Optometric Management Tip # 260   -   Wednesday, January 10, 2007
Reviewing Your Payment Policy

As the eye care professions increasingly rely on billing third party insurance for goods and services, staff members can gradually lose their skills in presenting and collecting fees directly from patients. Office policies can evolve over time to reflect an approach that feels easier to staff. It’s important to review your payment policy occasionally and make changes if it is lax. I have found that changes can be implemented immediately that will benefit the cash flow of the practice and cause no ill effects with patients at all.

Design your policy

Some practitioners require payment in full before an optical or contact lens order is placed. I think that’s great and I applaud it, but I still feel that the tried and true 50% down payment at the time of the order with the balance due on delivery is acceptable. It makes things a bit easier for the patient’s bank account and does not really cost the practice much. In practice, if we simply state the total charges at the first visit, many patients simply pay the entire amount anyway.

My practice policy is as follows: all professional services must be paid for at the time of the visit, unless an approved insurance plan with pre-verified benefits exists. All optical materials must have at least a 50% deposit before any materials are ordered. If the 50% is not available, the order will be held until the deposit is paid, and then the order will be started.

No credit offered

I see many practices that have much more lenient policies than those above and I advise them to change. I see no reason to allow optical materials to leave the office if they are not paid for. And if you don’t get at least 50% down, a patient may never return to pick up eyeglasses or contacts, and the practice would incur the cost of the materials. Besides that, posting the down payments improves cash flow significantly.

In my view, the only credit program that needs to be offered is the acceptance of major credit cards. Every practice should do that. Today, nearly every adult in every part of the country can obtain a major credit card or debit card and if he can’t arrange that, then he is a bad credit risk that your practice should avoid financing anyway. In today’s marketplace, consumers are very used to such policies and your practice is not presenting any hardship by implementing it.

Changing a lenient policy

The payment policy should be very simple, and the whole office should immediately adopt it and enforce it. While we care strongly about patients’ wants and needs, billing and collecting is an area where the needs of the business must come first and no exceptions can be granted. We will be flexible in exchanging products, remaking materials or even refunding fees if patient satisfaction was not met, but we can’t make any exception in the area of charging fees or collecting them.

This may seem like it will be cold or difficult if your practice has offered payment plans for a long time, but it isn’t. Simply act like it is out of your hands and there are no decisions to make. It is not personal. If a patient who has had credit in the past asks about credit, acknowledge that they have always been a good patient, but the cost of providing credit became too much for the practice to bear and the policy must be applied to everyone equally. Teach staff members to not check with the doctor if the policies are challenged, but to advise the patient that the policy is the same for everyone.

Exceptions and awkward situations?

What do you do about the patient who comes in to pick up glasses, you have them all adjusted and when you ask for the balance he says he forgot his checkbook and he’ll drop it in the mail as he walks toward the door. This is often a high-powered, well-dressed businessman or woman whom the average staff member would have a difficult time confronting. What should your optician do… ask him to give the glasses back? Yes. That is exactly what I would do, although I would ease the situation by apologizing for not explaining the policy better in advance. In reality, I’d be certain that someone on our staff actually told this patient that the balance would be due at dispensing, because we are 100% with that point, but the apology goes a long way to allowing him to save face. And I want to do that.

By taking the blame for the misunderstanding, and acting like it is perfectly understandable that the patient might not know, I save him embarrassment and diffuse defensive anger. We do stick to the policy, however, and we act like there simply are no exceptions. If he doesn’t have a major credit card, we’ll be happy to hold the glasses until he can stop back with a check. At this point, the patient will want to avoid embarrassment and will generally be understanding. (After all – why would such a high-powered person not have a credit card with enough room on the credit line to finance the glasses?) By the way, this type of person is highly likely to be a collection problem if allowed to leave with the materials, so you must stand up to him.

A similar case is presented when a parent sends a teenager in alone to pick up materials that have a balance due. It seems likely that the parent is purposely trying to avoid payment, but we handle the situation the same as the one above. We apologize profusely as we take back the contacts or glasses and ask the child to have his parent come in or call us.

Contact lens orders by phone

Ordering contact lenses over the phone can present a unique challenge because the call is generally from an established patient who has a good payment record with your office. The Rx is still current; the patient just needs more lenses and is probably in a bit of a hurry to get them. Do you need to insist on payment? Well, it is pretty easy to get a credit card number over the phone from most patients, but in the interest of patient goodwill and competing for sales of replacement contact lenses, our policy is to only require a down payment if the lenses are custom ordered and non-returnable.

Patients with vision plans

Of course, any charges that are covered by an insurance plan or vision plan with confirmed benefits are treated as if they are paid. These fees are transferred off the patient’s account and onto the third party account. Patients generally have some amount that is not covered by insurance and we apply our usual payment policy to that portion. In other words, any co-payments or non-covered services are due on the day of service and at least 50% of the patient’s portion on materials is needed to place an order. Balances must be paid in full at dispensing. Some doctors use the insurance benefit as the down payment on the total order, but we have seen some major charge-backs on our vision plan statement for lens options, and if the patient never returns, we would incur that cost.


Best wishes for continued success,

Neil B. Gailmard, OD, MBA, FAAO
Chief Optometric Editor, Optometric Management