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Improve the value of your practice through back-office automation

Dec. 21, 2017
The health-care electronic funds transfer (EFT) standard via Automated Clearing House (ACH) for both claims payments and electronic remittance advice (ERA) can save your dental practice significant money and boost practice valuation.

AT LAST YEAR’SDental Economics Principles of Practice Management conference in Charlotte, North Carolina, Roger Levin, DDS, and Allen Schiff, CPA, discussed considerations for improving the value of your practice before retiring or selling your practice. One key point they addressed was practice automation, both in treating patients and in the back office.

Reports on dental practice valuations point to the importance of having streamlined collections. (1) Technology that supports efforts for time-of-service collections, pretreatment estimates, and claims filing are key selling points when positioned to a buyer because they decrease collection times. Buyers want to see solutions that help combat a rise in uncollectable revenue, and the automation of back-office processes helps do just that.

Automation of back-office processes starts with understanding HIPAA standards. Under HIPAA, you may automate claims submissions, eligibility and benefit verifications, claims payment, and remittance advice. According to the 2016 CAQH Index Report, 74% of dental practices have adopted automated claims submission practices and 58% have adopted automated eligibility and benefit verification. (2) But the same study shows automation of claim payments has been adopted by only 8% of dental practices, and none have adopted automation of the remittance advice. (2) Full automation of the back-office processes—with claims submissions, eligibility, and benefit verification, along with claims payments and remittance advice—is a way for the dental and medical industry to save $1.9 billion annually. (2)

By embracing back-office automation of all HIPAA transactions, your practice can reduce administrative and overhead costs. Enabling your practice to leverage the health-care electronic funds transfer (EFT) standard via Automated Clearing House (ACH) for both claims payments and electronic remittance advice (ERA) can save $36,000 per year. (2) (See end of article for how to establish the health-care EFT standard in your practice.) Accepting this standard and using practice management software that supports auto reconciliation and auto posting of receivables allows your practice to do the following:

  • Improve your cash flow, as funds are deposited directly to your checking account.
  • Receive funds quickly, as many health plans pay claims accepting the health-care EFT standard faster than paper claims and checks.
  • Reduce potential for lost checks or fraud by having funds deposited directly into your bank account.
  • Update your patient accounts more quickly and accurately, which allows you to provide an accurate bill to your patients faster and decreases the risk of bad debt by enabling you to collect patient payments closer to time of service.
  • Process more transactions without additional staff.
  • Allow staff to spend more time with patients rather than bookkeeping.

The dental industry continues to move from sole proprietorships to group practices. Those practices with back-office automation will have an advantage, as the cost savings of automation and reduced overhead will be attractive to buyers. Additionally, automation will allow for easier merging into any existing infrastructure the acquirer may maintain. These advantages will be of great value to potential buyers, allowing you to command a higher asking price and improve your profitability.


Get electronic claims payments via ACH and electronic remittance advice

Follow these four simple steps to begin receiving electronic claims payments and remittance advice to support automation of your back-office processes:

  1. Contact your dental plan to enroll for the health-care EFT standard via ACH for claims payments and ERA. Receive payments directly in your bank account.
  2. Identify how to receive ERA.
  3. Verify that your practice management software will auto reconcile EFT and ERA.
  4. Request delivery of remittance information from your bank.


1. Hendrickson B. Increase the sale value of your dental practice with the right business practices and technology. DentistryIQ website. Published March 31, 2014. Accessed December 8, 2017.

2. 2016 CAQH Index. CAQH website. Published 2017. Accessed December 8, 2017.

Priscilla Holland is the senior director of health-care and industry verticals at NACHA—The Electronic Payments Association, the steward of the ACH Network.

Editor's note: This article first appeared in the Apex360 e-newsletter. Apex360 is a DentistryIQ partner publication for dental practitioners and members of the dental industry. Its goal is to provide timely dental information and present it in meaningful context, empowering those in the dental space to make better business decisions.

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