It is no secret that outstanding medical bills make up a large portion of the debt that many people across the country are struggling with.
It’s also no secret that plastic surgery is a very common expense out here in Southern California.
One thing that isn’t quite so commonly known is that people who are having plastic surgery procedures done in and around Los Angeles are often doing so on credit, which leaves many local offices struggling to manage their accounts receivable.
The first step to improving any type of debt collection procedure is to have a set policy in place. So whether you are working in a plastic surgery office or attempting to collect on their behalf, applying these principles to your collection strategy should help you improve your results dramatically in a short amount of time.
1. Get Legitimate Deposits
Before we dive into things that plastic surgery offices can do to recover outstanding debts from clients, we should first point out that protecting yourself against downside risk before performing any type of service is always a good idea. Therefore, any kind of deposit that you are able to get before performing a procedure will reduce the maximum amount you can get stuck for after the fact.
Large deposits can also act as qualifiers that require your clients to prove that they are able to come up with at least a portion of the money for the required procedure. If they are unable to do so, then you can expect them to have the same issue when the bill is due if you perform the procedure on credit.
2. Keep Accurate Records
We always recommend that any type of collection effort should include as many details about the account as possible, but that isn’t always possible in the medical field. In most cases, the law actually forbids doctors from passing along information about a given procedure if they hire an outside firm to handle their collection efforts.
That means that any debt recovery agency attempting to collect for plastic surgery procedures won’t have any information outside of the basic accounting info like the name, address, and the amount owed.
However, any details about the collection procedure like times the client was contacted and promises that may have been made should absolutely be documented by whoever is handling the account.
It might not be possible to provide a debt collector with details about the services rendered, but any aspect on the accounting side should be able to be shared, and keeping detailed notes about the agreement will always be a huge help if the case should reach the point where legal action is required.
3. Report the Debt
One of the most useful collection tactics that we have found for plastic surgery clients is to politely explain that an account in delinquent status will need to be reported to the credit rating agencies.
The thought of having a blemish on their credit report is often enough motivation to get a client onto some type of payment plan, and can even convince some people to borrow the money from acquaintances to settle the debt.
Of course, your threat to report a delinquent account cannot be an empty one. Should someone commit to a payment plan and then default on the agreement, you absolutely must be willing to follow through with your end and report the delinquent account to the major credit rating agencies.
4. Offer to Retract Reporting
Once you make the step of reporting a delinquent account to the credit rating agencies, the next tactic you can use with a debtor is offering to retract the report when they fully settle the debt.
In many cases, once a client sees their credit score drop on account of a new collection on their report, they are willing to work extremely hard to get that removed from their record.
Depending on how much is owed and how you view your chances of recovering the full amount, you might also want to consider offering a bit of a discount as an additional incentive.
For example, if a former client owes something like $20,000 for a procedure, combining a $5,000 discount with the offer to remove the collection from their credit report can be an excellent motivation to settle the account sooner, rather than later.
5. Pursue Legal Action
As with any type of outstanding debt collection, the last step when all else fails is to pursue legal action. In cases where clients aren’t motivated by blemishes on their credit reports, obtaining a formal judgment against them is often the only way to motivate them to even consider working with you on some type of payment plan.
Heading to court over a delinquent account is a step that many people collecting on their own are not willing to take, but partnering with an experienced collection agency can offer a tremendous amount of benefits in these cases. This is also an area where you will benefit from the detailed record keeping that we previously discussed.
After a judgment is obtained against a debtor for failing to make payment on a service, the creditor will typically be given the option to garnish the debtor’s wages. And while this isn’t going to get the creditor the full lump sum that they are owed immediately, it can at least offer some progress towards eventually recouping all of the money owed.
Debt collection can be challenging in any environment, but it is especially tricky when dealing with plastic surgery bills. Because of the added documentation regulations for medical bills and the extra consumer protections here in California, this can be one of the most difficult types of collections you will find.
And when we are dealing with difficult collection situations, it is always better to have experience in your corner, which is exactly what Direct Recovery can offer its clients. Partnering with a collection agency before you find yourself needing one is the best way to prevent that type of situation in the future, so set up an appointment to talk with one of our specialists today!
