Collections etiquette: How far should doctors go?

With hospitals in the hot seat for aggressive collections, now is a good time for physicians to review how they deal with unpaid patient bills.

By Katherine Vogt, AMNews staff. Sept. 27, 2004.

Some stories about debt collection resonate like well-spun Hollywood scripts. The victims are everyday people who are arrested, forced into bankruptcy or thrown out of their homes because they couldn't afford to pay their bills for life-saving medical care. The villains are hospitals or physicians who hungrily pursue every dime they are owed.

Those familiar with patient bill collections know that this kind of drama is an exaggeration of what typically occurs when patients don't pay what they owe. They also understand that collection drama happens more commonly because physicians and hospitals must balance their need to recoup financial losses with their missions to treat patients charitably and engage in fair business practices. It can be a delicate line.

With scores of recent lawsuits accusing hospitals of overstepping that line by aggressively pursuing outstanding patient bills, some physicians and hospitals are re-examining their debt collection practices to ensure that they stay on the good side of consumer watchdogs.

Consultants and other observers say that while physicians won't likely face the same kind of legal action that has put hospitals in the hot seat, the lawsuits serve as a wake-up call that physicians should put policies in place that clearly define their collection practices, as many hospitals are now doing.

They recommend that the policies define the collection process from the time of patient preregistration and intake to when final delinquent payment notices are sent or when a collection agency becomes involved. Such detailed policies could help physicians deal with what can be a very sensitive issue.