Can I charge interest for late payments ? If I do so, am I required to notify patients before I start charging interest ?
Charging interest for late payments is permitted, however, the recommended collections method is to require the patient's payment at the beginning of service to avoid delinquent payments. Patients should be informed of the potential interest charge, which should be included in the practice's financial agreement and consent forms. When the practice decides to apply interest to delinquent accounts, it should give patients reasonable notice, such as 30 days, before imposing the interest charge. It is an individual business decision to determine the appropriate interest rate for delinquent accounts, but the rate must be applied equally to all patients with overdue accounts to prevent the risk of discrimination. Usury laws establish the maximum interest rates that may be charged which for a dental office is currently a maximum of 10 percent per year. Verify these rates before charging interest on a patient's outstanding balance.