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Physician Beware: ‘The Dog Ate My Checkbook’


You’ve heard it all from patients who have outstanding accounts. How can you tell a genuine plea for help from a sob story, and when does it matter?

BILLING CLERK:“Hello. May I speak with Mary Smith please?”

MARY SMITH:“Who’s calling?”
BILLING CLERK:“Jan from Dr. So-and-so’s office.”
MARY SMITH:“I’m sorry, there’s no one by that name at this number. [Long silence......*Click*]”

Ah, the joys of patient collections. The only redeeming part of the exchange was that Jan didn’t have to listen to yet another lame excuse as to why the patient hadn’t paid her outstanding balance.

The creative range of nonpayment excuses from patients seems infinite and sadly shameless. “We have had ‘Katrina victims’ who can’t even find New Orleans on a map and seen patients out shopping at expensive jewelry stores the same day they ‘can’t’ pay their copays,” reports an anonymous office manager on the pediatric-centric e-mail list PedTalk.

“I’ll pay you tomorrow with a credit card” is also popular, says Melissa Torres, clinical administrative assistant at Bay Crossing Family Medicine in Annapolis, Md. Or, it’s a more subtle rebellion: “They post-date checks without asking. When you point it out, they say, ‘Well, I have a deposit coming.’”

Or they blame-shift, like this excuse, also culled from PedTalk: “My husband wrote the check for me to bring but I had it on the visor and it blew out the window (it was early spring and cold) and I’m not allowed to write checks.” This iron-clad explanation would leave many a front-desk clerk blinking and mute (and the hinted-at back story provokes much sympathy for her husband).

“I thought insurance would cover it,” is another extremely common defense from responsibility-duckers, says physician billing consultant Lynn Thomas, who’s with Annapolis, Md.-based SHR Associates. True, insurance policies can be as easy to decipher as the U.S. tax code, but such claims are not always so sweetly ingenuous. For some, a glowing coal of resentment burns, as in: “The doctor doesn’t deserve to make that much; he spent 15 minutes with me and made $500,” recounts Thomas.

Torres concurs. As a small, patient-centered practice who eschews submitting reimbursement claims to insurance companies, Bay Crossing attracts many cash clients. After explaining the practice’s self-pay policies to potentially new patients, she hears “Are you kidding me?” often enough. “It amazes me what people value, in terms of the doctor’s time and services,” she says.

Yes, you want honesty from your patients. Economic catastrophe happens - seemingly more and more often in today’s economic climate. How can you resolve an outstanding debt with your patient if you don’t know what’s really going on?


You’ll never eliminate the unpleasant task of chasing down outstanding patient debts, but you can exact some control. Here are some effective tactics to minimize the kvetching and maximize the collecting:

  • Make sure your payment policies are crystal clear. Create a new-patient brochure outlining all your office policies. Require copays before exams. Train your staff to ask for payment politely but resolutely, all following the same protocols. Post your payment policies in the waiting and exam rooms. Develop internal protocols, too, to make sure your staff is following them. Payment policies can be tricky.

  • Verify insurance eligibility before an exam. Knowing a patient’s eligibility for a given procedure - and informing her of the status - will help both of you to stay on top of the bill. Make it a priority to have answers to such key questions before your patients show up for an office visit. You don’t have to chase what you’ve already collected.

  • Take your patient at his word - at first. You never know what could be going on in peoples’ lives. “You have to fight that human tendency to judge, to say, ‘You can’t pay your bill today but you just drove up in a convertible?’” says Torres. That car might be borrowed or about to be repossessed. Instead, think flies, honey, and vinegar. Sure, you want - and deserve - your money, but kindness and flexibility are more likely to get it than skepticism and disdain. Can he pay half now and then $50 a month? The sincere ones will be grateful, and it beats not getting paid at all. But make sure everyone understands exactly when and how to offer payment plan options, if you’re going to offer them.

  • Ask for some proof of financial hardship. Plenty of economically strapped people just suck it up and try to make good, never mentioning to you they’re scraping the bottom. So take care not to “reward” only the squeakiest wheels. For those with frequently empty wallets, or those requesting a large financial concession on your part, push back. Hand such patients a “financial hardship” form (that you created), in which the patient outlines what special dispensation he needs and why. Many patients won’t even bother to fill out the form, so you needn’t feel obliged to assist them.

  • Set limits. Unfortunately, a few of those petitioning for financial clemency will prove themselves less than honorable. Such dissemblers will agree to your offer but not follow up. But unless you have a “mega-practice” with tens of thousands of patients, you - or more likely, your front-desk staff - may be able to spot such chronic pretenders, as many identify themselves with a conspicuous lifestyle that belies their supposed destitution. If every time you see a patient, says Torres, she’s got a Starbucks coffee and a new purse, yet regularly claims she’s short on her copay, that’s a clue you’re being played.

  • Take action as soon as it’s warranted. After no more than three clearly worded, easy-to-decipher reminder notices, take action. This means what you’ve decided it means (and what you’ve clearly delineated in your payment policy brochure). Thomas recommends using a collection agency. You could even dismiss the patient from your practice, if the problem feels big enough. This route can be hard for physicians to take. A softer approach: Embargo a hard-core delinquent patient until the debt is satisfied.

Most importantly, don’t be part of the problem. “[Patients] know that physicians in the past are willing to keep billing and billing,” says Torres. If this is still you, put a stop to it.

  • Separate clinical and administrative duties. As a physician, you may find it hard to get tough with a patient on a money issue. There’s an emotional barrier that can be uncomfortable or embarrassing to cross, as doing so may feel in direct conflict to your inner beliefs on what it means to be a physician. That’s why so many physicians cave, choosing to eat the cost of a nonpaying patient. For that reason, says Thomas, “I always recommend that doctors don’t discuss the finances [with patients].” Assign this task to an appropriate admin person, one who’s forthright but not a bully. And, importantly, support this bill-collector’s efforts; don’t undermine him by telling the patient later he doesn’t have to pay “this time.”

Of course, says Thomas, as the physician, you certainly have the right to give the truly needy an occasional pass if you so choose. Be careful not to cross any legal lines here, such as waiving a copay here and there, which would violate the terms of your insurance agreement. Make sure, in fact, that you have a clear policy for financial-hardship discounts, and that you follow it, lest you be accused of playing favorites, or of having changed your “usual and customary fee,” which would prompt payers to demand discounts for them. (For a more comprehensive treatment on the potential pitfall of negotiating patient payments, read “

Patients, Pay Up!


What does it matter?

Patient accounts in chronic arrears erode your bottom line. Many practices choose to write off the debt - true, an end to the stress, but it obviously costs you. But so do collection attempts throughout the year. Mailing statements - about 60 cents apiece. A reminder phone call - about $5 in staff time. Research on a delinquent account - about $30. Bad debt due to uncollected deductibles runs practices about 18 percent annually, with the self-pay default rate at 30 percent or more. Even if you use a crack collection agency, you’ll only see a portion of the resolved debt, after the agency takes its cut.

So get smart about patient pleas by pre-empting much of it with good preparation and clear communication. And don’t give up.

Shirley Grace is an associate editor on staff with Physicians Practice. She can be reached at

This article originally appeared in the February 2009 issue of Physicians Practice.

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