The dental profession faces a number of emerging financial changes and challenges. Combined, they make achieving and sustaining a stable cash flow a difficult yet still essential part of any management plan.
U.S. government spending on dental care has increased, as 4 in 10 children in the United States now have public dental coverage. Also, new dentists entering the market are well trained, but they carry an average debt load of $200,000. These changes have prompted a shift from solo dental practices to group or corporate practices.
Additional changes in the profession have been brought about by the shift in population from northern states to the Sunbelt. Also, consumers are more sophisticated and well informed about their medical and dental care. They seek high-quality care without a premium.
These transformations require different patient care, insurance acceptance, and technologies. Personnel need expertise to deal with healthcare reform including insurance billing, setup, and claims processing. So now, there is a trend towards corporate-supported dental practices, with outsourced management or dental billing services.
The Need for Expertise
With these changes in dentistry, there is a need for efficiency, decreased expenses, technology investment, and expert assistance by outsourcing services for productivity and cost effectiveness. The underlying factor necessary in operating a dental office is cash flow.
Offices that have skilled, motivated, and sharp team members working on accounts have no more than $3,000 to $5,000 in over 30 days aging (total insurance and patient balances) for every $80,000 of monthly production.
Today’s typical dental office structure on average has one dentist, a hygienist or 2, and an assistant or 2. There also may be an office manager who covers the front desk or individual front desk and management personnel.
There is formal training for the dentist, assistant, and hygienist as well. But clerical personnel learn on the job and through weekend coding classes. Errors and limited education are passed on.
The dental industry has changed from fee-for-service to insurance dependence, so the demand for dental billing expertise has increased. So has the demand for uninterrupted time for dental billing.
Yet the typical dental office cannot afford to have a dedicated team member chasing insurance claims and patient balances. It also does not have the expertise in insurance plans or their billing or coding, nor does it have systems or managerial skills in place for working accounts receivable, especially with the continuous interruptions of patients and phone calls.
As the medical industry has become more dependent upon insurance, many practices have outsourced medical billing, realizing that it is the most efficient and productive way to get paid.
How It Works
Insurance balances are different. With skilled billing, you should get paid in 3 weeks by dental insurance if your team is sending “clean claims.” Otherwise, you wait for claims to be resolved, and your cash flow is affected.
Sending “clean claims” takes expertise, time, persistence, clinical knowledge, and hours of follow-up. If your billing over 30 days is not within the efficient range, then there is an internal problem. The top problems among dental clerical staff when it comes to dental billing include:
- A lack of time;
- Interruptions by phones and patients;
- A lack of expertise in insurance billing, coding, and claims processing; • A lack of motivation.
As a result, you acquire unresolved claims that hold up your cash flow due to several common errors:
- Incorrect patient, practice, provider, or employer information such as demographics (35% of errors);
- The front office forgets something and supporting documentation has not been submitted with the initial claim (25%);
- The insurance company delays payment by asking for more information (20%);
- The insurance is set up incorrectly in the patient’s account (10%);
- The front office does not know how to set up the account, especially in dual insurance, blended families, or plans that are administered by major dental insurances (5%);
- The insurance company did not receive the claim so there is a need to follow up with phone calls (5%).
In addition, as the insurance benefits decrease, the patient’s copay is increasing. As a result, the treatment-plan acceptance to proceed with treatment has decreased, and patient balances accounts receivable has increased. If patients’ balances are not collected at time of service, the aging patient balances get out of control and the team will need time to work the collections. Recovery of patient balances decreases significantly with time, and so does the dentist’s cash flow.
Is your current dental billing effective? Hiring a skilled and dedicated person will cost you at least $15 an hour plus benefits and taxes. This person is usually unsupervised and very busy, while lacking direction and accountability.
For $2,000 flat fee per month ($12/hour full time), services like Dental Claims Cleanup LLC handle your accounts receivable for you. These companies never call in sick or take personal leave. Now your team can focus on patients in the office, treatment-plan acceptance, and booking your schedule. (That’s what your team does best.)
Dental Claims Cleanup systematically works accounts from week to week with weekly spreadsheet reporting of its progress. It also cleans up unresolved claims, patient balances and increases cash flow. And, it meets weekly with clients with a 30-minute conference call informing them of its progress and providing advice on future error correction.
Dr. Dorothy Kassab is the president of Dental Claims Cleanup, LLC. She can be reached at email@example.com.