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Managing Failed Payments and Unpaid Bills (Sample Process)
Called “dunning,” many businesses find themselves chasing after unpaid bills. Even in direct primary care, with the streamlined monthly billing, you will find that a certain percentage of charges simply won’t go through automatically for a variety of reasons (think: stolen cards, lost cards, expired cars, insufficient funds in a pre-paid or HSA card, etc.).
For those whose payments don’t go through automatically, a systematic process will both create clarity for your staff and patients and will also allow you to operate in a business-like fashion without letting your big, DPC heart get in the way.
Here is a sample process:
From Allison Edwards, MD | Kansas City Direct Primary Care
Clinic-Triggered Cancellation for Nonpayment (using AtlasMD)
All monthly membership payments to the clinic must be paid via automatic payment (it’s in the contract). If a patient’s auto-pay on the 1st or 5th (we only allow the 1st or 5th) fails, the following ensues:
Notification (numbers indicate days from failed payment -- though we usually start this process on the 5th of the month):
- 0: Each failed payment triggers an automatic email from AtlasMD.
- 5: Names are added to the “Failed Payments” list (a living GDoc) on the 5th (or next business day) of the failed payments; each of these members is called or texted by the front staff. Results of the communication are noted on the list.
- 15: Any balances that remain unpaid after the 15th receive a standard letter via US mail and an identical email noting their failed payment and impending 30-day termination.
- 30 or 31: the auto-payment system tries to charge the patient again at the start of the new month (for last month’s balance + current month’s fee). As detailed above, on the 5th the list is updated with new failed payments, and a note is made of the payments that have failed 2 months in a row. Just as before, an automatic email is triggered by AtlasMD notifying the patient of this (second) failed charge.
- 45: A final letter of termination due to nonpayment is created. The letter is then sent to their primary mailing address & also sent as an attachment to their email address.
Determining the remaining balance & ending the membership:
- Remaining balance = the previous month’s fee + prorated half of the current month’s fee (total = 45 days’ worth of membership following their first failed payment). Proration = $(12*(monthly membership fee)/365)*(15).
- End the subscription charge in their chart & delete the current month’s full charge.
- Add prorated fee, as above, as a miscellaneous charge and label it “Medical Services - (month)” then select “Apply charge to the current invoice?” and “Add payment for this charge?” to (try to) run the card for the remaining balance.
Assigning all files & messages:
- In the files inbox in AtlasMD, make sure that all files & messages relevant to this patient are assigned to them (including the letter just created).
Archiving the patient:
- From the billing section of the patient’s chart, the option to “Add to collections” is selected from the cogwheel. Note: we do not actually send the patient to collections, this is just a designation to separate out those who have a remaining balance with us at the end of their membership.
Adding to the Master Status Report
- We track -- as best we can -- the reasons why people leave the practice. The person archiving every patient will add the patient’s name, enrollment details, etc. to the most current Master Status Report.
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Managing Failed Payments and Unpaid Bills (Sample Process)
Called “dunning,” many businesses find themselves chasing after unpaid bills. Even in direct primary care, with the streamlined monthly billing, you will find that a certain percentage of charges simply won’t go through automatically for a variety of reasons (think: stolen cards, lost cards, expired cars, insufficient funds in a pre-paid or HSA card, etc.).
For those whose payments don’t go through automatically, a systematic process will both create clarity for your staff and patients and will also allow you to operate in a business-like fashion without letting your big, DPC heart get in the way.
Here is a sample process:
From Allison Edwards, MD | Kansas City Direct Primary Care
Clinic-Triggered Cancellation for Nonpayment (using AtlasMD)
All monthly membership payments to the clinic must be paid via automatic payment (it’s in the contract). If a patient’s auto-pay on the 1st or 5th (we only allow the 1st or 5th) fails, the following ensues:
Notification (numbers indicate days from failed payment -- though we usually start this process on the 5th of the month):
- 0: Each failed payment triggers an automatic email from AtlasMD.
- 5: Names are added to the “Failed Payments” list (a living GDoc) on the 5th (or next business day) of the failed payments; each of these members is called or texted by the front staff. Results of the communication are noted on the list.
- 15: Any balances that remain unpaid after the 15th receive a standard letter via US mail and an identical email noting their failed payment and impending 30-day termination.
- 30 or 31: the auto-payment system tries to charge the patient again at the start of the new month (for last month’s balance + current month’s fee). As detailed above, on the 5th the list is updated with new failed payments, and a note is made of the payments that have failed 2 months in a row. Just as before, an automatic email is triggered by AtlasMD notifying the patient of this (second) failed charge.
- 45: A final letter of termination due to nonpayment is created. The letter is then sent to their primary mailing address & also sent as an attachment to their email address.
Determining the remaining balance & ending the membership:
- Remaining balance = the previous month’s fee + prorated half of the current month’s fee (total = 45 days’ worth of membership following their first failed payment). Proration = $(12*(monthly membership fee)/365)*(15).
- End the subscription charge in their chart & delete the current month’s full charge.
- Add prorated fee, as above, as a miscellaneous charge and label it “Medical Services - (month)” then select “Apply charge to the current invoice?” and “Add payment for this charge?” to (try to) run the card for the remaining balance.
Assigning all files & messages:
- In the files inbox in AtlasMD, make sure that all files & messages relevant to this patient are assigned to them (including the letter just created).
Archiving the patient:
- From the billing section of the patient’s chart, the option to “Add to collections” is selected from the cogwheel. Note: we do not actually send the patient to collections, this is just a designation to separate out those who have a remaining balance with us at the end of their membership.
Adding to the Master Status Report
- We track -- as best we can -- the reasons why people leave the practice. The person archiving every patient will add the patient’s name, enrollment details, etc. to the most current Master Status Report.