Adopt a sound process for handling bad checks

In a tough economy, your practice may be dealing with a higher-than-usual amount of bad checks, each of which costs precious time and money, and, if dealt with poorly, can strain relationships with patients.

Therefore, if your practice accepts personal checks, it's essential that you adopt a written non-sufficient funds (NSF) check protocol to ensure that staff can efficiently process the check and collect the money owed in a businesslike manner, according to Manage My Practice blogger Mary Pat Whaley.

Before developing your policy, be sure to contact your bank, as well as any third-party collection agencies you use, to determine their policies and related fees for processing or returning bad checks. Also research NSF check laws in your state to determine what you can legally require of patients.

Once this homework is complete, determine what fee you will charge patients for returned checks. You may charge exactly what the bank charges you, or you may charge an additional fee for the work it takes your staff to collect the NSF check, Whaley says. Next, notify patients of this penalty by posting signs at check-in or check-out.

In the event that you do receive a bad check from a patient, post the adjustment to the patient's account showing the returned check amount, with the returned-check fee posted as a charge. If phone calls asking the patient to pay these amounts via cash or money order fail, consider requesting the money by certified letter (Whaley includes a sample).

To keep the problem from recurring with the same patient, Whaley suggests placing a pop-up alert in your computer system so staff know to only accept cash or money orders from the patient going forward. If you decide to dismiss patients who fail to satisfy a bad check, be sure to provide the required 30 days' notice of emergency-only care.

To learn more:
- read the post on Manage My Practice

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