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Medical practice collection letters that work: 7 ways to improve your letters, plus free templates

Get the most out of your medical collection letters and improve revenue streams with these expert tips

Man sending collections letter to patient on computer

At a Glance

  • Learn how to reevaluate your practice’s approach to collecting unpaid bills. Threatening letters may not be the most effective method. Instead, understand the reasons behind nonpayment, ranging from misunderstanding the bill to intentional avoidance.
  • Strategies for improving collection efforts include gentle reminders, text messaging, offering assistance with payment plans, avoiding aggressive language in letters, and making phone calls to discuss the bill.
  • These methods are designed to maintain good relationships with patients while increasing payment likelihood.

Forget the threatening collection letters you’ve been sending to delinquent payers. While scary communications might work in some industries, they often seem insensitive when coming from a medical practice — and you could lose patients. 

Use these 7 guidelines to tweak your A/R communications — and improve your revenue stream quickly.

1. Get to the root of the problem

Brandon Betancourt, a practice administrator at Pediatric Inc. in Chicago, believes that there are 4 main types of medical bill nonpayers. They are those who:

  1. Don't understand the bill
  2. Missed the bill or forgot to pay
  3. Can’t afford to pay for the entire bill 
  4. Never planned to pay in the first place

Go through your collections list and see if you can sort patients into each of the 4 categories. 

You can ask practitioners for insights. Often the attending physician or nurse can help. 

If the patient moved, do you have the new address on file? 

Are they going through financial difficulties? 

Could other factors, like a change in medication, be making them confused?

Betancourt recommends treating payers in groups 1, 2, and 3 differently than those in group 4 (those who never planned to pay in the first place). 

In other words, people who most likely have a legitimate excuse for nonpayment get a softer touch.

2. Reach out – gently

Regardless of nonpayers’ motivation, your first step is to send a reminder. 

“The objective is to simply make the patient aware that the bill is overdue. No threats, no intimidation,” Betancourt advises. “You might acknowledge that the bill could be difficult to understand. You can invite questions and phone calls. But you definitely should not adopt a stern or punitive tone at this point.”

3. Try texting

Practices increasingly use text messaging to inform patients about invoices — and are often receiving immediate payment. 

Texts are a noninvasive form of communication compared to phone calls. Texts have a much higher rate of getting through than snail mail, since cell phone numbers are usually kept updated. 

Also, most people read texts as soon as they come in. One study showed 95% of text messages are read and responded to within the first few minutes of being received.

Depending on your electronic health record (EHR), texts can be automatically generated and patients can pay via credit card with a single click on their phone.

You can also add a phone number to text messages so that patients can contact you quickly and easily. When they call, this is your opportunity to discuss their reasons for not paying.

4. Ask how you can help

Offering to assist patients with payment plans shows that you assume the best and genuinely care about them. It demonstrates that their health and well-being come before money — essential for good patient relations. 

By simply asking “How can we help?,” you may receive a request for a few more weeks grace period, a discount, or help with insurers.

When handled sensitively, a billing conversation can even build patient loyalty. 

Keep in mind that patients are often under a lot of stress during a medical crisis and may need more empathy than the general population.

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5. Ditch the nasty letters

“Collection letters that go out to patients usually have very stern language,” says Betancourt. 

A letter may mention that unless the patient sends payment in immediately, they will leave the practice with no choice but to send them to a collections agency. Typical phrases include “final warning,” “3rd and final attempt,” or “delinquent” in bold letters or all caps. 

When Betancourt used a typical delinquency letter, his payment rate was only about 5%. He switched to a softer tone with reminder letters — and his response rate soared to between 30 and 40%. ”

Letters like these are a not-so-subtle attempt to intimidate the debtor into paying. 

“The problem is that they assume the debtor is trying to blow the practice off,” says Betancourt. With most non-payers, this is not the case. Most patients have a valid reason for not paying. So, they are justifiably offended by heavy-handed language.”

He also finds that intimidating letters just don’t work. 

“They may scare a few people. But if the patient is a seasoned debtor, meaning someone who is accustomed to carrying a lot of debt, their response is usually, ‘So, you’re going to send me to collections? Get in line!’ Instead of getting a check, you get apathy.”

The other common response to threatening letters is even worse — anger. 

“Nobody likes to be called delinquent, even if they are,” Betancourt says. “When a patient is angry with the practice, the likelihood of them paying goes way down. In fact, I think that my firm language letters were mostly unproductive. They made more people mad than they made people pay.”

When Betancourt used a typical delinquency letter, his payment rate was only about 5%. He switched to a softer tone with reminder letters — and his response rate soared to between 30 and 40%.

6. Pick up the phone

If the payer doesn’t respond to the initial letter, Betancourt often resorts to a phone call. 

“The call is not intended to make patients feel guilty or to bully them, but rather to be informative,” he stresses. 

He gives an example of the way he starts a typical collections phone call:

Hello, Mrs. Smith. We wanted to follow up on the letter that we sent last week. We noticed we haven’t received payment for little Taylor’s sore throat visit last month. Did you have any questions about it? Could we help explain any of the charges? We also wanted to let you know that we can set up a payment plan, if that might be helpful.

Sometimes, when he is unable to reach the patient, Betancourt sends a follow-up letter reiterating the first letter’s main points. If that seems appropriate, it might include sterner language. 

“We might allude to the fact that if they don’t call us soon, or settle the bill, things could get difficult for them.”

7. Use a proven medical practice collection letter template

Betancourt offers a letter template that has dramatically improved his practice’s collections rate. 

Notice that it is direct, polite, and nonthreatening. You are free to copy and modify it to fit your own needs.

Medical collection letter template #1

Dear [Payer Name],

More than a month ago, we sent a billing statement for services provided, and have not yet received a response.

Your current balance with [Provider Name] is [Patient Balance].

We understand that medical bills and insurance statements can sometimes be confusing. If you have a question, we will be happy to help.

We also know that some of our patients might be experiencing financial difficulties. If this is the case, we can work with you to find a payment plan that is comfortable.

To fulfill your commitment without causing undue hardship, please do not hesitate to call us at [Phone Number].

If you have already sent payment, kindly disregard this letter.

We look forward to hearing from you or receiving your payment within five days.

Thank you for your prompt attention to this matter.



Medical collection letter template #2

Here’s another medical collection letter template with a slightly more personal tone, which you are welcome to use it as is or adapt it as you see fit.

Dear [Payer Name],

We would like to remind you of your current outstanding balance of [Patient Balance] for services provided more than [# of days] days ago by [Provider Name].

If you have already paid, we apologize, and ask you to disregard this letter.

On the other hand, if there are circumstances making it difficult for you to pay, we are often able to arrange a budget plan for your convenience. Please contact our office at [Phone number] to discuss possibilities.

If you have other questions about your invoice, insurance or services, just give us a call.

No matter what, we want to work together to resolve this outstanding payment, so that we can continue our relationship. Your health and well-being are our foremost concern, and we are here to help you in whatever way we can.

We look forward to hearing from you at your earliest convenience.



[Phone / Email]

Remember that the tips above assume you are using common best practices in medical collections. For example, you verify eligibility before providing services. You collect copayments and deductibles at the time of service, and you double-check that insurance and demographic details are up to date.

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Written by

Alesa Lightbourne, healthcare writer

Alesa Lightbourne is an award-winning author, professor, and former dean of an international business school. As a healthcare writer, her clients have included Fortune 50 companies, and her works have appeared in mainstream business, scientific, and medical publications.

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