Except for the occasional diehard who’s still hanging on to the “paper” practice for old times’ sake, dentists today have clearly gone digital. As a result, my purpose here is not to talk you into the merits of technology, but rather to remind you how easy it is to cash in on some of the financial bells and whistles you might find on your practice management software.
OVER-THE-COUNTER COLLECTION: CLICKING FOR CASH
There was a time when asking for money at checkout was like whispering into a wind tunnel. The business assistant had no clue as to what treatment was rendered, nor the fees connected with that or any other procedure. She had no way to recap services performed that day, nor could she confirm with the patient what part of the treatment plan had been completed and needed to be paid for, or what remained to be scheduled. Her appeal for money, therefore, sounded more like an apology, making over-the-counter collections a perpetual sore spot. We sure have come a long way.
Thanks to chairside terminals, the clinical assistant is now able to enter treatment data—via touch screen, mouse, light pen, or voice activation—directly into the patient’s chart on the computer. Before the patient even leaves the operatory, the records are instantly available at the front desk. Just a click or two, and the business assistant can view:
- today’s treatment, complete with tooth number(s), surfaces, and ADA codes
- today’s fees
- account balance
- previous balance
- copayment or deductible
- remaining third-party benefits
- expected third-party payment
- continuing care information
- amount of doctor/hygienist/chair time needed for next appointment .
Having this information as the patient is dismissed can have a very positive impact on cash flow, however, it doesn’t lessen the need for the business assistant to ASK FOR MONEY. By using much of the information displayed on-screen during the “ask,” chances of getting paid are greatly improved. For example, “Mrs. Anderson, today Dr. Thomas performed fillings on two teeth, which entailed five surfaces, plus medication in each tooth, and anesthetic, for a total of $226 for this visit. Our computer estimates that your remaining benefits from your insurer are approximately $72. Your balance for today’s visit, then, is $154. Would you prefer paying that with cash, check, or credit card?” This approach gives the patient a full understanding of what was done, along with a logical basis for the charges, plus it shows a generous willingness by the practice to wait for anticipated insurance payment. Finally, it directly mandates payment today for services rendered today. In a polite, friendly, nonthreatening manner, your business assistant needs to smile, look the patient straight in the eye, and make it clear that there’s nothing negotiable about this obligation.
As the patient pays, she should receive an itemized printout—a walkout statement—of the services performed, fees for services, anticipated insurance payment, as well as amount of patient payment. If she does not pay, however, a return envelope should be handed to her along with a verbal cue to “please mail us your check when you get home.”
Over-the-counter collections can be tough to measure because most software programs do not have a designation that payment was made “over the counter,” meaning that payment was made on treatment rendered that day. Your financial coordinator may have to go manually into the system settings and identify a payment made by cash, check, or credit card at time of service. Some find it helpful to stick with simple coding such as “OCCA” for over-the-counter cash, “OCCK” for check, and “OCCC” for credit card. Using this kind of coding will allow the business assistant to precisely monitor payment activity. The amounts of cash, check, and credit card payments collected over the counter for the month should be totaled and divided by monthly production. This percentage should fall between 35% and 45% of the total production if you accept insurance assignment. If you do not accept assignment, however, your over-the-counter collections should be in the 90% range.
ALTERNATE FINANCING: READY MONEY
The fact is that getting paid on the spot is far more valuable than getting paid at some later date, or not getting paid at all. Considering the costs of billing, tracking, and repeated collection efforts down the road, it’s no wonder that patient financing programs are regarded by so many doctors as manna from heaven. And from many a patient’s perspective, this kind of payment option can shift their thinking from “Way out of my budget,” to “Yep, I think I can handle this.”
As an example, based on your presentation of Mr. Clark’s treatment needs, he wants to move forward with the proposed treatment plan, but asks for some “consideration” in the payment of it. It’s clear to you that linking him up with the right patient financing program is as good as money in the bank. Facilitating the process, your financial coordinator shows Mr. Clark how to go online to CareCredit, for example, enter the required application data, hit submit, and receive a decision in 30 seconds or less. On getting his approval, he immediately schedules the first two appointments needed to begin the treatment plan. Such easy access to the Internet and patient financing can be a high-speed road to riches for your practice. What’s more, your patient is thoroughly delighted and appreciative to boot.
The patient financing concept, though, is not just for patients about to embark on extensive treatment plans, but also for patients who have long-running account balances. In a carefully worded conversation or letter, your financial coordinator needs to inform patients that you will no longer be able to carry balances beyond 30 days, and that effective on a certain date, their balances will need to be paid in full or transferred to a patient financing program. For the patients’ convenience, your financial coordinator should offer to walk them through getting online—in your office or at home—and transferring their balances to such a program. To sweeten the deal further, let them know that some of these programs can even be interest-free for 12 months, if contracted online. This type of financing resulted in a phenomenal surge when offered by the auto industry, and could well do the same for dentistry.
INSURANCE: HARD CASH
After ages of submitting paper insurance claims and waiting the requisite eons before getting paid—or waiting the same amount of time to have claims rejected—the advent of electronic filing of claims being done by most practices these days has given cash flow a much-needed shot in the arm. As long as all the t’s are crossed and i’s dotted, third-party payments will typically arrive in half the time it took when they were filed manually. To that end, software should have the capacity to perform a validation process on each claim, making sure that all necessary provider and account information is included, and demonstrating zero tolerance for claims on which data is not correctly entered. Furthermore, some programs will automatically highlight the patient’s condition along with clinical annotations, resulting in expedited approvals of insurance claims. Talk about bolstering cash flow and reducing administrative costs!
If you accept assignment of benefits from the insurance company, you should be able to generate from your computer a report of unpaid claims. Such a report—sorted by insurance company—can be more helpful than an alphabetical report by patient. Although several systems offer this option, few business assistants know of its availability.
With regard to insurance, there are several points that I believe are important to keep in mind. First, and most important, is that by mid-October 2002, all claim submissions must comply with the Health Insurance Portability and Accountability Act (HIPAA) transaction and code set rules. Unlike many directives, this one promises to reduce administrative costs not only for third-party payers, but for providers as well. Now is a good time for staff to make sure that all electronic claims transactions are in accordance with HIPAA’s guidelines.
While your business assistant posts third-party payments, your software should automatically update UCRs, resulting in more precise estimating day after day. Cash flow will be further enhanced as your software reduces costs with administrative efficiencies such as:
- Tracking available benefits as well as uninsured procedures. This information is critical to treatment plan presentation.
- Tracking and processing secondary insurance automatically upon administration of primary benefits.
- Keeping signatures on file so that after an estimate of benefits is received, patient portion may be calculated and credit card payment automatically processed.
- Auditing submitted claims and automatically aging them—without input from your staff—until they are either paid off or written off.
- Billing insurer under the provider’s name, if different from patient’s regular doctor.
- Providing a detailed report of all claims sent within the last day/week/month.
PRODUCTIVITY SCHEDULING: TIME VERSUS MONEY
Keeping chairs filled with productive procedure time has been a long-standing challenge, but one for which many doctors have found an always-on-tap software solution: customized scheduling, which can precisely allocate time units to doctor time, assistant time, hygienist time, and chair time.
Productivity scheduling, otherwise known as scheduling to goal, can be done as follows: the scheduling coordinator starts by entering a daily goal. Each time an appointment is scheduled, the computer determines the value of the appointment and reports how much of the goal is left to schedule. Next, the system relates this information to the number of unscheduled time units left per day, and finally, how that time relates to lost revenues.
In addition to the above capabilities, today’s practice management software is so sophisticated that it tracks treatment needs of every patient as well as what portion of treatment has been completed and/or appointed. Instead of sitting by, allowing hundreds of thousands of dollars to accrue in unscheduled treatment, your scheduling coordinator should be expected to make daily “sales calls” for the purpose of getting treatment plans scheduled. The combination of staff accountability and software capability will also fill last-minute holes in the schedule with patients who have expressed an interest in being seen earlier. The software’s drag-and-drop feature allows for easy rescheduling of these appointments. Of course, for patient availability information to be provided by your software system, continual input from your scheduling coordinator is a must.
Before we leave this area, let’s take a quick look at the scheduling of recall patients. Technology continues to march forward in the area of continuing care. Monitoring the recall status of every patient, your practice management software will serve as a “tickler” file, reminding your re-care staff member of the patient-specific reason for scheduling an appointment. Don’t minimize the value of notes, cards, letters, or phone calls relaying this information to the patient. Personal attention is the one thing that really moves the patient satisfaction indicator.
One last thought on this: you should be gathering e-mail addresses on new and existing patients with the thought of appointment confirmation, but also for recall reminders.
ACCOUNTS RECEIVABLE: DUE AND OVERDUE
Again, thanks to the electronic filing of insurance claims, we’re seeing practices over the past few years whose accounts receivable have dropped from 2 X monthly production to 1 X or just below. Another factor in this success story, as mentioned earlier, is the more widespread use of credit cards, plus the influx of patient financing companies like CareCredit that weren’t as prominent back in the 1980s and 1990s.
Today’s practice management software provides us with accounts receivable reports as well as aged reports, aiding in cash flow management by identifying not only third-party payers that have not yet paid up, but patients who are past due as well. The significance of this information, though, hinges upon what the employee does with it once it is retrieved from the computer.
Cranking out an aged accounts receivable report is almost like putting a closed-circuit TV on the wall, for it will be immediately apparent whether or not your business assistant is collecting monies from patients as work is done. For example, if you are producing $60K a month, and the “current” column of your accounts receivable reads $58K, then someone at the front desk is not asking—or is not so good at asking—for money. If more than 15% of your total accounts receivable is over 90 days past due, then your staff is obviously not taking enough action at 31 days past due to collect it. It may well be that this kind of shenanigans has gone undetected or unchecked for too long. But now that technology has given you free access to the workings of the inner sanctum, you can have your accounts receivable accurately aged at any time!
Delinquent messages should begin after 30 days. It is important to understand than an account is due and payable when the services are performed; therefore, I recommend that my clients do “cycle” billing or billing on a daily basis. Remember that when a statement is sent 30 days later, it’s already 30 days past due. So, forget you ever heard the concept of beginning-of-the-month or end-of-the-month billing. If truth be told, billing once a month is too taxing on your staff and too immobilizing to your cash flow.
Although your software can output generic dunning statements and letters, it’s typically preferable to customize the message, especially if one-on-one conversations have taken place with the patient regarding the account. When such conversations take place, highlights of the conversation should be input by your business assistant or financial coordinator. This documentation is automatically integrated into patient financial tracking, providing a critical history of collection attempts. This is just one more software feature that gives your practice a better shot at doing away with collections gridlock, bringing the numbers into line, and finding your cash flow in a new state of abundance.
THE LAST WORD
Take time to deliberate. But when the time for action arrives, stop thinking and make your move. Once you can see the fruit on the tree, it’s a greater pity to let it rot.
Ms. McKenzie is a nationally known lecturer, author, and consultant to the Council on Dental Practice of the ADA. She is president of McKenzie Management and Associates, which provides in-office analysis of the business, clinical, and hygiene department; conducts on-site staff training; and offers a full line of educational management books, audiotapes, and videos. Since opening McKenzie Management in 1979, Sally has developed expedient practice systems, methods, and technologies as well as effective management approaches for the dental practice. Additionally, Ms. McKenzie’s 34 years of experience and expertise are now available as on-tap resources for her ventures: practicemanagement-online.com and dentalcareerdevelop.com. For information on what any of these companies can do for your practice, call Sally toll-free at (877) 777-6151, and visit her websites at: www.mckenziemgmt.com; www.practicemanagement-online.com; www.dentalcareerdevelop.com.