Do More than write it off

You have tried, you have worked the account, you even may have tried a collection agency, but at the end of the day, or generally after about 5-6 months of trying to collect the balance on a patient account, you stop the effort, and write it off.

At this point, you have a patient that is it highly doubtful that the could pay that balance, even if they wanted to.  Unfortunately, they did not tell you about their financial situation at the time of service, you would have been happy to work with them on a payment plan, or perhaps help them access some charity care resources.

The first thing you should be doing is reviewing your staff’s recommendations for write-off.  Each one should be looked at to see what can be learned from them.  Never let the staff that is responsible for collections do the write-off, after all, is the write-off necessitated by patient impoverishment or is it the result of poor practices in your office.  Reviewing write-offs is a control and educational exercise, which can save you from future write-offs.

Write-offs mean that you have given up on collection efforts.  Write-offs of uncollectable is the norm among physicians. One study shows that in 2016, 40% of physicians fail to collect over $31,000 a year from patient financial responsibilities, while another 20% fail to collect over $66,000.

While a portion of the dollars lost to a failure of a collection of patient responsibilities resides in the inefficiencies of physician practices, there remains the reality of the necessary write-off when patients are unable to make payment on that debut, after the office has tried.  So, you write-off the balance.

While most practices stop at writing-off balances, a practice should take one more step and make arrangements to legally abolish that that balance for good.  The write-off removes a balance from the practice books and does not consider it again, taking any further action.  Practices are urged to take one further step, to arrange for that write-off to be abolished for good, legally, and pragmatically.

Technically, under IRS Tax Code if a debt is forgiven, which is what a write-off is, the economic benefit of eliminating that person’s debt is taxable to that person.  (The IRS rules call for sending 1099-C for cancellation of debt if the amount is over $600.) Additionally, if a practice has used a collection agency, that debt may have been reported to a credit reporting agency, which has negative implications that could impact not only your patient’s credit score but also their job prospects, as many employers check credit ratings as part of the hiring process.

Send your write-off to R.I.P. Medical Debt, a 501C-3 charity that can legally abolish this debt against your patient, without taking consequences to the patient, and with the removal of any report on the patient’s credit report.

At no cost to you, RIP Medical Debt will advise the patient that the debt has been abolished, which will remove this economic burden from them.  It is uncommon for practice to notify a patient when a balance has been written off, leaving the patient hesitant to obtain necessary medical care, thinking that they will be denied care, or embarrassed in the office for that past due balance.

RIP Medical debt can be reached at www.ripmedicaldebt.org

The outstanding patient balances, that a patient is unable to pay has implications for patients, pressuring them to avoid care, when necessary at the early onset of an illness, when appropriate, for preventive care and screenings, as well as when self-care and time would be insufficient.

One more step at the time of a write-off is using your heart to do what is right.