Author Topic: A client who can't (or won't) pay  (Read 5594 times)

williamportor

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A client who can't (or won't) pay
« on: March 08, 2015, 10:27:53 AM »
Hello- I have a Chiropractor client that I've done billing for about 6 months. Things have been going smoothly until about 6 weeks ago when his monthly check stopped arriving. I called him and he apologized, and said he could not pay because his "numbers were down, and he could not afford it." He has agreed to take over his own billing for now, and said he would try to get the account paid in the next 60 days. He is now 45 days delinquent. Our contract states:

Westside will close its books for billing purposes on the last day of each
month, and will bill Client for it's services on the 5th business day of each month
for the previous months billing. The Client will pay Westside for it's services
upon receipt of Westside’s  invoice. If Client fails to submit payment within
30 business days of receipt of invoice, Client will be responsible for paying
Westside, in addition to the principal amount billed, a 1% per month late charge
for each month or any portion thereof payment of the billing is late.

My question is: How long should I carry this debt before taking action, such as sending it to a collector? Were only talking about $300.00, but I'm not sure what my policy should be regarding delinquent accounts. Any suggestions?
« Last Edit: March 08, 2015, 10:40:29 AM by williamportor »

kristin

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Re: A client who can't (or won't) pay
« Reply #1 on: March 08, 2015, 09:45:27 PM »
So at this point, he should have been charged the 1% late charge, but I doubt that will help him pay you faster. You could offer to take that fee off, if he pays you immediately, or you could offer him a payment plan, with the understanding that if he misses a payment, you will immediately turn his account over to a collection agency, or take him to court. Your contract really needs to spell out what happens to delinquent accounts, going forward. Sure, you have that late fee in the contract, but it also needs to specify what happens if a client goes past X months/days of non-payment. Only you can decide what X should be. Personally, I wouldn't let it be more than 60 days.


PMRNC

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Re: A client who can't (or won't) pay
« Reply #2 on: March 09, 2015, 11:34:47 PM »
Quote
Hello- I have a Chiropractor client that I've done billing for about 6 months. Things have been going smoothly until about 6 weeks ago when his monthly check stopped arriving. I called him and he apologized, and said he could not pay because his "numbers were down, and he could not afford it." He has agreed to take over his own billing for now, and said he would try to get the account paid in the next 60 days. He is now 45 days delinquent. Our contract states:

Westside will close its books for billing purposes on the last day of each
month, and will bill Client for it's services on the 5th business day of each month
for the previous months billing. The Client will pay Westside for it's services
upon receipt of Westside’s  invoice. If Client fails to submit payment within
30 business days of receipt of invoice, Client will be responsible for paying
Westside, in addition to the principal amount billed, a 1% per month late charge
for each month or any portion thereof payment of the billing is late.

My question is: How long should I carry this debt


I'm GUESSING you were charging on a %.. ? This is just one more reason I can't stand charging a %.. the whole BS concept "We don't get paid until you get paid" is so tired and abused.

With that said, I'd already say they breached.. I would go for small claims or send one final letter via certified mail/return receipt with the promise to attempt further collections (with FDCPA, you don't want to threaten actions you won't take so you keep it vague unless prepared to follow through with specific action.
Linda Walker
Practice Managers Resource & Networking Community
One Stop Resources, Education and Networking for Medical Billers
www.billerswebsite.com

williamportor

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Re: A client who can't (or won't) pay
« Reply #3 on: March 10, 2015, 09:26:03 AM »
I'm GUESSING you were charging on a %.. ? This is just one more reason I can't stand charging a %.. the whole BS concept "We don't get paid until you get paid" is so tired and abused.

Hello....I charge a flat monthly fee for my billing services, not a percentage. The 1% only applies to the late fee. Sorry for the confusion.


PMRNC

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Re: A client who can't (or won't) pay
« Reply #4 on: March 10, 2015, 12:02:30 PM »
Quote
.I charge a flat monthly fee for my billing services, not a percentage. The 1% only applies to the late fee. Sorry for the confusion.

That's good because the clock ticks at just that total amount (including the 1%)..
When he "agreed" he would take over his own billing did he notify you to terminate the contract in writing? Do you have terms in your contract about terminating contract with a specific means of notification (in writing, certified mail, etc)?  If so and he has not notified you properly you can indeed already consider the contract breached.   Is the amount low enough to go through your small claims but high enough to absorb the small costs of small claims?   When did the "next 60 days promise of payment begin?"


.
Quote
I called him and he apologized, and said he could not pay because his "numbers were down, and he could not afford it." He has agreed to take over his own billing for now, and said he would try to get the account paid in the next 60 days. He is now 45 days delinquent. Our contract states:

Westside will close its books for billing purposes on the last day of each
month, and will bill Client for it's services on the 5th business day of each month
for the previous months billing. The Client will pay Westside for it's services
upon receipt of Westside’s  invoice. If Client fails to submit payment within
30 business days of receipt of invoice, Client will be responsible for paying
Westside, in addition to the principal amount billed, a 1% per month late charge
for each month or any portion thereof payment of the billing is late.

My question is: How long should I carry this debt
Linda Walker
Practice Managers Resource & Networking Community
One Stop Resources, Education and Networking for Medical Billers
www.billerswebsite.com

Medical Billing Forum

Re: A client who can't (or won't) pay
« Reply #4 on: March 10, 2015, 12:02:30 PM »

williamportor

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Re: A client who can't (or won't) pay
« Reply #5 on: March 10, 2015, 02:47:59 PM »
That's good because the clock ticks at just that total amount (including the 1%)..
When he "agreed" he would take over his own billing did he notify you to terminate the contract in writing? Do you have terms in your contract about terminating contract with a specific means of notification (in writing, certified mail, etc)?  If so and he has not notified you properly you can indeed already consider the contract breached.   Is the amount low enough to go through your small claims but high enough to absorb the small costs of small claims?   When did the "next 60 days promise of payment begin?"

The 60 day "promise" was just a suggestion (made by me). My contract states either party can terminate the contract provided 14 days written notice ( via e mail or snail mail) is given. Yes, I can take this man to small claims court, but  I'm hesitant to take legal action at this point for 3 reasons:

1. He does not have the money, and no amount of legal paper shuffling will get me paid.

2. He is in California, and I am in Washington State. This will no doubt complicate the legal process. Taking several (if not many) hours out of my work day to chase after a $300.00 fee might not be in my best interest.

3. He's been a good client in the past, it's possible we may be able to restructure the contract, which includes a lower workload for me and lower fee for him. He has stayed in contact with me, and has been somewhat receptive to this idea.

I was just looking for ideas in case he did not pay me at all.
 
« Last Edit: March 10, 2015, 02:53:47 PM by williamportor »

PMRNC

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Re: A client who can't (or won't) pay
« Reply #6 on: March 10, 2015, 06:31:07 PM »
Well your asking two different questions then.. "how long can you continue this debt legally" and "how long should I carry this debt". the answer is in your contract, it just might be that your trying to give the provider the benefit of the doubt. If your contract stated that LEGAL and written notice to terminate said contract existed.your client is already in breach. At this point I think you are wanting to end things amicably but within legal rights.. correct?   Again, I have to say you alredy have  breach.. how you proceed now becomes how you WANT to proceed. Remember also that it could set precedence for future clients.
Linda Walker
Practice Managers Resource & Networking Community
One Stop Resources, Education and Networking for Medical Billers
www.billerswebsite.com

kristin

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Re: A client who can't (or won't) pay
« Reply #7 on: March 10, 2015, 10:56:15 PM »
Quote
The 60 day "promise" was just a suggestion (made by me). My contract states either party can terminate the contract provided 14 days written notice ( via e mail or snail mail) is given. Yes, I can take this man to small claims court, but  I'm hesitant to take legal action at this point for 3 reasons:

1. He does not have the money, and no amount of legal paper shuffling will get me paid.

2. He is in California, and I am in Washington State. This will no doubt complicate the legal process. Taking several (if not many) hours out of my work day to chase after a $300.00 fee might not be in my best interest.

3. He's been a good client in the past, it's possible we may be able to restructure the contract, which includes a lower workload for me and lower fee for him. He has stayed in contact with me, and has been somewhat receptive to this idea.

I was just looking for ideas in case he did not pay me at all.

I think you have been given some ideas about what to add to your future contracts with providers, if this should happen again, so let's focus on this particular one, and what to do, based on what you said above. I can understand based on #1 and #2 why you wouldn't pursue small claims court. It certainly seems like a situation where you "can't get blood from a stone", as the saying goes. If he doesn't have the money, he doesn't have the money. Right now, that is. He could be able to pay it at a later date. If he is dealing with trying to pay other bills like rent just keep his doors open, the last thing he would be worried about is paying you, seeing as how he took over the billing himself.

So that leaves your #3 option. Is the client worth you keeping him on at a restructured rate? $300 a month as a flat fee as it stands right now seems really low, unless all you are doing for him is very basic stuff, at a very low volume. But I don't know what all you do for that fee. Have you divided the hours you spend working on his account by what you charge him, to see what your hourly rate comes out to be? My guess is that it may be less than minimum wage, which means he is already getting a cut rate for your services, and to further cut that rate would mean you would be doing almost nothing for him, so you get a fair wage for what you do. Does that make sense? Unless he is able to pay you a fair wage, and better yet, get you more clients via referral, I think you are getting the very short end of the stick, and should walk away.





williamportor

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Re: A client who can't (or won't) pay
« Reply #8 on: March 12, 2015, 11:52:12 PM »
Well your asking two different questions then.. "how long can you continue this debt legally" and "how long should I carry this debt". the answer is in your contract, it just might be that your trying to give the provider the benefit of the doubt. If your contract stated that LEGAL and written notice to terminate said contract existed.your client is already in breach. At this point I think you are wanting to end things amicably but within legal rights.. correct?   Again, I have to say you already have  breach.. how you proceed now becomes how you WANT to proceed. Remember also that it could set precedence for future clients.

OK...It's pretty clear that I need to insert more specific language in to the agreement regarding delinquent accounts. This situation took me by suprise. Thank You for the input everyone.

RichardP

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Re: A client who can't (or won't) pay
« Reply #9 on: March 13, 2015, 04:50:41 AM »
williamporter - whereabouts in Washington State?  Just curious, if you can share.

Medical Billing Forum

Re: A client who can't (or won't) pay
« Reply #9 on: March 13, 2015, 04:50:41 AM »

williamportor

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Re: A client who can't (or won't) pay
« Reply #10 on: March 18, 2015, 10:15:31 PM »
Richard - I live about 30 miles west of Seattle in Port Orchard

RichardP

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Re: A client who can't (or won't) pay
« Reply #11 on: March 24, 2015, 04:33:01 AM »
Thanks William.  Parents in Tacoma.  Brother in Port Angeles.  Grew up north of Everett.  I'm in Los Angeles.

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Re: A client who can't (or won't) pay
« Reply #11 on: March 24, 2015, 04:33:01 AM »