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Will My Patient File for Bankruptcy?

The 7 Warning Signs of Patient Bankruptcy

Unfortunately, patients who file for bankruptcy don’t have a one-size-fits-all payment history.  Many are current on paying their debts, while others may be late-payers who have a history of paying off their debt.

One thing that is certain however, that a patient who has filed for bankruptcy may be one of your lower risks for future payment collection.

According to U.S. bankruptcy law, once a claimant has filed bankruptcy, they are prevented from filing again for eight years.  Additionally, once the bulwark of a patient’s debt has been addressed, they may be able to focus on current issues including medical bills.

Create a Proactive Collection Strategy

If you follow a proactive collection strategy for all of your patients, you can help reduce potential losses from patient bankruptcies.  It’s important for physicians and practice management to take a proactive stance in preventing their patients from falling behind in payments.  This includes frequent reviews of patient insurance plans so that your office knows in fact that the patient is still insured; and that coverage limits, deductibles and co-pays haven’t changed.

 Some Potential Warning Signs

Here are some of the warning signs that your patient may file bankruptcy:

1. Declined Credit Card – If the credit card is denied, the patient  may have reached their credit limit.

2. Check Problems – A patient’s checks return unpaid from the bank, or the patient asks if they can postdate them.

3. Changes in Method of Payment – Customers who pay their bills on the day of service may start making partial payments, or are late in making co-payments.

4. Late Payments – A patient suddenly falls behind on a scheduled payment plan or past due accounts.

5. Canceled Appointments – The patient cancels, or fails to show for, appointments. When called to reschedule, the patient may make excuses why they can’t come to the office.

6. Unanswered Phone Calls – Calls to the patient’s home are unanswered, or the caller is told the patient is not at home. Mail is returned to the office.

7. Disconnected Phone – The patient’s phone is disconnected.

Many physicians hire trusted and reputable collection agencies as a partner in the payment recovery process.  As a third-party collaborator, a collection agency has the staffing and experience to collect the maximum amount before a patient before a bankruptcy filing.  Hiring a collection agency in many cases will also help identify these warning signs and identify patients that may soon file or have already filed for personal bankruptcy protection.

Once a patient has filed for bankruptcy, all collection efforts must stop and an official proof of claim will need to be filed to recover assets.