Financial Arrangement Tips
Along the journey, you will always run into areas that are not quite as exciting. Perhaps, even boring. None the less, super practices are masters of the fundamentals. Average practices “think” they have the fundamentals down, but just never get the results of the better practices. One of these areas is financial arrangements and the person responsible for them. Too often, I see results faulter because of one poor hire, or one wrong system, or even one wrong action that ruins all of the preparation in having patients show up, pay for their treatment, and refer everyone they know. In the new dental economy, you get one chance. Mess that up by just a little and people will vote with their feet by going down the street.
The subtleties of financial arrangements along with the tools and systems are not difficult. Once in place they will automatically improve your bottom line, dissolve uncertainty with your team, and train your patients in the proper way of having them help you fit their needed treatment into their budgets.
Let’s take a look at a few fundamental standards every practice should have in place.
- No one leaves without paying for their treatment. Take a look at your aged accounts receivable totals and you should find most of it under “current” (under 30 days) and the rest in 30–60-day category. 60-90 should be less than 6% and there should be 0 in the 90 days and over. If you find, like many offices do, that you have uncollected monies lingering in the over 90 days category, you have some work to do. If you do ortho or carry some of your patients bills for several months, be sure that these are always set up as a “reoccurring charge setup” in your software. In that way you will not have it ever run past 60 days while the computer software makes sure that only the payment due is posted to the aged accounts receivable.
- Aged accounts receivables is not really what people owe you. All dental software’s give a “net” accounts receivable total. In other words, your accounts receivable has debit amounts (what people owe you) and credit amounts (what you owe the patient) combined. When you run your aging account numbers the computer is subtracting the credits from the debits to give you a “net” aged accounts receivable. To really know what you are owed or what you still owe a patient (they have paid but you have not performed the service) you must run a credit balance ($.00 and below), and a separate debit report ($.01 or greater). You may be surprised at the difference makes when you really see the amount of money you are owed and have not collected.
- Poor numbers are not the problem. It is everything you have done prior to them not paying you. Poor estimation on insurance and poor follow through. Not collecting in advance for a slight discount. Not collecting up front, before actually performing the service or selling the product. Poor numbers are merely symptoms of an underlying real problem with the front desk and systems and protocols. People who owe you money don’t show up for appointments, don’t refer people to your office, and if pursued to pay, will sue you and/or complain to the state board.
- You should have a physical tool to track your financial agreements and estimate of benefits. Attached below is an example. You will notice that we almost never use our software to print off a “super bill” of the entire treatment plan and detailed charges. Instead, we summarize the charge and insurance probable coverage and their out-of-pocket expense. It lumps together the next appointments treatment and the investment for that appointment.
Financial Policy for Our Patients
Our office wants all our patients to be able to comfortably afford their dental care. We will gladly discuss our payment options with you before beginning your treatment. We proudly offer the following financial policy so that our patients can have the opportunity to decide which payment option best suits your needs:
Dental Insurance: Our office will gladly work with you to help get the maximum benefit available to you. Dental insurance plans do not cover 100% of your cost of treatment. Therefore, you will be asked to pay your deductible and your co-payment for the charges on the day the services are rendered. We are happy to file the forms necessary to assure you receive the full benefit of your dental insurance. We will gladly estimate your coverage; however, many variables exist from carrier to carrier (i.e., deductibles, annual maximums, allowable fee limitations, non-covered procedures and other restrictions). Therefore, we cannot guarantee any estimated charges. Because your insurance benefit is an agreement between you and the insurance company, ultimately you are responsible for all charges. Please know that we will do everything possible to see that you receive the full benefits from your insurance company. If for some reason your insurance company has not paid their portion within 60 days from the start of treatment, you are responsible for payment at that time. Also, for all treatment under $100.00, excluding preventative treatment, you will be asked to pay in full.
Payment options: (This was printed on our stationary on one page back and front. Policy on the front, estimate sheet on the back.)
- Cash or check: We are happy to offer a 5% pre-payment courtesy for all treatment paid in full in advance of treatment. This is not offered at time of treatment.
- Credit Card: Our office accepts VISA, MasterCard, Discover and American Express.
Outside Financing: We work with multiple companies to help you.
- Option 1- Care Credit – For treatment over $300, patients can apply while in our office and approval is known within a few minutes. Care Credit offers 3-, 6-, 12-, and 18-month interest free plans and 24, 36 and 48 month extended payment plans with a _____% interest. There is no down payment required, no annual fees and no pre-payment penalty for this plan.
- Option 2 – Health Care Credit Line – A dental credit card that can be applied for through our office with an outside financing company. The application is called in from our office, and we usually know within an hour if the applicant is approved. This is a 90-day interest free credit card with payments being made directly to the financing company. The interest after 90 days is _____%.
- Option 3 – Dental Fee Plan – For treatment over $1, OOO, we offer another payment plan from an outside financing company to patients with good credit standing. Up to 60 months to pay with no down payment and interest ranging from 5.9% to 12.9%. The application process may be made from the privacy of your own home.
- Senior Citizen Discount: As a courtesy to anyone 60 years or older, we will gladly extend a 5% discount for all services when paid at time of treatment.
- Pre-payment Discount: We extend a pre-payment discount of 10% if services are paid in advance of your appointment and treatment in This discount is not offered if you pay at time of treatment.
Patient Name: _____________________________________
Treatment Plan I:
Total Estimate fee: $_______
Estimated Insurance Coverage $________
(Prepayment Savings) $________
Estimated Payment Portion $______
Date: __________________
Patient or Responsible Party: ___________________________________
Business Assistant: _____________________________________
Treatment Plan Il:
Total Estimate fee $________
Estimated Insurance Coverage $________
(Prepayment Savings) $________
Estimated Payment Portion $_______
Date: __________________
Patient or Responsible Party: ___________________________________
Business Assistant: _____________________________________
- NOTE: (This is worth repeating.) We rarely, if ever, used our software to recreate the treatment as a super bill to give to the patient. This gives every detail of the treatment plan plus itemized cost of each individual service. It invites shopping and tends to overwhelm the patient when they take the sheet of paper, hold it up, go from left to right at the top of the page, and then drop to the bottom right where the total of all treatment is printed. Doing it this way will cost you money and run off many patients when they leave to “think about” what they want to do. Rather (and this was mentioned earlier in the 180 Degree Journey when talking about treatment planning/case presentation) we find out what the patient wants, what their dental IQ is, and what their budget will allow. We always try to give them more of what they want and less of what they don’t want. The trick is helping and inspiring each patient want what they need. If we always begin with what they want, they will always find a way to pay for it and will never cancel or no-show for their appointment. The “common place” vs “common sense” specter once again raises its head. Wrong is wrong even if everyone is doing it. Right is right even if no one is doing it. Common sense in a consumer driven business demands that we understand and move to embrace the new, better informed dental consumer.
- No one leaves without an appointment. They make an appointment for recall, doctor treatment, or even an appointment for a call so that we can follow up and ensure that they do not fall “through the cracks” and we lose track of them.
- Case acceptance rate. Perhaps 50% of case acceptance is how you stage the financial arrangements in order to give the patient what they want and fit into the budget they have. This system of financial arrangements can make or break your profitability. With an average case acceptance rate of about 60% for dentists in the US, anything you do to improve financial arrangements should make a huge difference on the bottom line.
- Aways miscalculate what the insurance will pay. When calculating insurance reimbursement for the patient, make sure you always miscalculate the estimate of what they will pay in your favor. We used about 10%. Just so we all understand what I am saying: We figure that the reimbursement from insurance is going to be $500.00. When we use the estimate sheet above, we instead tell the patient it will be about $450 and figure their portion based on this adjustment. Why do we do this? Insurance companies rarely pay what we think they will and this creates a huge challenge between us and the patient. How many of your team love to call a patient after the insurance company stiffs us and explain to the patient that they owe you more than you originally told them? Nobody! On the other hand, by misestimating in your favor, anyone is happy to call a patient and tell them that the insurance company paid a little more than we thought, and they have a credit balance of $_____________. We look good. The patient is happy, and they refer everyone they know. This is common sense where doing it the other way is common practice.
I love this quote I saw on a Facebook post. Don’t be upset by the results you didn’t get with the work you didn’t do. The 180 Degree Dental Journey is about getting the results the top 1% of dental practices get. Next week, we will add a little more depth with a direct connection to one of our financial modules with our coaching clients written by our lead consultant, Judy Rutty.
Michael Abernathy, DDS
[email protected]
972.523.4660 cell