Fam Pract Manag. 2000 Feb;7(2):52.

Collecting late payments


If a patient pays a minimal amount on a large bill, can we threaten collections? Also, can we charge interest or impose late fees on overdue bills?


You may send a patient's past-due account to a collection agency and/or impose service or interest charges if he or she is not in compliance with the payment arrangements to which you and the patient have previously agreed.

The key is to explain to the patient at the beginning of your relationship what is expected financially and what the consequences (i.e., service or interest charges) may be if he or she fails to meet the agreed-upon expectations. This strategy generally increases collections and may actually reduce collection costs in the long run. This is best done with a written financial policy that must be signed by the patient and filed in his or her medical record or in a separate filing system for these policies.

Typically, patients should be expected to pay their share of the fee at the time of service. However, you may allow patients to pay large balances in installments. For special arrangements involving more than two installment payments, the written financial policy should include the information required by the truth-in-lending regulations as well as an explanation of the required service charges.

Although you can impose service charges or interest charges on late payments, service charges (monthly billing fees) may be easier to handle since they don't require the periodic notification to patients that interest charges do.

Service charges should increase with the size of the unpaid balance. For example, a $5 fee might be imposed on balances of less than $100, a $10 fee on balances between $100 and $250, and a $25 fee on balances in excess of $250.

If the patient fails to make full payment and you decide to turn the account over to a collection agency, you are required by law to notify the patient first.

Increasing productivity with labor?


I'm a salaried family physician in a hospital-owned practice. The hospital employs one manager who oversees 10 clinics. In addition to the manager, our practice has a receptionist and a clinic assistant who serves as our medical assistant (MA). We've been averaging 20-25 patients per day. I think we can see more patients if I can convince the manager to hire an additional MA. Is this reasonable?


Adding labor is actually the most expensive way to increase productivity.

For example, let's look at the costs of your proposal. An additional MA, earning $10 per hour and working eight hours per day, with a typical benefits package valued at about $2.30 per hour and a 5-percent cost of administering the MA's payroll, benefits, etc., would cost $103.32 daily.

An increase of three patient visits per day (bringing the total to 28 patient visits per day, a reasonable volume based on AMA and Medical Group Management Association statistics), with an average office visit charge of about $80 and a 75-percent collection rate, would increase collections about $180 per day. From this, subtract nonlabor variable overhead of about 20 percent and the cost of an MA, leaving a profit of $40.68 per day. If you were able to see these additional three patients per day through better efficiency and work patterns without the new MA, the profit would be about $144 per day.

There are many ways, other than adding labor, to increase office efficiency, productivity and patient flow. You might consider the number of exam rooms you have, how they are laid out, which scheduling protocols you use, how you use your MA, the types of patients you see and your own behavior in the exam room. Unless you see a disproportionate number of geriatric patients, you should be able to comfortably see 28 patients per day with one MA if you have at least three exam rooms.

Discounting services for staff


The hospital I have privileges with also owns my clinic. It has always given its doctors a professional discount of about 20 percent on services but has recently notified us that this is being discontinued because of liability issues. Are there some legitimate legal concerns? I don't think I should be paying full price for services at the hospital I work for.


Yes, there are legal concerns. The anti-kickback statute prohibits an entity from giving something of value, such as discounts on services in this case, to induce referrals.

Employed physicians and physicians who are independent staff make referrals. If a hospital discounts its services to the physicians, it could be seen as an inducement to refer.

Denotes member of FP Assist, the AAFP's online clearinghouse for consultants and attorneys.


Copyright © 2000 by the American Academy of Family Physicians.
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