Despite all the hottest high-tech wizardry for which you’ve purged and splurged in the name of collections, your return on investment may be distressingly low while your accounts receivable remain alarmingly high. Don’t be too quick, though, to blame your practice management software. The fact is, with the information technology available in most practices today, collection efforts should yield 98% for treatment currently being performed. The problem is, such a windfall requires not just the capabilities of technology but those of doctor and staff too.
In the frenzy of everyday practice, many doctors can’t–or more accurately, don’t–take the time to see the forest for the trees. For example, when I ask doctors if they know what their over-the-counter (OTC) collections or receivables are, more often than not they tell me they don’t know. What a mind-boggling admission! Doctor, your OTC collections and receivables are as much your business as the dentistry you perform. Too bad it sometimes takes negative cash flow to make some doctors sit up and take notice.
Admittedly, when it comes to a new program or system that might help staff members do their jobs more cost-effectively, productively, or profitably, many doctors will focus long enough to make the purchase. But the acquisition of this new technology is merely a starting point, not the be-all or end-all. Although the training-with-purchase provided by the software company gets your team through the basics, it is typically the only training the staff receives. As a result, the staff never gets to the next level. To add insult to injury, new-hires don’t receive any training on it at all, except second- or third-hand accounts from the staff, who went through the initial, incomplete training. Considering the tidy sum that each new acquisition costs, why skimp on training? But let’s not get ahead of ourselves. My critical mission right now is to give you a framework of expectations and procedures that can help your practice reach that gold standard I mentioned earlier...collection efforts yielding 98%.
FINANCIAL POLICY—LIKE MONEY IN THE BANK
For decades, dental practices allowed patients to “pay down” their balances over time; in essence, giving interest-free loans because that’s the way things were done in those days. Well, in these days, dentists realize that they have been serving as “no-interest banks” long enough. Going on record with a financial policy—stated guidelines as to how patients are expected to pay for their treatment—is essential to collection today. For example, the financial policy might spell out that if a patient’s insurance will cover 50% of the cost of a crown, the patient’s portion is to be paid for in full up front. But you’d better make certain that your financial coordinator goes over these “terms” with each patient for each procedure or treatment plan. Don’t assume that having your financial policy framed handsomely and hung on the wall or showcased in your brochure will do the job.
Reviewing this financial policy one on one with patients—verifying that everyone is on the same page—will go a long way towards improving your collections. Making payment easier for patients is another way to improve collections while it promotes treatment acceptance. One favorite is to offer a 5% adjustment for payment in full at the start of treatment (typically only offered for payments made with cash or check). The other, of course, is making financing available through companies that offer such services, such as Care Credit, and accepting credit cards. Despite processing fees and percentages taken off the top, the advantage is that payment is virtually guaranteed. That said, the new Dentrix service called PowerPay will process credit card payments at a significantly lower interchange rate than with the typical point-of-sale terminal. PowerPay also allows the practice and patient to set up a payment plan, which means the patient’s credit card is charged on a recurring basis until the dental work has been paid in full. Best of all, this system streamlines payment and posting while eliminating billing for your practice. A most welcome idea.
TRAINING: THE DIFFERENCE BETWEEN READY CASH AND A DEADLY CACHE OF PAST DUES
The number one reason for poor collections in most practices is a lack of training. To produce a hefty turnaround in your collection efforts, it is critical to provide results-oriented training designed to meet the following practice objectives...
A 98% collection rate should be maintained for treatment being performed currently. For practices accepting assignment, over-the-counter collections should range between 40% and 45% of total production. (Since it is feasible for a hygienist to treat 10 patients in one day, from whom the practice will collect zero dollars because insurance will pay 100%, it is essential that these measurements be averaged monthly to adjust for the ratio of insurance payment of benefits and patient payment.) Practices that do not accept assignment should strive for 85% to 100% collections over the counter. Accounts receivable should be no more than 1x monthly production. Finally, accounts receivable over 90 days should not exceed 12% of total accounts receivable.
It is important to note that most practice management software has the capability to handle all of the necessary reports, reminders, statements, insurance filings, and aging of accounts receivable as well as virtually all cues and prompts that will allow you to customize every attempt at collection. But I reiterate here that your staff will only be able to attain the desired collections numbers once they’ve received the requisite training to carry out the following job responsibilities:
(1) Over-the-Counter Collecting: To maximize payment at time of service, patients should be made aware (prior to their visit) of what is to be done and what fees they will be charged so they’ll be prepared to pay. Your financial coordinator/business administrator should look the patient straight in the eye, be firm and professional and follow a script such as, “Mrs. Reiss, this afternoon Dr. Ennis provided tooth-colored fillings on 2 teeth, which entailed 4 surfaces plus medication in each tooth and anesthetic, for a total of $345 for this visit. Our computer estimates that your remaining benefits from your insurer are approximately $278. Your portion for today’s visit, then, is $69. Would you prefer paying that with cash, check, or credit card?”
A printout of services provided—along with the anticipated insurance payment as well as amount of patient payment—should be handed to every patient at every visit. When patients see their balance in black and white while they are still in the office, a sense of responsibility often kicks in along with a greater likelihood of payment. When the words PAID or PAID IN FULL appear on their statement, it gives them a subliminal sense of pride that they will instinctively want to reinforce at the next visit. If the patient does not pay, he or she should be handed a return envelope and told, “Here, this will make it easy for you to mail us your check when you get home.”
(2) Billing: “Cycle” billing, or billing on a daily rather than monthly basis, will reduce workload and increase cash flow. If you were to wait until the end of the month, the statement might already be 30 days past due. Every statement should include a due date (2 weeks from statement date), description of services, procedure codes, charges, payments, account balance, practice financial policy, and credit terms as well as a customized message addressing any overdue balance. Make sure that there is a space for the responsible party to write in a credit card number and expiration date as a means of payment. If you have a relationship with a patient financing company, you may want to piggyback its brochures with your statements. A self-addressed payment envelope should also be provided.
(3) Insurance: By tracking available benefits as well as uninsured procedures, you can calculate the anticipated insurance payment and collect the patient portion at time of dismissal. After your software performs a validation process on each claim—demonstrating a zero tolerance for claims on which data are not correctly entered—claims should be sent electronically on the day of service. Each week, a delinquent insurance claim report should be generated and grouped by carrier so that one call can be made per carrier to check on all claims that are 30 days delinquent.
(4) Delinquent Account Calls: Use accounts receivable and aged reports to identify patients who are past due as well as third-party payors that have not yet paid. Delinquent account calls should then begin one day past the due date on the first statement. Calls should be conducted professionally, observing guidelines of appropriate time and place to call. The manner and tone used will greatly influence the effectiveness of the call. Therefore, set the tone as one of working together to resolve the situation. The caller’s key question should be, “When can we expect payment?” Restate to the patient the amount he or she promises to pay and when. Highlights of this conversation should be entered into the computer, since it provides a critical history of collection attempts. On the same day, follow up the phone conversation with written confirmation.
Ideally, collection is a 2-person job: one person should be responsible for collecting monies from patients as they are dismissed; the other person should have the uninterrupted time to do justice to insurance filing, billing, and delinquent account calls.
Doctor, if you want to get more out of your practice, you must put more into it. Know the score at all times and provide superb training for your staff. It’s an unbeatable arrangement that will pay the utmost dividends.
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