.

In general, take a hard look at your policies for collecting from patients and a hard look at whether anyone actually follows them. “If you have a lot of patients [you’d consider charging interest], something else is wrong,” suggests Todd Welter, who often reviews billing departments from his Denver-based consulting firm. Find out what’s broken in your house before you go hard after patients. You set the tone that patients follow.

Charging interest?

Of course, no matter how diligent you are, some patients are not going to pay. Even then, think twice about charging interest.

“Physicians cannot act as lending institutions. Otherwise, you are like a bank. You aren’t licensed to be a bank,” warns Hausfeld.

If you assess an interest fee, you must comply with the Fair Debt Collection Practices Act as well as state truth-in-lending regulations, an onerous task.

Hausfeld has seen many practices get in trouble for violations. In one instance, a staff member called a patient’s workplace and left a message saying, “This is Dr. So-and-So’s office calling about a delinquent account.”

“There are a lot of people out there who are professionals at not paying their bills. The patient went after this physician’s office,” Hausfeld recounts. “They threatened to sue, and the doctor ended up writing off a $3,000 account because he knew he was wrong.”

A simpler option: Charge a flat fee on all late accounts.

Try a late fee

“Most practices elect to charge a late charge. That’s a whole lot cleaner,” says Mertz.

A flat fee “very often works out to be more anyway. A $20 reprocessing fee on a balance of $200 is 10 percent. That’s probably loan shark-type interest,” Welter says.

How much should you charge? “A physician really ought to sit down and see what it costs them to rebill and do what’s fair,” Welter says, but $20 to $30 seems to be the norm.