At a time when three out of four patients rely on online reviews in selecting a dentist or physician, dental practices can’t afford to get the patient experience wrong. But while patient intake and quality of care are top areas of focus, dental practices struggle to optimize the patient financial experience, putting patient loyalty and practice revenue at risk.
Revenue cycle challenges are common pain points for dental practices. With a rise in disposable income and a low unemployment rate, dental care is a top priority for consumers. But failure to provide accurate out-of-pocket estimates, delays in claim processing, and inaccurate patient responsibility billings can compromise dental practices’ ability to collect the amount due. They also leave a poor impression on patients when staff cannot justify the balance or attempt to collect too much, only to refund patients later. It’s not uncommon for patients to leave a dentist they love because they are tired of dealing with billing issues.
How can dental practices overcome hidden revenue cycle threats that damage patient loyalty and trust? Here are four action steps to consider.
Strengthen the Ability to Provide Out-of-Pocket Estimates
Out-of-pocket costs for dental care are the industry’s second-largest source of revenue. Although employers sometimes contribute toward the cost of dental premiums, many companies require employees to cover the cost of dental premiums themselves.
With consumers shouldering a significant portion of dental costs, it’s critical that the out-of-pocket estimates they receive are correct, especially when they are expected to pay the balance due in full at the end of their visit. But many dental practices underestimate the amount due after insurance, typically due to lack of training and experience. This leaves consumers frustrated when they think they have paid for their care, only to receive an unexpected bill later.
The payment process is the last impression patients have of their dental care experience. That’s why it’s so important to ensure staff accurately share out-of-pocket costs at the point of service or beforehand as the patient prepares to cover the expense.
Take a close look at your overall collections percentage. Consider, too, the number of accounts that require additional collection from patients after the date of service and the number of refunds your practice has issued for overpayment. If your collections percentage is lower than 95%, which is the industry average, consider investing in advanced software that can more accurately position staff to provide the right estimate at the point of care.
Train Staff to Effectively Navigate Conversations Around Costs of Care
The amount consumers pay for healthcare across all settings increased 11% in 2018, with 59% of consumers carrying out-of-pocket costs of $501 to $1,000, a recent report shows. It’s no surprise, then, that 68% of consumers want to discuss their costs of treatment with healthcare providers before receiving treatment. But some staff are uncomfortable navigating cost-of-care conversations with patients, even as they seek to collect the full out-of-pocket costs due.
At a time when patients face increased costs of care, it’s important that staff conduct these conversations with care. The Healthcare Financial Management Association recommends that staff who conduct patient financial discussions, from registration staff to financial clearance representatives and the customer service team, receive the following training annually:
- Best practices in patient financial communications
- Financial assistance policies
- Common coverage solutions for the uninsured and underinsured
- Customer service skills
In instances where the patient is concerned about how to manage the expense of a procedure, affordable payment options such as low-interest financing could relieve the patient’s anxiety, enabling the patient to more fully focus on the visit.
Look for Ways to Reduce Accounts Receivable
The average monthly accounts receivable for dental practices—expected revenue that has not yet been collected, whether from patients or from insurance companies—is nearly $120,000. The American Association of Dental Office Management recommends a practice’s accounts receivable not total more than half of average monthly production, or the revenue a practice expects to earn per month. But with a large range in claim denial rates across payers, dental providers need to put increased focus on collecting monies owed while maintaining a positive patient financial experience.
Faster claims filing is key. Make sure charges are posted daily to avoid issues with timely filing. These issues occur when claims are submitted after the timeline established by the payer (for example, 90 days from the date of service) and are automatically rejected.
Investing in benefits eligibility and verification software that automatically verifies patient coverage also is critical. Running eligibility checks at the point of registration and immediately prior to claims submission helps ensure patient coverage is still active and that claims are being sent to the right insurer on first pass.
Automate Cash Posting
In most dental practices, payment posting—recording payments received from insurance companies and individuals and applying them to the right accounts—is treated almost as a basement-level activity. It’s tedious, highly manual, and relegated to entry-level staff. It’s also a process that is highly prone to error.
When dental practices fail to invest in the right people and processes to support payment posting, they risk mistakes that make it difficult to follow up on underpayments from insurers. They also leave themselves vulnerable to a hit to their reputation, such as when errors prompt staff to pursue higher balances than necessary.
These are just some of the reasons why automating cash posting makes financial sense for physician practices. Automating this process provides real-time visibility into payments, streamlines remittance advice management, and more quickly identifies opportunities to better manage denials.
It’s also an approach that reduces the costs associated with medical billing, given that transaction costs associated with paper payment posting are five times higher than e-payments. One specialty practice saved 13 hours per day by automating its cash-posting processes, increasing productivity and freeing up staff to focus on more value-added activities.
Taking these steps will protect your practice’s relationship with patients as well as the financial health of your organization.
Mr. Koller is chief strategy officer at Revenue IQ, which specializes in automated remittance and status transactions for healthcare organizations. He has more than 25 years of experience in improving healthcare technology and revenue cycle processes. He specializes in electronic transactions that help dental practices and dental services organizations achieve meaningful business improvement.
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