We have received a number of inquiries regarding how patients’ accounts should be handled and how to communicate with patients whose accounts become delinquent due to this current crisis.  We have heard of a consulting firm who has actually recommended to their clients that they have a 90 day period where payments are waived.  We have also heard from the office manager of one of our clients who wanted to return all recent payments made and defer all further deposits of payments made until the crisis is over.  First, we do not recommend that you waive payments on patients during this situation.  Second, we recommend that all payments received and all auto-payments continue to be processed normally.  Before you jump to the conclusion that we are being harsh or uncompassionate, consider a different point of view and that is that you should trust that if your patients are paying you as per their Financial Agreement it is because they can afford to and offering to waive payments or failing to deposit and returning payments you have received is, in our opinion, foolishness.  The great majority of you have the significant benefit of knowing if your patients/parents are mature, in a stable personal situation, and have a history of integrity with respect to their financial obligations.  You also know the patients/parents who do not fit that description.  Said differently, you know who your “A” patients are and you know who your “B” and “C” patients are.  Our primary recommendation with respect to delinquency control has not changed with this crisis, and that is to at all times be considerate, compassionate and empathetic with all patients, of any credit grade, who have bona fide  and verifiable financial problems that prevent them from making appropriate payments on their account.  This crisis does not change that.  For instance, it is perfectly appropriate that during this situation you waive late fees on patients’ accounts during a period of time that they are unemployed.  It would not be appropriate that patients’ who are seriously delinquent be dismissed from the practice during this situation.  There is an exception to this and that is a patient (typically a B- or C) who has been chronically and repetitive delinquent long before when this current crisis started.  Those patients should be handled as we have recommended in the past.

Most of your Financial Coordinators have already received telephone calls from patients/parents communicating a concern about their ability to make their payments on time due to having been laid off.  The Financial Coordinator should be allowed to make decisions customized to the patient/parent’s current situation, but also take into consideration the past payment history.  For instance, an “A” patient who has historically always paid on time, who is now in a tough financial situation; your Financial Coordinator should have the authority to waive payments for 60 days or 90 days and add those missing months to the end of the current financial contract.  On the other hand, we all know that some patients, those who come up with every excuse in the book as to why they have not kept their financial agreement with you, will use this current situation in order to continue their poor payment habits as they have before the Corona Virus existed.  While you might choose to be mildly more forgiving on a few of those cases, most you would handle as normal.

With regard to those who use the “I don’t want to pay if I cannot be seen” excuse, first you will not have too many of those.  When you do though, the only correct answer is that the financial agreement is 100% separate from the clinical treatment.  The patient agrees to pay in a certain manner and the doctor agrees to straighten their teeth and give them a beautiful smile.  The obligation to pay according to the financial agreement does not change because the patient skips an appointment nor does it change if the doctor finishes the case 4 months earlier than planned or 4 months later than planned.

Finally, it will be interesting for us all to learn how severe the problem with patient delinquency actually gets.  If we went back to the “Great Recession” and the housing, etc. crises that started in late 2007, early 2008, a lot of bankruptcies happened, a lot of layoffs happened, and by the early part of 2010 the unemployment rate hit 10%, the highest it had been in more than 60 years (granted the unemployment rate will spike significantly higher than 10% with this current crisis).  Still, with all the problems we had back then, the delinquency rate of all of our clients went up less than 1/2 of 1%.  One thing that many people not in the financial industry find hard to believe is that during one of the most severe financial reversals in our country’s history, less than 2% of “A” patients’ credit grades deteriorated.  So, reasonable leniency for the good guys who have kept their past agreements and very little for those for whom this epidemic is merely the most recent excuse.

Credit Grading

One thing that we, and our clients, have always known is that doctors who know the level of maturity, stability, and integrity (credit grade) of their patients/parents have a significant advantage over doctors who do not.  Their overall case acceptance is better and they suffer few of the clinical and scheduling problems, as well as the loss of revenue caused by patients who are delinquent.  Using the ZACC tool (www.getzacc.com) is inexpensive, has no impact on a patient’s credit score, and is simply invaluable in the effective management of an orthodontic practice.  In a time of potential recession and/or high unemployment, that is truer today than ever in the past.