Accounts Receivables Management, in a dental office, is perhaps more complex than any other small business, including medical offices. There are many third-party insurance company “hoops” to jump through just to get paid for preventative dental health, and especially cosmetic or restorative services. Therefore, to maintain a healthy cash flow in an industry where third-party reimbursement (and a significant amount of patient balances) can adversely affect cash flow, dentists must secure office staff with specific patient relations and business management skills, in addition to their specially trained dental technicians. That combination of office staff employee is not as common as one would think, and can represent significant costs to the practice.
Patients are required Patient Balances and Insurance Claims Result
With a dental office on practically every corner, competition for patients is fiercer than ever. dental marketing assistant A typical general dentistry practice has to walk a fine line between “coddling” patients and securing as much payment as possible before the patient’s treatment is completed, particularly if the treatment plan spans several office visits. Cosmetic and restorative dental treatment plans can cost thousands of dollars and many insurance plans covers little more than half of those costs. Some popular procedures are not even covered by some plans.
Good dental cash flow management, therefore, does not begin after a patient’s treatment is complete. It should start at the very least when the patient signs in for the visit and the appropriate demographic and insurance data gathered. Even before this, when the patient calls for an appointment, some of this information can be gathered and verified. Then after the “prophy” (the initial cleaning) and the X-rays that precede almost all other dental work, the treatment assessment can be presented to the patient, along with the costs.
During this “consult” with the patient, a detailed treatment plan is usually proposed, accompanied by a payment plan in case the patient’s resources do not allow for total patient responsible payment prior to treatment. Because of fairly high costs, the need for a payment plan is common and the office will often arrange a post-treatment installment payment plan or at the very least agree to send statements for any balances after insurance payment.
Patient Balances, Insurance, and Cash Flow
Thus, there are three major components of effective receivables management (as listed below) in a dental office and each is critical for sustained cash flow.
1. Insurance Verification and Treatment Plan
2. Claim Submission and Follow-up
3. Patient Responsible Balances – Statements, Pre-collections
1. Insurance Verification and Treatment Plan – When the patient calls for an appointment, the office needs to collect as much information regarding insurance coverage as possible. This information will be used during the initial visit, or patient “consult,” to help create a full payment plan for the more expensive cosmetic or restorative work the practice recommends.
2. Claim Submission and Accounts Receivable Follow-up – Insurance claims, with proper ADA codes, are submitted to the proper payers electronically, or by printed form in some cases, and immediate payment tracking processes are implemented.
3. Patient Responsible Balances – Any “post-treatment” payment plans that were approved need to be monitored for past due or partial payment activity. If such activity is flagged, then pre-collection letters and/or phone calls should follow until either payment is made, or the account is written off as bad debt and transferred to a collection agency for legal collection.
If the dental office is skilled in executing these three steps, a minimum number of accounts will be written off to collections agencies. If not, cash flow disruptions and a higher accounts receivables balance can result, and the practice risks tarnishing its PR image. None of these situations are ideal; therefore, dental practices should explore all possible business solutions to maintain cash flow and secure their patients’ repeat business, as well as new patient referrals. Both of these patient PR elements, as well as the aforementioned cash flow efforts, are vital for a practice to survive in the highly competitive market for dental services today.
More Information on Patient Balances, Insurance, and Cash Flow
We specialize in helping dental practices collect patient responsible balances faster and more efficiently lowering your expenses and increasing cash flow. We also help dental practices resolve insurance claims. Our clients typically get insurance claims paid 3 – 4 weeks earlier and some even receive priority claims review status.