Top 3 reasons why owners do not have or enforce a cancellation/no show policy
The cancellation/no show discussion is one that many times boils my blood. My clients tell me all the time about how low reimbursement is killing them. I try and look for ways to increase revenue and charging and collecting for cancel and no show appointments is one way to get a bit more cash.
If you are afraid to lose a patient because you charge them for cancelling or no showing for their visit, then I must question your confidence in your profession and providing exceptional patient care. You went to school to become a therapist and your time is valuable – shouldn’t patients respect your time and profession? As an owner when a patient does not show for a visit you still have to pay your therapist.
Do you think the patients who are offended that you charge for canceling or no showing will gladly pay for patient balances they may owe for treatment? Not likely. I base that answer on the numerous patient A/R’s I have seen that include not only unpaid cancel/no show fees but unpaid deductibles, co-pays etc. I even want you to charge your friends and relatives. Why? They are sometimes the worst offenders.
Too many practices do not demand that the administrative and professional staff get involved in communicating to the patients that their commitment to the plan of care program set up for them is critical to their meeting their goals. This is a real reason that showing up for each and every appointment is so important. As an owner I would expect no less from you.
Ok, I’m human and it happens to me too – an unforeseen circumstance is going to make me have to cancel my appointment at the last minute – at the same time, I realize that if I am giving last minute notice, the provider will have an opening that will not be filled because of my last minute cancellation. If you have clearly communicated this to me then I expect to be charged. It is not the provider’s fault that I had an “emergency”.
How many last minute cancellations are because of an “emergency”? Is that your fault? Should you lose money for that time because the patient had an “emergency”? I know what you’re probably saying “how heartless can she be”? But I’m not heartless. Over the years, I have found that the practices that have a policy and stick to it have far less “emergencies” than practices that forgive the charge because of an “emergency”. I also see patients taking their treatment program more seriously and better yet, they are collecting the fees.
Now for the no shows – my feeling is this, unless the patient can prove that a mistake in the patient’s appointment day is the fault of the practice they should be charged for not showing up. No excuses. Again you will see the “emergency” card pulled with no shows too. Is that your fault? So let’s throw another wrench into this mix. The front desk calls to cancel a patient because a therapist called in sick. Should the patient charge you? No. The policy has to accommodate those situations by rescheduling the patient with another therapist or as soon as possible with their therapist so as not to interfere with the patient’s treatment program.
I think that charging for no shows and cancellations shows support your profession and lets the patient know that you are a professional who cares about them and sets time aside for their appointment which is important to both of you. I think you are as valuable as any other healthcare provider out there. My doctor has no problem charging me if I cancel or no show and I still go to her, respect her and pay the fee.
Every time a patient cancels or no shows and you are not collecting something for the visit you are losing money. The longer you let this happen the more you lose. Dust off your original policy or create a new one but put one in place and hold your team accountable for implementing the new rules. As your culture changes so will the bottom line.
Here are a few things along the same line to ponder. Should hairdressers charge for a cancel or no show – after all they are losing money with no one in their chair, could be anywhere from $20 to $100 depending on what she was going to do. What about coming in 15 or 30 minutes late on your reservation for dinner – should a charge be added to your bill if they saved the table? Again, they lose money if there is no one at the table. What about the vet, or the dance instructor and on and on? Would you be offended if they charged you for not coming in or canceling at the last minute? Everyone is trying to provide the best service they can and every time someone cancels or no shows or is late costs the provider money.
If you need help in developing a policy and procedure for charging and collecting on cancellations and no shows give me a call. I am sure I can help.
Diane McCutcheon, President
DM Business Management Consulting Services, Inc.
Account Matters – Billing & Collection Services
4 Charlesview Road, Suite 4
Hopedale, MA 01747
P: 508-422-0231 F: 508-422-0234
Right off the bat, I have to say this is a subject that I get very passionate about. When I do assessments, I always address the cancellation/no show issue. I tracked my last 50 client’s responses as to whether or not they charge for cancels and/or no shows and went from there. Here is what I found:
Average cancellation rate: 19%
Average no show rate: 9%
Practices having a formal cancellation/no show policy that is supported by the entire staff: 19%
Practices diligent in adhering to their cancellation/no show policy: 13%
Practices that have a cancellation/no show statement included in the new patient info: 85%
Average charge for a cancellation/no show: 55%
Average percentage of fees billed and collected: 12%
Average of fees waived: 72%