Collect More at the Time of Service
Collecting money from patients for services rendered can be a struggle, which is why it’s so important to have policies in place and to properly train the team member entrusted with this important task.
To help boost collections and your cash flow, I suggest finding a way to grow Over the Counter, or OTC, payments – which are payments made at the front desk via credit card, cash or check for services provided that day. Taking these payments right away means you don’t have to bill patients later, saving time and the frustration that comes when patients forget to pay.
Sound good to you? First, you need to determine what percentage of payments should be made OTC. The industry standard is 45% of the month’s net production and the goal is to have patients pay the portion insurance companies won’t cover. Use this equation to determine exactly what your OTC payments should be:
Total insurance $ for the month / total of all $ for the month = % of insurance payments. 100% minus insurance % = patient payments.
Now that you know what percent your practice should collect over the counter, how do you determine which payments are made OTC vs. online, through the mail, by phone or walked in? You’ll need to track specific payment types and make sure they are posted properly so you can accurately calculate the percentage.
Here’s the formula you’ll use to determine your practice’s OTC payment percentage: Total of all the OTC payments / Net Production = % of OTC payments. You must generate two reports to get this information: Payment Summary, Collections Summary or Accountants Earnings Report, and a Production Summary, Monthly Daysheet, or Register.
Keep in mind, calculating the net production can be tricky. If your adjustments aren’t set up correctly, your net production probably won’t be accurate. Not sure how to calculate your net production? Reach out to your computer software support staff for help.
You might ask why not compare OTC collections to total collections. If you’re successfully collecting old debt, this month’s collections could be higher than your net production. This indicates 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.
OK, now you know how to determine what your OTC should be. Here’s how you can improve it:
Re-educate your patients: If your patients have been sending in their payments or paying online for years, they’re not just going to automatically start paying at the time of service just because you want them to. You’re going to have to change the way things are handled at the front desk, which means training your Scheduling Coordinator.
When scheduling an appointment, the Scheduling Coordinator should say:
“Mrs. Smith, here is your appointment card for your next visit. Your portion of payment at that time will be $180. I wrote it down on the back of your appointment card as a courtesy.”
This is a subtle way of telling Mrs. Smith you will be asking for the $180 at the next visit. Now, of course, this doesn’t guarantee she’ll pay, especially if she’s not used to it. This also means training your Financial Coordinator, who should say this when checking Mrs. Smith out at her next visit:
“How did everything go today? I understand the doctor completed tooth-colored fillings for you. Your portion today is $180.”
Determine how much you should ask patients to pay. Some team members might be uncomfortable collecting payment from patients before they know what their insurance will cover. How will they determine what the charge should be? That’s simple. They guess. Don’t waste time with insurance statistics and trying to figure out the exact amount. I suggest basing the patient’s portion on 30-35% for fillings, perio and extractions, 60% for crown and bridge and 90-100% for preventive. Throw in an additional $50-$100 at the first of the year for a deductible for everything except preventive.
Here’s what your Financial Coordinator should say after giving patients the estimate:
“I really don’t know how much your insurance is going to cover. How about you and I agree your portion today will be $180 and if there is any difference after I hear from your insurance I will let you know. Does that sound good to you?”
This tells the patient that your Financial Coordinator is doing her best to determine the correct amount, but because you are not insurance experts, there’s a chance you might be a little off.
Collecting more money over the counter is a great way to increase cash flow and reduce stress associated with collections. Determine what your OTC should be and follow these tips, and you’ll soon find more patients willing to settle their bills at the time of service.Forward this article to a friend
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