How to Collect More at the Time of Service
Struggling to collect from patients after treatment has been more difficult this year than in years past with the downturn in the economy. If you couple that with lack of training of the person collecting the money, no system and no protocol, collections suffer.
Over the Counter payments are credit card, cash and check payments made at the time of service for those services provided that day. All other payments are made after the time of service, such as insurance payments, checks received by mail, credit card payments by phone, and cash payments brought in to pay on a previous service. The term Over the Counter can be misleading; to clarify, there are times that a payment is taken over the counter for services that were provided at an earlier time. Yes, it physically came in over the counter, but this is not an “OTC” payment because the service was not provided on that date.
What % should your OTC be? Standard in the industry is 45% of NET production for the month. This may seem too high to you if you are an insurance-driven practice. If you want to confirm exactly what yours should be, do this simple math equation:
Total insurance $ for the month / total of all $ for the month = % of insurance payments. 100% minus insurance % = patient payments. The practice goal should be that whatever is not paid by the insurance companies is paid at the time of service, better known as Over the Counter. Now that you know what % you should be collecting OTC, how do you know what patient payments are made OTC vs. mail, walked in or by phone? You will need to set up specific payment types to track this such as, check OTC, check by mail, etc.
Post the payment properly in order to calculate the percentage accurately. Finally, at the end of the month, here is the formula: Total of all the OTC payments / Net Production = % of OTC payments. How do you get this information? Two reports must be generated. A Payment Summary, Collections Summary or Accountants Earnings Report and A Production Summary, Monthly Daysheet, or Register.
Calculating the “net” production can be tricky because if you don’t have your adjustments set up correctly, your net production may not be accurate. If you are not aware of how to obtain your “net” production, contact your computer software support staff.
The purpose of not comparing your OTC collections to total collections is if you are doing a good job of collecting old debt, your collections this month may be higher than your net production. As a result, this indicates that there was more money coming into the practice that was not OTC as a result of production. It will reflect a lower % of OTC than it really is.
You now have the tools to calculate what the OTC should be. Here are some tips for how you can improve their OTC:
1) Inform your patients and re-educate them. If you have been allowing them to mail their payments in for the past 20 years, you have to change the way you do things at the front desk. When your Schedule Coordinator makes an appointment for Mrs. Jones, she says: “Mrs. Jones, here is your appointment card for your next visit. Your portion at that time will be $167 and as a courtesy, I wrote it down on the back of your appointment card for you.”
This is a very subtle way of informing Mrs. Jones that you will be asking for $167 at her next visit. Does this mean she will pay? If she hasn’t been paying for the past 20 years, maybe not! However, when Mrs. Jones returns for her next visit and the Financial Coordinator checks her out, she will say: “Mrs. Jones, how did everything go today? I understand we completed the tooth-colored fillings for you. Your portion today is $167.”
2) How do you know how much to ask Mrs. Jones to pay? You guess. Too many front office employees get bogged down in insurance statistics. They lose focus of what they are really trying to do, which is to treat the patients with kindness and fairness, be as efficient as possible, and collect 45% OTC. It is all simply a “guesstimate” of how much the insurance company is going to supplement. Base the patient’s portion on 30-35% for fillings, perio and extractions, 60% for C&B and 90-100% for preventive. Throw in an additional $50-$100 at the first of the year for a deductible for everything except preventive.
“Mrs. Jones, I have no idea how much your insurance is going to help you with this. How about you and I agree that your portion today will be $167 and if there is any difference after I hear from them, I will let you know. Does that work for you?”
Don’t have the Financial Coordinator become an insurance expert. The less the patient thinks she knows, the less they will expect her to know. This is a good thing! Share this article with your Financial and Schedule Coordinators. Determine what your OTC should be…and increase your cash flow!
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