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May 2012

Bad Check Protocol

Bounced checks can be a problem for a medical practice. Fortunately, many tend to be for relatively small dollar amounts. However, many small sums can add up and impact your bottom line. What can your practice do to limit the problem?

Establish a Written Policy

One approach is to ask all patients to pay using cash, debit or credit cards, money orders or certified checks. Note your practice’s refusal to accept personal checks in communications with patients and on signs in your waiting rooms.

If you decide to continue accepting checks, consider using a check scanning system from a company that guarantees every check it clears. Most credit card processing companies offer check service programs for a fee. Another approach is to call the issuing bank directly to verify the check. The bank will ask you how much the check is for and will verify if the account has adequate funds to cover it. If it does, you can present the check in person at the bank. Bear in mind that there may be other outstanding checks associated with that account not yet presented for payment.

When Checks Bounce

You can take several steps to obtain payment if a check from a patient bounces. Start with a phone call requesting payment. If that call has no effect, send the patient a copy of the bounced check (always keep the original) and request payment along with any bounced-check fees. Many patients will try to make payment. The letter should include your name, the patient’s name, the amount of the payment due and the services performed. Just be sure that any calls and letters from your practice adhere to the rules for contacting clients contained in the Fair Debt Collections Practices Act. If you receive no response and you don’t want to write off the debt, you can turn it over to a collection agency.

Health Care Commentaries is provided by Somerset’s Health Care Team for our clients and other interested persons upon request. Since technical information is presented in generalized fashion, no final conclusion on these topics should be made without further review. For additional information on the issues discussed, please contact a member of our This email address is being protected from spambots. You need JavaScript enabled to view it. . This document is not intended or written to be used, and cannot be used, for the purpose of avoiding tax penalties that may be imposed on the taxpayer.

Somerset CPAs, P.C.
3925 River Crossing Parkway, Third Floor
Indianapolis, Indiana 46240
317.472.2200 • 800.469.7206 • FAX 317.208.1200
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