Monday, March 19, 2018

Collection Agencies 101

By Guest Blogger: Andy Cleveland

Selecting a collection agency is like purchasing a hand piece, a car or a toothbrush: not all are created equal. Depending on the customer and circumstance, factors to consider are cost, risk versus reward, patient relationships, staffing scenario and brand coherence.
Lately, there have been a noticeable amount of social media posts looking for someone to “recommend a good collection agency.”  My goal is to help educate, motivate and empower the dental community to make informed decisions when looking into a collection agency for their practice.
First, it is important to acknowledge that using a collection company is merely treating the symptoms of an inefficient system. Some quick tips to help reduce the need of a collection service are:

1.  Properly pre-estimate the patient’s insurance portion at time of service. Performed internally, or by a third-party entity, it needs to be done properly.

2.  Have third-party financing options for people with a spectrum of credit scores. 

3.  Train and empower your staff to collect at time of service. If patients walk out without paying, you are creating the problem. Setting a cultural expectation to
be paid at check out relieves you from the burden of chasing down after-service payments.  

Inevitably, there will be some outstanding accounts receivable, regardless of practice efficacy. If the amount is outside your comfort zone, it's time to hire a company to help with the collection. 
Without further ado, here are 8 questions to determine the best fit for your practice when hiring a collection agency. Keep in mind, the answers are not necessarily definitive, but are tools to aid in your selection.

1.  In which states are they licensed or bonded?  Knowing this will help determine if their geographical coverage is sufficient. A collection company not authorized to collect in a neighboring can have damaging effects. In this case, going with a nationwide company is usually a safe bet.

2.  Do they have a proven process? Do they give examples of scripted patient communication, or are they  simply  “winging it?” Ultimately, how they communicate with your patient is a direct reflection of your values. So, if they seem vague, it's a red flag, as we're all prone to simple human error. The last thing you want is for your patient to leave negative reviews on your practice should they be treated unfairly by your collection agency.

3.  How is the company compensated?  Are they working strictly on a commission basis? Though initially attractive, there is no promise of performance from either party, which often leads to disappointment. If they have a large client with high volume and large balances, whose accounts are they going to call first? While neither malicious nor fraudulent, it just makes good business sense for them to cater to the high volume client, since dental patient balances are generally smaller.

4.  Technology.  Do they integrate with your software? How do you send them the data? Are they HIPAA compliant? A substantial accounts receivable that requires manual entry into a third party system can not only build up employee resentment from laborious data entry, but also marks the task as low priority. Look for a partner that can seamlessly sync up with your practice management software. If you'd like to see this done, let me know, the demo takes only about 15 minutes.

5.  Do they specialize in the dental field? If they work in other industries, how comprehensively do they understand your business?  I specialize in working with dental practices – it is what I am most passionate and is my core industry. Always be on the lookout for a company tailored to your needs. 

6.  Are the callers located in the U.S. or overseas? Are you willing to allow your patients to be called from someone in another country for cost savings? While cost is important, customer service, public perception and value are equally so. 

7.  Do they report to the credit bureau? Many collection companies insinuate they do, but never follow through. While every financial company reports to the agency when a debt is unpaid, most often dental practices do not, only to hurt the practice in the long run. 

8.  Does the company offer first party billing solutions? Will they work as an extension of your practice like a virtual assistant to your team? If the majority of accounts pay before 90 days, not only are less people being turned over to "collections," they are more likely to stay loyal to the practice, as well. 
If your practice is considering hiring a collection agency and needs further information, please do not hesitate to reach out. I will be happy to answer any questions or assist in any way I can.

About Andy Cleveland
The Dental Accounts Receivable Ninja” has been in the revenue cycle space for almost 20 years and has served a variety of capacities. He began working with dental practices by motivating difficult patients to pay accounts on everything from hygiene visits to full mouth restorations. Learning the business from the ground up, he developed a proficiency in recovering lost revenues and rose to the top of his field.  Andy realized his skill sets were better utilized working with clients, so he moved to the consulting and service side of the business where he could make a greater impact. Currently, he works with individual and group practices optimizing their patient accounts receivable process to maximize profitability and efficiency, patient retention and frustration reduction.  

Check him out at

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