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One of the first key practice indicators (KPI’s) that every office should look at is its aged accounts receivables and insurance aged receivables. Both reflect on the overall health of your practice financial policies and follow through. It goes without saying that your goal should and can be a collection rate of over 100%. We no longer carry money for our patients but rather use an outside lending institution to extend credit to our credit worthy patients. We also encourage every patient to prepay his/her account to receive a 5% discount on the total fee. Why would anyone ever have a “collections” problem? Knowing this, I am surprised that I still see offices with a month or more worth of uncollected charges. Sadly, most have unpaid accounts way over 90 days. Here are the top 7 reasons this is happening.

  1. No Policy: No written financial policy that you give to every patient and have them sign it as an acknowledgement that they have read, understand, and will abide by the current financial protocols of your office. Duh. You got it? Few, if any, offices do this routinely and they certainly are reaping the results of having no one in the office knowing what is proper and right for collecting the money that you are owed.
  2. No Training: You have not taken the time to train your staff on the proper way of doing the policies that you do have. How can you hold people accountable if you have not taken the time to train them? Not on-boarding new staff and/or not continuing to train every staff member is the chief reason for poor results and high staff turn-over. There is always going to be a need for revisiting even the most basic policies and protocols in the office.
  3. The Doctor circumvents the policies of the office: Who hasn’t seen a doctor do work on a patient without having signed financial arrangements with the patient? You would never see that in my office because my assistant would bar me from the room if there was any question as to whether the patient had the ability to pay or did not understand our policies. Poor treatment plans that turn into something more extensive than the doctor first thought is a frequent offender. Be aggressive with your diagnosis and treatment plan and do financial arrangements to accommodate those things that might happen. Lastly, don’t add treatment or do same day treatment without first stopping and doing another financial arrangement with the patient.
  4. Not understanding how to bill insurance companies: This is one of those moments when I just scratch my head and wonder why you haven’t become an expert at insurance estimation and billing? Order Charles Blair’s Coding with Confidence book and use it with every patient. Not only will your reimbursement be higher, but you are more likely to cut down the time it takes for you to get paid from the insurance company. Always include pre-op, during the procedure, and post-op x-rays, and photos if you want to get paid. Do this preemptively on every case. Always “misestimate” the amount that you think the insurance will pay in your favor. If you think they will pay half figure the estimate for the patient for about 43% instead of the 50% or a 5-7% error in your favor. That way if they overpay you are the hero, and if you missed the estimate it will not be by much.
  5. Carrying your own accounts receivable: In other words, not using an outside lending partner. Most of us struggle to collect any balance left after insurance payments. Why would you extend credit to people that you are not even sure are credit worthy? NOTE: People that owe you money cancel and no-show, do not refer, and if you go after the money they sue you. Big Sign: DO NOT CARRY YOUR OWN ACCOUNTS. NOTE TO STAFF: If the doctor does this without your knowledge, tell him/her that they get to make the collection calls.
  6. Not having more than one outside lender: There is huge difference in the approval rate among the various lenders and the most popular (translation = they give more money to the ADA) is definitely not the best. Just call and I can give you a couple of options. Case acceptance and collections comes down to helping your patients fit the cost of dentistry into their budget. Get good at this and you can’t miss. Remember that your goal, and the benchmark for collections, is to consistently be over 100%.
  7. Not collecting on the way in: There are several ways to mess this up. A previous patient that forgot their checkbook at the last appointment and still owes you on the seat date. Your front desk needs to run a report on every patient you will see that day and if there are any outstanding balances, they need to be collected on the way in, or they will not be seen. Sounds a little harsh but I like to hold hands and kiss before I get taken advantage of, and you are right, this has happened to me. There is nothing worse than being played by a professional crook.

Poor collections and high aged accounts receivables are not the problem. They are just the symptom of a lack of financial policies that will assure patients understand their part in the process coupled with a failure of figuring out a way for them to fit it into their budgets so that the practice always gets payed. This is how you Summit.

Michael Abernathy, DDS
972-523-4660 cell
[email protected]