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Practice Issue: Approach to Collections

Different practice situations can place a D.C. at risk for a malpractice allegation or board investigation. Consider how a difference in two doctors' approach to collections created problems in this scenario.

Walter Allenby, D.C., age 59, had a successful practice when another doctor made him an attractive buyout offer. The terms of the offer allowed Dr. Allenby to continue working in the office as an independent contractor while he wound down the number of hours he worked. Thinking this was an ideal solution as he transitioned into retirement, Dr. Allenby agreed to sell his practice.

After finalizing the sale, Dr. Allenby discovered that many of the other doctor’s policies and procedures were dramatically different from the informal way he ran things. For example, the other doctor was much more aggressive in terms of how he pursued unpaid collections. However, as an independent contractor, Dr. Allenby had no input on how collections were handled.

The different approaches to collections created a problem when Dr. Allenby treated a patient for chronic headaches. When the treatment failed, the patient told Dr. Allenby that she would not pay for the treatment because of the unsuccessful result. Not knowing about this discussion, the practice aggressively sought to collect the woman’s unpaid fees, and the patient became infuriated and said she planned to sue Dr. Allenby.

What Can We Learn?

Whenever a patient is unhappy with the outcome of the care provided, the decision to aggressively collect can be the trigger that prompts an allegation—whether or not the actual clinical care was appropriate.

Dr. Allenby’s problems were caused less by his own actions and more by the purchasing doctor’s aggressive collections stance. At the same time, though Dr. Allenby was happy to give up the administrative and other obligations of owning a practice, he still had responsibilities. He should have alerted the new practice when he had an unsuccessful result and told them about the patient’s threats not to pay. Then, the practice could have decided whether the case warranted aggressive collection actions.

Collections can be a sore spot in many practices. The practice should consider the risk/benefit ratio of engaging in aggressive collection practices. It is often easier to forgive the fee than incur the wrath of the patient.

Additionally, when hiring an outside collection agency, it can be beneficial to have the first account “collected” from a friend/family member with a different name. You can ask this person to report back to you on the style and aggressiveness of the collections tactics. It is also a good idea to get references for any collections agency first.

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