Accounts receivable in action.

Eighteen months ago our 35-person group practice read with great interest Dr. Joseph S. Eastern's article ("How to Slash Accounts Receivable," March 15, 2006, p. 13).

He suggested obtaining a credit card "imprint" from all patients and billing them once the patient responsibility portion was established by their insurance company. This business practice is exactly analogous to what every rental car agency and hotel does with its customers. Keeping a credit card on file for future purchases is also what eBay, Amazon.com, and all airlines do.

On Jan. 1, 2007, I instituted his suggestions in my clinical center. To date, all my expectations have been exceeded for decreasing my bad debt write-offs and markedly reducing the time and effort to collect payment. For the first time in 25 years of practice, I have truly adopted new business methods for collecting receivables as opposed to merely applying new technologies to old ways of doing business.

In the past we have extended credit to every patient who walked into our office without any verification or research. As insurance deductibles increased and more patients became responsible for the first $2,000-$3,000 of their medical care, our accounts receivable mushroomed.

Now when we register patients, we have them read and sign an agreement that, along with a credit card or voided check, lets us immediately bill them for the patient responsibility portion of their bill. From the receipt of the explanation of insurance benefits, a patient collection is now completed in 1 or 2 days as opposed to weeks or months. We have eliminated the costs of sending out patient statements. Patients are notified of our payment processing via e-mail, thus saving again on statement processing and mailing costs.

Another advantage of our credit card processing system is that we can easily set up payment plans for patients with large patient balances. Once the payment plan is set up, in less than 5 minutes, everything else is automatically deducted on a set schedule with e-mail notices of all transactions.

We no longer worry about collecting money from patients prior to surgery or determining exactly where they fall on their deductible versus out-of-pocket maximum continuum. There are costs to this system, but they are reasonable and essentially involve the same fees that every other business has accepted for the use of credit cards.

The most amazing revelation of instituting this new business practice has been the overwhelming acceptance by my patients; 95% of my patients sign their billing agreement during their initial reading with no further questions or explanations necessary The remainder agree after an explanation from either myself or my office manager. I have had 1 patient out of more than 750 during the past 7 months who has refused to sign the agreement and therefore left my practice because I chose not to see her.

I was the first physician to institute this policy in our group practice, and I saw the biggest stumbling block and negativity coming from the other physicians in my large group. As more of my group practice partners adopted this collection technique, they too have been impressed with patients' willingness to agree.

Currently our collection process interfaces our billing company with a credit card/automated clearing-house processor. Ultimately we would like to see our billing company become the source for card debits directly so as to avoid a middle layer. One improvement I would like to see in the system involves authorization of a card or checking account at the time of entry to verify adequacy of the account.

Like it or not, all of our practices are businesses, and we must treat them as such.

Robert B. Gore, M.D.

Englewood, Colo.