Where a Doctor’s practice’s debt collection function is performed in-house, incentivising staff needs to be carefully thought through to prevent financial loss. A balance need...
Michael Botha, Managing Director of Synchramed
Where a Doctor’s practice’s debt collection function is performed in-house, incentivising staff needs to be carefully thought through to prevent financial loss. A balance needs to be created, and then maintained, one that rewards both staff for a job well done, as well as looks after the practice’s best interests and cash flow.
With this in mind, it is important to understand that a sale is not a sale until the money is in the bank! That said however, any reward or incentive scheme that is turnover based is by default fundamentally flawed. In essence, this is because all that has been achieved (at a stretch) is rewarding staff for billing correctly which is usually in the job scope - and taking this approach can often lead to deliberate inaccuracies as staff can put the practice at risk.
Therefore, the practice needs to understand how to avoid this type of incentive/reward scheme which should be avoided at all costs for the following reasons:
- Without the necessary financial controls in place it is open to massive risk and potential fraud. I have witnessed instances where the practice staff creates fictitious billing in order to overstate turnover to receive an incentive. However, history has shown that eventually staff do get caught - quite simply because they get greedy and become brazen, where the gap between what is in the bank and what is being reported as turnover is blatantly obvious. Sadly, by then the damage has already been done as the overstated staff rewards have been paid out and the money is therefore lost to the practice. Though there are legal remedies available to Doctors, it comes at a cost, both time and money, and the chances of recovering money is often not possible as not only is the cash gone but in some cases the perpetrator as well.
- No housekeeping and maintenance is done on the debtor’s book – as there is no requirement or incentive to allocate remittances from medical aids or private payments. This has a knock on effect as no follow up on monies (not paid/short paid) ever takes place quite simply because it is impossible to tell who does and who doesn’t owe the practice money. In fact, the debt/claim becomes stale as any claim rejected via electronic submission never makes it for payment.
- There is no focus, no effort, take the easy money and run. It is in fact a disincentive to collect money.
Considering the above, good practice dictates that somebody other than the person responsible for billing and collections perform the following checks on a regular basis:
- Reconcile daily consultations and in hospital procedures to a billing report and if any discrepancies are found, it should be investigated immediately.
- Ensure all remittances are processed and allocated timeously.
- Reconcile remittances processed to bank statements ensuring payment has in fact been received.
- Ensure statements for patients who owe money are sent out on a regular basis.
- Hold regular meetings with the credit controller to ensure outstanding debt is actively and timely pursued.
Every practice must determine whether it benefits them to perform a function such as debt collection in-house and should the practice not have the capacity to ensure the above controls can be enforced and adhered to, then thought needs to be given to outsourcing the management of this function to prevent financial loss.