Old A/R

November 1, 2004

We are beginning a process to get rid of old patient A/R. Is there a rule that says you cannot discount your fee more than the Medicare allowable? Also, how old is too old to collect?

Question: We are beginning a process to get rid of old patient A/R. Is there a rule that says you cannot discount your fee more than the Medicare allowable? Also, how old is too old to collect?

Answer: There's no rule, but many practices don't go lower than Medicare. The key to collecting on old A/R using discounts is to be consistent. Don't take a subset of patients and offer only some the discount. You can't discriminate against anyone. Further, your discount should reflect your cost of collecting, so offer the discount if the payment is paid then and there. Because some payers address discounts in their contract with you, if offering discounts, I recommend consulting with an attorney before you begin offering them.

Regarding "how old is too old," the statute of limitations in most states is three years or more. In any case, you shouldn't spend more money attempting to collect old accounts than you actually collect (some estimate patient collections consume 30 times more resources than insurance collections), and avoid any public relations snafus. For example, if your former manager failed to send out statements for a period of three months last year, and you all of a sudden put those patients in collections, don't be surprised if one of them calls the local newspaper. If you're collecting old balances, be fair. If your business isn't in order, then don't expect patients to flood your mailbox with checks. They'll likely resist, and you may cause more harm than good by your efforts.