4.6.12 Issue #526 info@mckenziemgmt.com 1-877-777-6151 Forward This Newsletter
 

Cash Flow 101 - Get Paid
By Sally McKenzie, CEO

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Billing - it is a fundamental function of running a business. Ideally, payment is collected at the time that dental services are delivered. However, in some cases, patients with a balance must be sent a bill. So why is it that some practices still struggle with this routine business system? Because it’s the “system” that is often lacking.

Let's review the basics. First, every bill sent should include a specific date on the statement that stipulates when payment is expected. Ten days from the date on the statement is reasonable and encourages the patient to pay promptly rather than set the bill aside until later. Second, every bill sent should include a self-addressed payment envelope and include an area where the patient can write in a credit card number if they prefer. Third, bills should be sent daily, not monthly. In other words, your billing cycle is 28 days. Services rendered May 1 are billed on May 28. Services rendered May 2 are billed on May 29, etc. Of course, in an ideal world - there are no bills. Patient has treatment, patient pays. We all know that is the TOP priority.

In today's marketplace, more dental practices are accepting insurance. This can be beneficial for both the patient and the practice, provided practice staff are prepared to follow through. In practices that are accepting assignment of benefits, we often find that financial coordinators do not collect the patient's portion at the time of service. Instead they file the claim, wait for the insurance company to pay, and then bill the patient for their portion. There are generally 1-3 reasons for this: The staff believes that the office software does not allow for the entry of data on different insurance companies, and/or it does not estimate the insurer's portion of the bill, and/or the staff do not trust the software.

More often than not, the computer can accommodate this information but the function was not set up when the system was implemented and will require a call to the software company. In other cases, the employee simply needs necessary training to learn how to do it. And in some practices, the employee knows how to perform the function but contends s/he is too busy to gather the information and enter it into the system.

For doctors who rely on business staff to bill and collect payment, this can become a significant issue. Practice owners often are oblivious to the problem until something serious happens that draws attention to cash flow problems. Without appropriate checks and balances in the practice, it becomes easy for business staff to just blame the “nasty” insurance companies or “irresponsible” patients. However, if effective systems are in place, practices can help to ensure that payments - insurance and others - are received promptly and efficiently.

One of the easiest steps a practice can take is to include a one page insurance coverage questionnaire in the new patient packet. The form asks the patient to provide necessary insurance information and directs the patient to contact his/her insurance company to determine the services covered and the amount the plan will pay. From there, this information should be entered into the practice computer system. And without exception, patients should be asked for their portion of the fee at the time of service.

Additionally, offices that accept insurance must have a financial coordinator who is trained to send claims electronically. This is extremely important to the practice both in terms of ensuring that the practice receives payment from the insurance company promptly, and in terms of significantly improving efficiency of the filing process.

It is essential that the financial coordinator review delinquent insurance claims weekly. The delinquent claims should be grouped by carrier so that one phone call can be made to check on all claims that are 30 days or more delinquent. Speaking of delinquent payments, patients that have not paid their bill should be notified 30 days after services were performed. Messages should be polite and courteous and they should be customized for the specific patient. The more personal the message, the more effective the communication will be. For example:

Dear Ms. Wheat, (You can use the patient's first name if you know him/her well and they have been a patient for many years - Dear Jennifer, )

We wanted to alert you that we did not receive your payment on March 15 as requested. If you are experiencing financial difficulty, please contact Peggy in our office. Otherwise, we would appreciate your prompt attention to this balance by sending payment before April 6.

For more scripting, GO HERE

Before contacting patients, do your homework. Review the account history. Confirm that there is not an insurance issue that might be delaying matters, and make sure the practice is not in error. Never apologize for requesting payment. A dental practice is a business that cannot effectively deliver necessary services to patients without necessary cash flow.

For more information on this topic and for additional Dental Practice Management info, visit my blog: The Lighter Side.

Interested in speaking to Sally about your practice concerns? Email her at sallymck@mckenziemgmt.com.

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