2 Tricks That Treat Your Cash Flow!
Dr. Abbott contacted McKenzie Management with concerns about her practice’s cash flow. She felt that she was staying busy, she had adequate numbers of new comprehensive patients, but for some reason that she could not put her finger on, the cash flow was not indicative of her hard work. She asked that we visit her practice and work with her for six months to find the “leaks in the bucket.”
Dr. Abbott’s practice statistics:
The statistics above were facts that Dr. Abbott was aware of, but there were other facts about her practice that she was not aware of. Below are two tricks that Dr. Abbott learned about her practice that increased her revenue and put more money back into the practice. As a result, she was able to increase the salaries of her team, introduce computers into all the treatment rooms and go “chartless” and take more money home for her family.
Trick #1 - Collect a “Guestimated” Patient Portion At The Time Of Service
To determine what % of OTC should be expected in Dr. Abbott’s office, we performed the following steps:
$300,000 / $800,000 = .375 or 37.5% to be considered OTC
Now that Dr. Abbott knows how much should be collected on average every month OTC, she can implement a system that will allow her Schedule Coordinator to reach this goal.
1. When an appointment is made for a patient that requires a “patient portion,” ALWAYS guestimate the patient’s portion and inform them of the amount that will be due at their next appointment.
2. Write this amount on the back of the appointment card as a “friendly reminder.” Here is the script: “Mrs. Jones, just as a reminder, I will write down your portion due at this appointment on the back of your appointment card.”
3. Include this amount in the appointment note in the computer. This will serve as a reminder when the patient is checked out on how much to ask for (assuming that nothing changed clinically) and also allows another team member to check out the patient should the Schedule Coordinator be away from her desk or out of the office.
Notice that I said “guestimate” the patient’s portion. There is no guarantee how much the insurance carrier is going to pay, so we are asking the patient to pay an amount with the understanding that if the insurance pays something different, we will inform them.
I have found, in over 30 years of working in the dental field, that patients want to know how much they are expected to pay. They understand, when informed properly, that it is a “guestimate” and they are responsible for any remaining unpaid balance. I have also found that it is not necessary, in most cases, to explain all the details involving deductibles, downgrading of composites to amalgams, fee schedule differentials, etc. They just want to know how much they need to be prepared for at their next visit.
Trick #2 - Stay On Top Of Unpaid Insurance Claims
A healthy Accounts Receivable in a family dental practice that accepts insurance assignment would be no more than 1x the monthly Net Production. Dr. Abbott’s A/R was 1.85x. The means that she had over $56,000 on her Accounts Receivable that should have been collected. Upon further review, after printing the Outstanding Insurance Claims Report, over $40,000 of that amount was outstanding claims over 60 days!
To avoid Dr. Abbott’s loss from happening to you, ask your Financial Coordinator to run the Outstanding Claims Report every month and all claims that are over 30 days (15 days if they are submitted electronically) should be reviewed and the insurance carrier should be contacted to check on the status of the claims. Ask for the contact’s name and make a note on the claim itself of the results of the call. Stay on top of this.
Here is hoping that these two tricks will serve you well. Happy Halloween!
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