Credit guidelines: The "secret weapon" successful practices use to reduce stress and increase collections

By Jan Keller

When was the last time you and your team had a meeting to review and collaborate on your expectations regarding collections? If you’re like many, the honest answer is “never.” No surprise, then, that most administrative team members are frustrated. Their doctor wants them to “collect the money” and “make sure the patients pay,” but that is the only guidance they are given. Even worse, doctors often sabotage the efforts of the financial team by making special arrangements with the patient in the treatment room, putting them in an uncomfortable position when the patient informs them:

“Oh, the doctor said I only have to pay X.” Or “The doctor said I can make payments whenever I can afford them.”

If this sounds like your practice, now is the time to sit down and discuss how your current payment arrangement system is working, and what you can do to improve it, especially with the economy making treatment acceptance more challenging than ever.

The good news is that implementing an effective payment system is not difficult, if you follow a few simple rules. First and foremost on the list is establishing credit guidelines that everyone knows and has agreed upon – and that everyone, doctor included – follows.

Good credit guidelines fulfill a multitude of objectives, including:
• Provide a written document for internal use that describes your guidelines in detail
• Develop parameters to measure job performance for the financial coordinator
• Establish a training protocol for new team members
• Explain how payment arrangements will be conducted with your patients
• Allow for flexibility for your established patients to make their dentistry affordable
• Address your philosophy on credit and team members’ philosophy. If you do not agree on these core values, your guidelines are doomed to fail.

Other areas that should be discussed with the entire team:
• Whether or not you offer a prepayment courtesy
• Whether or not you quote a fee range for new patients
• How you handle the dental “shopper”
• Whether or not patients will be required to complete a credit application for third-party financing, such as CareCredit
• When and if billing charges apply (Make sure you check with your lawyer/accountant as to how to apply these charges if you have not established this in your practice previously.)

Insurance issues must also be discussed. It is vital that the entire team understands the doctor’s philosophy on this subject, and how submitting claims will work in your office. Do you accept assignment of benefit, for instance? Are you participating with insurance carriers and adjusting the difference between your fee and the allowance of the insurance carrier? If so, how does that translate into expectations of payment from the patient?

Your credit guidelines should also address how to handle these common occurrences:

Broken appointments and late cancellations: Are patients charged for a first offense? Second? If so, how will you notify patients of this practice?

Bounced/returned checks: Will charges be applied and how will financial arrangements be handled for these patients in the future?

Emergency patients: Your entire team should know your expectations for emergency patients and how their finances will be handled. Are finances different if they are an established or a new patient?

The patient “hand off”: Doctor, are you comfortable explaining your fees but get caught discussing how the patient will pay for it? Have you and your team practiced your part in handing off the patient to the team member whose job it is to discuss and negotiate payment arrangements? Don’t get caught up in making deals, which devalues your clinical expertise and puts your financial coordinator in a corner.

Arm your team with this “secret weapon” and put the stress of < and undocumented payment arrangements behind you forever. Your team will thank you, your patients will thank you, but most of all, you will begin to get paid fairly and consistently for the excellent dentistry you and your team provide.

Wouldn’t that be nice?

Janice Keller has 25-plus years of experience in dentistry – clinically, and as an office manager and software trainer. Now, as a practice management consultant, she provides high-quality, customized practice development and education to clients and their teams. Jan’s clients praise her ability to recognize, understand, and adapt to their specific training requirements, and to provide the necessary tools and skills they need to meet their practice goals. Jan is certified by Bent Ericksen & Associates in employee law compliance, and is also certified by the Institute of Practice Management. She is a member of the prestigious Speaking/Consulting Network and the Academy of Dental Management Consultants. She is also an independent certified SoftDent trainer. Contact her at [email protected].