According to a survey, dentists perceive past due accounts as the biggest threat to their revenue cycle. Past due debt should not be an accepted way of doing business. If you have slow or lazy payers, you need to take necessary measures to reduce account receivable days.
Don’t be complacent when it comes to bad debt, fearing that the patients will leave if you follow-up with them regarding their non-payment. It is very important for dentists to understand account receivables in order to run their practice because it pays for their bills, facility and their salary. Good account receivable management is possible only when you focus on discovering and correcting inefficiencies in office practices that lead to denied claims and lost revenue.
How to enhance payment collection?
- It is important for dental practices to have a strict payment policy in place
- This policy should be explained to patients at the time of the initial phone call
- Office portfolio should also have mention of this policy so that they are aware of the same
Dental practices must set financial arrangements and expectations clearly to their patients. Patient care and dental billing is important but providers also need to take some time out to educate patients on their treatment and payment options. In order to enhance collections, proper forms and documentation should be used to set patient expectations.
Dentists also need to know what their accounts receivable total is. Don’t leave this matter to your front desk employees. Remember, if your AR is in order, your staff will take not more than five minutes to review a report; however, if AR isn’t healthy, several problems will arise.
Never overlook receivables:
It doesn’t matter how much revenue your dental practice is generating. What matter is how much you are getting to keep? Even if cash flow of your dental practice is good, never overlook receivables. You need to observe if collections are reasonable or if the number of patients paying 60 or 90 days late is increasing. You must hire an accountant to create a policy for collections whether or not your practice is thriving. Don’t be in the lending business rather review internal controls over receivable adjustments and cash.
Generally, your AR should be less than one month’s revenue. Your office may not be doing their work efficiently if the total receivable exceeds monthly revenue. You also need to follow-up your insurance claims if insurance receivables are exceeding your 30 day receivables.
Too much to handle? Hire a billing partner:
If AR management becomes daunting due to lack of time, money and resources, hiring a dental billing partner makes sense. It is important to have a billing company like Medicalbillersandcoders.com that has a team of skilled billers and coders who are proficient in clearing unpaid claims, submitting timely claims and offering assistance in reducing AR days.
MBC has been helping dental practices across 50 states in the US achieve healthy AR, maximum revenue and minimum claim denials.