Collections Workflow

Disclaimer: This is only a suggested workflow that provides sample correspondence. WebPT and Therabill are not responsible for any payments not successfully collected.

Through years of experience in managing account receivables for therapy practices across the country, we have developed this suggested workflow for collecting past due client balances and sending the client’s account to collections.

Important: This workflow is extremely involved and complicated. However, this complexity allows for the most accurate and detailed reporting.

1. Friendly Reminder Call: If a client has been sent two consecutive statements and has not made a payment, or made payment arrangements, you should attempt to contact the client via phone. Verify that they have received the statements and are aware of the balance.
2. Past Due Letter: If you are unable to reach the client directly, leave a voicemail and send a letter stating that payment is past due. Remember, you cannot leave information regarding the collection on the voicemail; you can request that the patient return your call. Here is a sample Past Due Letter.
3. Delinquency Notice: After the third statement, if a client has not provided payment or made payment arrangements, they should be sent a letter stating that their account is about to be sent to collections. Here is a sample Delinquency Notice.
4. Collections: After the fourth statement, if a client has not provided payment or made payment arrangements, their account should be turned over to a collections agency. Clients should not be mailed any further statements once their account has been turned over. Additionally, it is important that the account is labeled and removed from your monthly A/R.

If the client pays off their balance or makes other payment arrangements at any point during this workflow, the process starts over. If a client has a large balance, we encourage that they try to resolve the balance in three monthly payments.

Label Accounts in Collection

We recommend that you use the Client Identifier field to label accounts that are going through this workflow. The label they should be assigned depends on which step you’ve completed in the workflow.

To label a client’s chart:

1. Navigate to Clients > Client List.
2. Locate the desired client and edit the chart using the blue edit pencil icon.
3. Enter up to 4 characters into the Identifier field.      
4. Select one of the Save options.

Note: This field is only used internally and will not show up on balance statements or insurance claims.

Exclude from Batch Billing

This process will prevent balance statements from being created for the client accounts that you have sent to collections.

1. Navigate to the client’s chart using your preferred method.
2. Underneath the client’s name, check the Exclude patient from batch billing checkbox.       
3. Click Save & Close to apply the changes.

Remove Balance from Monthly A/R

Client balances that have been sent to collections should be removed from your working A/R so the system displays more accurate numbers. Don’t worry, those accounts and balances will still be visible on a custom payment report.

Create Payment Class

To remove a balance from the A/R, you must first create a special Payment Class.

1. Navigate to Payments > Classes.
2. Select Add Payment Class.
3. Enter a unique 2-6 character Code for the class.                                                      
4. Optionally, you can enter an Internal Description.                      
5. Click Save Payment Class.

Optionally, you can create additional classes that can be used when removing a client/session from collections. They can be used to designate the amount paid by the agency and the amount that the agency was unable to collect from the client. These classes will provide great insight when running custom reports. Although not pictured below, you can create a class (i.e CARF) to represent any collection agency recovery fees that your clinic charged on each client. While you can use this class in Therabill, it is recommended that you only post the fees in your accounting software.

Apply Payment Class

To remove a session from your working A/R, you will need to adjust off the remaining balance using the newly created Payment Class.

1. Locate the desired session and open the Single Session payment screen.
2. Use the Type drop-down and click Client.
3. Then, open the Pmt Class drop-down and select the new Payment Class you created.       
4. In the Payment & Adjustment Entry section, enter the remaining balance for each line into its respective New Adj field.
5. Next, choose the appropriate Action. Most sessions will already be set as Patient Due, so you would select Keep current session status. Otherwise, you can select Close Session/Patient Due or Bill remainder to client.
6. Click Submit to post the adjustment(s).
7. Make note of the Date of Service and the adjustment amount.
8. Repeat Steps 1-7 for all sessions being sent to collections.

Notate Client’s Account

Once a client has been placed into collections and their balance removed from your working A/R, you will need to notate their account.

1. Navigate to Clients > Client List.
2. Locate the desired client, click the Client Notes icon, and select Enter Client Note.
3. Enter any relevant information regarding the collection, as sampled below.       
4. Click Save & Done.

Remove Sessions From Collections

Once a client has successfully paid their collection amount, your clinic will be notified and paid according to your contract with the agency.  You will then need to remove the client from collections and post the payments.

Note: The collection agency may remit the entire collected amount to your clinic and then invoice you with their fees separately.

Reverse Adjustment

1. Locate the desired session and open the Single Session payment screen.
2. Use the Type drop-down and click Client.
3. Then, open the Pmt Class drop-down and select the collection Payment Class you created.       
4. In the Payment & Adjustment Entry section, enter the amount the was previously adjusted for each line as a negative into its respective New Adj field. Use the Payment History box on the left for reference.                                  
5. Next, select Keep current session status as the Action.
6. Click Submit to post the reversal of adjustment(s).

Post Collected Amount

Note: Depending on your preference, you can post the entire amount collected prior to the agency’s service fee or only post the actual amount your clinic is paid for each client/service. If you choose the latter, post the fee paid to the agency using your designated payment class (i.e. CARF).

1. Still using Single Session, the amount collected by the agency will be posted as a Client payment.
2. If you created an additional Payment Class for this, use it here.         
3. Enter the amount the agency collected for each line in the New Pmt field. For lump-sum payments, you will start by posting payments on the oldest Date(s) of Service first.        
4. Next, select Keep current session status as the Action.
5. Click Submit to post the payment.

Adjust Remaining Balance

If the agency was unable to collect the full amount, you will need to adjust off the remaining balance.

1. Still using Single Session, the adjustment will be posted as a Client adjustment.
2. If you created an additional Payment Class for this, use it here.       
3. Enter the remaining balance for each line in the New Adj field.      
4. Next, select Keep current session status as the Action.
5. Click Submit to post the adjustment.

Remove Collections Label and Include in Batch Billing

When the client has been removed from collections, you will need to remove the collections label and remove the batch billing restriction.

1. Navigate to Clients > Client List.
2. Locate the desired client and edit the chart using the blue edit pencil icon.
3. Remove the label from the Identifier field.
4. Uncheck the Exclude patient from batch billing checkbox.        
5. Select one of the Save options.

Reporting

Use reports to keep track of balances that were sent to collections, the amount that the agency was able to collect, and any remaining balances that have been deemed as uncollectible.

1. Create a Custom Payment Report layout with at least the columns seen below.       
2. Select the desired layout.
3. Optionally, enter a Payment Class into the Pmt class field.
4. If you are running a report to determine the amount the collection agency paid, make sure to uncheck Client Payments.      
5. Either remove the default Post Date Range or enter your own date range.
6. Optionally, you can group the report. Our suggested selections are seen below.        
7. Click View Report.

Example

Let’s look at an example of a single DOS with a single CPT code.

• The two WO-COL entries show the original adjustment amount ($2.50) and the negative adjustment ($2.50) that was applied when we received the payment from the agency.
• The PBCA entry shows what the agency was able to collect ($2.00) from the client.
• In this example, we posted the entire amount that was collected prior to the agency’s service fee.
• The WO-UNC equals the remaining balance ($0.50) that the agency deemed uncollectible.

Important: Notice that the total Pmt Amount for the service line shows $2.50. This is obviously not how much was collected. To determine the actual amount paid by the collection agency, you will re-run the report by adding PBCA (or whatever you labeled the class as) to the Pmt Class filter box.

If you pay your billers based on the amount charged/collected, you can simply exclude any payment amount with the PBCA class as those were not collected by the biller.

Accounting Software Reconciliation

If you follow the entire workflow as outlined above, it may appear as if your books are not balancing with your bank deposits when the agency takes their cut before remitting the collected amount. No need to worry!

Operating expenses are not and should not be recorded in Therabill. While only $70 was received by the clinic, it will be listed in Therabill as the original $100. In your accounting software, we recommend that you post the amount that was collected prior to the recovery fee and then create a separate entry in the amount of the agency’s fee.