
Systems4PT’s Guide to Patient Billing and Collections
Part Seven: Dunning Process
Dunning is the process of communicating with your patients to collect money owed for goods or services provided. The collection process involves escalating the intensity of demands for payment. The degree and speed of escalation are determined by the clinic owner based on things such as the amount owed, aging of the amount owed, and patient relationships.
Five Levels of Dunning
Level One is your first invoicing of the patient. The amount being billed is in the 0 – 30 day aging bucket. This invoice will have your default Clinic Message thanking the patient for choosing your clinic and advising them that payment is due upon receipt.

If the patient makes a payment before to your next billing cycle, you will leave them in this level of dunning, even if they didn’t pay the complete balance due.
Level Two
This stage is when you have billed the patient once and received no payment. The amount being billed is now in the 31 – 60 day aging bucket. Some of the amount due may be in older aging buckets. This can happen if the patient has not been paying bills in full, the therapist had not signed their note on time, or there had been insurance payment delays resulting in a delay in posting the patient’s deductible or co-insurance. The aging bucket reflects the time from the date of service to the present.
You will change your Clinic Message to gently remind the patient that their balance is now past due.

Level Three
means you have billed the patient two times with no response. Now the amount due is in the 61 – 90 day aging bucket. Money becomes less likely to be collected, the older it gets. Your Clinic Message will now be more forceful. At this point, you might want to call the patient if you haven’t already. Make sure you have been sending the bills to the correct address. Discuss with the patient any issues that may be preventing them from making payment and see if you can come to a mutually beneficial plan to get the bill resolved.

If the patient makes a payment, but not the full amount due, they will drop back to level 1. If the patient sets up a payment plan, they will drop back to level one. Be sure you put the payment plan in writing and get the patient or responsible party to sign the payment plan.
Level Four
This is now very serious. The patient has been billed for 3 consecutive months with no response. The amount due is now in the 91 – 120 days or 120+ aging buckets. The Clinic Message will be your most serious and final message.

If the patient makes a payment, but not the full amount due, they will drop back to level 1. If the patient sets up a payment plan, they will drop back to level one. Be sure you put the payment plan in writing and get the patient or responsible party to sign the payment plan.
Level Five
This is when you turn the account over to a collection attorney or collection agency. Your collection attorney may have a minimum amount that they will accept. Your clinic dunning policy may also have amounts set at each level that you no longer feel are cost-effective to continue pursuing. This is where the Payment Policy the patient signed on their first visit becomes very valuable. It shows the patient agreed to the terms of paying for your services and it allows for collecting interest, attorney fees, and court costs from the patient. You will provide the attorney/agency with any requested information. You will change the patient’s status in System4PT to “Sent to Collections” which will take them off the aging and invoicing lists and reports. You will place the balance in a batch on the CASH Posting Screen (CPS) labeled “COLLECTIONS -LEAVE OPEN”. Because this batch is never closed, once you receive payment from the collection attorney/agency, you can go back and reverse the money out of this batch and post the payments to the patient’s account.
If you would like a copy of this guide to download for your own personal reference, please use the download button below to obtain a copy in PDF format. Check back for more Systems4PT guides and updates!
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