Small Balance Write off, collections, and bad debt

micki127

Guru
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145
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Derry
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Hi,

What is the typical small balance write off amount? What is the lowest amount you would consider sending to collections and/or just write off as bad debt?

Thank you in advance for your input!
Micki
 

JCaillouet

Networker
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Uhm..

Isn't this more of a case by case basis? Some adjust for $5.00. Some adjust for $25.00. Some send to collections for general purpose etc.

What is your provider's preferred guidelines for this?
 

micki127

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Derry
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Yes, this is a case by case basis but I was looking for a general rule of thumb or an average that other practices were doing. As of right now there is nothing in place and I was thinking on the lines that nothing less than $25.00 should go to collections and anything less than $25.00 would go to bad debt. Everything under $2.50 would be a small balance adjustment.
 

Chelle-Lynn

True Blue
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Modesto, CA
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We are a Family Practice/Specialty provider office so we are set a little differently.

- Small balance is anything $4.99 and under
- Commonly for physician offices the collection threshold is $19.99 as co-pay are generally $20.00 and you would not want to write off co-pays that were not collected at the time of service.

Generally each office sets their guidelines based on common co-pay amounts and they weigh in the cost of assigning accounts to collections and the cost of going after a certain balance amount. So it comes down to cost of collections vs. the amount being collected.
 

micki127

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Derry
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Thank you for your input and you are so correct in what you stated. Definitely do not want to write off co-pays :)

Have a wonderful day!
 
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