In February we celebrated our 39th anniversary of credit management consulting and I can still remember telling my first orthodontic client (George Barkett in Vero Beach, FL) that he would never be able to clean up his delinquency until he and his team got serious about their financial arrangement and delinquency control policies related to the children of divorced parents.
Today, even among our clients, the single greatest cause of delinquency among “A” type patients is the result of the practice having mishandled the financial arrangements with divorced parents. I qualified the statement by saying “A” type patients because having delinquency with an “A” type patient is far more damaging to practice well-being than is delinquency with the “B” and “C” patients. If a “B” or “C” patient gets delinquent the worst-case scenario is that you lose some revenue. If “A” patients get delinquent, you lose the new patients that would otherwise have been referred by those patients, and the rate of case acceptance of patients referred by “A” patients typically exceeds 85%-90%! So, to be clear, we do not attempt to avoid delinquency in order to avoid the loss of revenue from the delinquent patient. We attempt to avoid delinquency in order to avoid the lost relationship we would otherwise have with that patient/parent and thereby gain patient referrals and more case starts.
Getting back to the divorce issue; since we want to maintain a great working/social/clinical relationship with the parents of divorced children, we must not make a financial arrangement or enter a financial relationship that is almost certain to create future conflict and future delinquency. This is not at all difficult if you are willing to establish, and follow, certain “rules” regarding how you handle divorced parents.
The first step is to understand the law. There is no Federal or State law and no divorce court in this country that can dictate to a doctor what his financial policy must be regarding how the practice chooses to finance treatment of children of divorced patients. For instance, it is common practice for divorce courts to tell parents of minor children that they must each be responsible for half of their children’s health care. Separately, divorce courts will often put into their decree that the non-custodial parent is responsible for all their children’s medical/dental expenses. What must be understood is that while the divorce court has absolute authority over how the divorced parents handle expenses for their kids, that divorce court has no authority over how you make your financial arrangements! So, if you understand this and implement a couple of “rules” then you can practically eliminate any serious divorce related delinquency. Those rules are:
#1. Financial arrangements are made only with the primary custodial parent.
“Primary” is defined as the parent with whom the child lives 50.1% of the time. While the courts often assign “joint” custody, it is extremely rare (less than 1%) for there to be a situation where the child lives exactly 50% of the time with each parent. In the case where one or both parents are insistent that they share true 50/50 custody, the parent bringing the child in for the exam is simply declared to be the primary custodial parent. If both parents bring the child in, you simply explain your policies and choose which of the two is the primary custodian as defined above. The person signing the financial arrangement document is doing so with full knowledge that they are personally responsible for the entire account balance and they are agreeing to pay the entire account balance without regard to whether or not the non-custodial parent pays child support, honors the divorce decree, etc.
#2. Financial arrangements will never be made with both parents.
There will be no discussions with either parent regarding “his half” or “her half” of the debt. Since you are making a financial arrangement with a single person, no other person owes you anything. Even when a divorce decree dictates that a non-custodial parent must pay half of the debt, you must remember that this non-custodial parent does not owe you anything! Again, the divorce court does not have the authority to make a party to the divorce financially responsible to you. That person’s financial responsibility is to his/her ex-spouse. There will never be two accounts in the computer, and therefore two responsible parties, for one patient! You do not split financial responsibility.
#3. Should the account become delinquent, collection activity will never be conducted with the non-custodial parent.
It is common for a mom, for instance, to get angry with her ex for a host of reasons and even though the financial arrangement was perfectly handled at the case start, it seems that the moment the custodial parent (most commonly the mom) gets delinquent, the excuse is the ex did not pay child support and mom asks you to get involved in their marital problems and try and collect on her behalf from the ex-husband. You must not fall into that trap!
Handling financial arrangements and delinquency control in general, and specifically with divorced patients as discussed here today, is really a very simple process. If the banks and other financial institutions do not split financial arrangements and make joint loans to divorced people, you should not either!
As always, if you or your staff have any questions regarding the proper handling of divorce, you (or they) may call our office and speak to me or to Becky to get your questions answered. You may also email me at paul@zuelke.com.
