By Sally McKenzie, CEO
Here we are, still in the early weeks of 2011, and although faint rumblings of a recovery percolate on the financial horizon, we have been seeing a disconcerting return to high accounts receivables and well-oiled financial polices put on the blocks.
Now is not the time to abandon effective practice protocols. However, a few adjustments may be in order.
Follow these steps to achieve financial solvency in your practice.
Step No. 1 — Revisit the financial policy.
A plan that is too rigid will not be effective in any economy. However, that doesn’t mean you should return to the days of patient-dictated financial plans. Pay attention to what patients are telling you and, if necessary, make adjustments.
Consider incorporating the following protocols:
- Establish a relationship with a treatment financing company, such as CareCredit.
- Allow patients to build a balance on their account before beginning major treatment.
- Allow patients to pay for larger cases in two or three installments over a specific period of time. Offer a 5% discount if the case is over $500, paid in full, and will not be submitted to insurance.
Step No. 2 — Maximize over-the-counter collecting.
Make patients aware (prior to their visit) of what is to be done and what fees they will be charged, so they’ll be prepared to pay. Your financial coordinator/business administrator should be professional, matter-of-fact, positive, friendly, and should follow a well-rehearsed script to explain the services, charges, and payment options. Additionally, give a printout of services provided — along with the anticipated insurance payment and the amount of patient payment — to patients at every visit. If a patient does not pay, give him or her a return envelope and say, “This will make it easy for you to mail us your check when you get home.”
Step No. 3 — Send bills daily rather than monthly.
Every statement should include a due date (two weeks from statement date). Make sure there is a space for the responsible party to write in a credit card number and expiration date as a means of payment. Provide a self-addressed payment envelope too.
Step No. 4 — Anticipate insurance payments.
Track insurance, specifically the available benefits as well as uninsured procedures, to calculate the anticipated insurance payment. Collect the patient portion at the time of dismissal. After your software performs a validation process on each claim, send claims electronically on the day of service. Each week, generate a delinquent insurance claim report grouped by carrier so that one call can be made per carrier to check on all claims that are 30 days delinquent. Cash flow can be further enhanced by taking these steps:
- Track and process secondary insurance
- Keep signatures on file so that after EOB (explanation of benefits) is received, the patient portion may be calculated and the credit card automatically processed
- Audit submitted claims and automatically age them until they are either paid off or written off
Step No. 5 — Follow-up on delinquent accounts.
Begin delinquent account calls one day past the due date on the first statement. The manner and tone you use greatly influences the effectiveness of the call; therefore, set the tone as “working together to resolve this situation.” The caller’s key question should be, “When can we expect payment?” Enter highlights of the conversation into the computer to keep a record of collection attempts. On the same day, follow up the phone conversation with written confirmation. And finally — address the most critical collection obstacle ... team training.
Step No. 6 — Train your team.
The No. 1 reason for poor collections in most any practice is a lack of training. Provide results-oriented training designed to meet the following practice objectives:
- A 98% collection rate should be maintained for treatment being performed currently.
- For practices accepting assignment, over-the-counter collections should range between 40% and 45% of total production.
- Since it is feasible for a hygienist to treat 10 patients in one day, from whom the practice will collect zero dollars because insurance will pay 100%, it is essential that these measurements be averaged monthly to adjust for the ratio of insurance payment of benefits and patient payment.
- Practices that do not accept assignment should strive for 85% to 100% collections over the counter. Accounts receivable should be no more than one times monthly production.
- Finally, accounts receivable over 90 days should not exceed 12% of total accounts receivable.
Author bio
Sally McKenzie is CEO of McKenzie Management, a full-service consulting/coaching dental management company, providing proven management solutions since 1980. Sally is also publisher of The New Dentist magazine dedicated to dentists in the first 10 years of practice. She is a contributing editor to Dentistry Today and the publisher of The Dentists Network. She can be reached at (877) 777.6151 or [email protected].
