How to Write a Collection Letter for Your Clients?

As a healthcare practitioner or practice manager, you’ve likely encountered situations where clients have outstanding balances for services rendered. It’s an uncomfortable scenario, but one that must be addressed promptly and professionally. Sending a well-crafted collection letter can be an effective way to recover those unpaid fees while maintaining a positive relationship with your clients.

But what’s the secret to writing a collection letter that actually works?

With a little guidance, you can craft a letter that compels clients to take action without compromising the therapeutic alliance. In this blog, let us look at the best practices, you should follow to navigate this delicate situation with tact and finesse.

Key Takeaways

A well-written collection letter is an essential tool for healthcare practices to recover unpaid fees from clients while maintaining a positive therapeutic relationship.

Striking the right balance of professionalism, empathy, and assertiveness is crucial when composing a collection letter to ensure it resonates with clients and compels payment.

Collection letters should follow a clear structure, include pertinent details about the outstanding balance, outline consequences for non-payment, and provide flexible payment options.

What is a Collection Letter?

A collection letter is a formal written communication sent to clients or patients who have outstanding unpaid balances for services rendered. It serves as a polite yet firm reminder of the overdue payment, typically providing details about the specific amount owed and a deadline for settling the debt.

When to Send a Collection Letter?

The timing of when to send a collection letter is important. If you act too quickly, clients may feel rushed or nickel-and-dimed. But if you wait too long, the outstanding balance can continue to increase, making it harder for the client to pay.

As a general guideline, many healthcare practices initiate the collection letter process if a balance remains unpaid 60-90 days after the initial bill was sent. However, you’ll want to check your practice policies and state regulations, as timelines can vary.

It’s also a good idea to make a friendly payment reminder call or email before sending a formal collection letter. This personal outreach may resolve the situation if it was simply an oversight on the client’s part.

If that initial nudge doesn’t work, then it’s time to escalate with an official collection letter detailing the amount owed, payment terms, and potential consequences of non-payment. Sending it by certified mail adds a degree of seriousness.

The key is to act swiftly once a reasonable time has passed before the balance becomes unmanageably large for the client. A timely collection letter demonstrates your practice’s financial responsibility.

Things to Consider Before Drafting a Collection Letter

Before putting your fingers to the keyboard, there are a few important factors to take into account when preparing to write a collection letter:

Review Client History

Look back at the client’s account and payment history. Were they typically reliable in paying on time previously? If so, this may have been an honest oversight and you can take a more understanding tone. Frequent late payers may require a firmer approach.

Check Practice Policies

Ensure you are following your healthcare practice’s protocols and timelines for collection efforts. Many have processes built around state regulations for recouping unpaid medical debts.

Verify Outstanding Balance

Double-check that the balance you have recorded matches what the client was actually billed. Accounting errors, missed payments, or insurance reimbursement issues can sometimes throw figures off.

Understand State Laws

Familiarize yourself with your state’s laws and guidelines around collection practices for medical debt. There may be disclosure requirements, interest rate caps, or prohibited actions you need to adhere to.

Choose Appropriate Tone

Will this be the first or second collection attempt? A polite but firmer tone may be needed if it’s not the initial request. However, avoid aggressive language that could damage the client relationship.

By taking these preparatory steps, you can ensure your collection letter starts off on a smart, well-informed footing – improving its chances of achieving the desired result.

Collection Letter Template

Here’s a collection letter template that you can readily use next time.

[Your Practice Name]

[Practice Address]


[Client/Patient Name]

[Client Address]

RE: Outstanding Balance – Account # [XXXXX]

Dear [Client/Patient Name],

Our records indicate that your account with [Practice Name] has an outstanding balance of [Outstanding Balance Amount] for services rendered on [Date(s) of Service]. Please refer to the enclosed statement for an itemized breakdown of charges.

We understand that circumstances may arise where paying medical bills becomes difficult. As a valued client, we wish to work with you to resolve this debt amicably. To settle your account, we request payment in full by [Due Date – 14-30 days from letter date]. Acceptable payment methods include:

Credit Card: Call our billing office at [Phone Number] to pay over the phone

Check: Made payable to [Practice Name] and mailed to the address above

Online Portal: Visit [Website] and enter your account number to make an online payment

If you are unable to pay the total balance at this time, please contact us at [Phone] to discuss setting up a payment plan option that works for your current financial situation.

Please be advised that if we do not receive payment or hear from you by [Due Date], we will be forced to take further action, which may include referring your debt to an external collection agency, reporting the delinquency to major credit bureaus, and/or terminating any future services with our practice.

We value our relationship with you and want to ensure this gets resolved promptly. You can reach our billing department at [Phone/Email] should you have any questions or need further assistance.

Thank you for your attention to this matter.


[Your Name]

[Your Position/Title]

[Practice Name]

Final Thoughts

Payment defaults in the healthcare industry have been on the rise, leading to an increase in unpaid medical bills and outstanding balances. Proper documentation is essential, making a well-crafted collection letter a necessary tool for recouping outstanding balances professionally. However, having a unified client portal that handles payment documentation and secure payment processing in one place can further streamline operations and improve financial health.

With TherapyPMS’s built-in client portal, you can store all client documents centrally and provide a secure payment portal that allows clients to pay outstanding balances conveniently on the go.

Leverage this all-in-one solution to run your practice hassle-free while optimizing revenue cycle management.

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