Small Balances: What to Do

There are a lot of mixed opinions about what a medical office should do to resolve small patient balances.  

  • Should small balances be pursued?
  • Should small balances be adjusted off?
  • Should small balances be outsourced?
  • What amount constitutes a small balance?
  • Should credit balances be adjusted off?

Depending on the amount of resources your medical office has can be very influential on how you choose to resolve small patient balances.  No medical office has resources to waste on stamps, billing statements, or human resources for accounts that will not significantly contribute to cash flow especially when pursuing payment will cost equal to or more than the amount owed.

If you are unsure about how to handle small balances here are two suggestions for:

  1. How to handle small balances owed by the patient
  2. How to handle small balances owed to the patient

1
Small Balances Owed by the Patient

Medical centre reception
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In order to maximize your collection efforts, the medical office must be aggressive in pursuing balances even from small patient past due balances. Some experts would argue that the medical office shouldn't even waste time or resources pursuing anything less than $9.99, give or take a few dollars.  

Some experts would argue that "pennies make dollars". I agree with both arguments. However, under a certain dollar amount, pursuing payment would mean paying out more in resources than is due from the patient. 

Small balances are generally written off because it may not be worth the costs of trying to collect it. It is important to have a small balance write off policy. The policy needs to include the amounts and how far past due the accounts must be to be eligible for the write-off.

One important thing to consider is that write off accounts can still be collected on as long as it is posted to the account and the write-off is reversed.

Collecting small balances does not require that money and time be spent mailing out bills and placing collection calls. One simple way to collect money on small balances is to have the front office staff and the appointment setters check patients previous balances. This way the patient can be reminded of their outstanding balance while they are in the office or on the phone.

Reminding patients that they have a $5.00 or $10.00 balance will help improve collections while clearing up past due accounts.

2
Small Balances Owed to the Patient

Nurse talking to patient in office
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Just like, small balances owed by the patient, small balances owed to the patient should also be examined to determine whether it makes more sense to adjust them off. 

As far as I'm concerned, if we expect the patients to pay the medical office what they owe, it is only right to do the same.  However, there should be some guidelines in order for the medical office to efficiently utilize its resources.

Several suggestions for handling small balances owed to the patient include:

  • If applicable, transfer overpayments to other open accounts to help satisfy existing patient balances.
  • Determine a minimum dollar amount for credit balances to be in order for a refund to be issued. 
  • Consider how patient requests for a refund will be handled for small credit balances.Will your medical office honor their request or will your medical office explain the small balance policy regarding overpayments.
  • For small credit balances that remain on the patient account for over one year, they should be issued to the patient.  This should also be the guideline for a patient that is no longer a patient due to choosing another physician, relocating, or getting dismissed as a patient.

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