4.2.10 Issue #421 Forward This Newsletter To A Colleague

Nancy Caudill
Senior Consultant
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New Employee, Old Mess!

Dr. Sharon Butler– Case Study #233

Every now and then our office receives a call from a team member requesting information.  Judy from Dr. Butler’s office had the opportunity to hear Sally speak at a state convention and was impressed with her knowledge and expertise after 30 years of consulting, so McKenzie Management was where she placed her cry for help.

“Yesterday was my first day of employment here at Dr. Butler’s office. The previous front office manager left without notice and I was hired to take her place. The office is a mess and I don’t know where to start!”

Dr. Butler’s practice mess:

  • Aging Report = $156,000 (2x as high as it should be) with 50% over 90 days
  • Outstanding insurance claims over 60 days = $37,250
  • Credit balances = $24,000

Poor Judy has no idea where to start the attack on this mess. No wonder the previous employee left – she should have been fired! However, Dr. Butler was not monitoring practice statistics so she was not even aware of the situation.

Aging Report
As Judy reviewed the accounts receivable report, it was obvious that many of the account balances were over 2 years old with no payments made since the treatment was completed and no contacts made to the patient. It was suggested that these accounts be written off. The accounts that were inactive prior to 1-2 years ago and had no payments made should receive a “bookkeeping adjustment” letter. This letter would indicate that an accounting audit was completed and this account was discovered unpaid. Extend an apology for the oversight and offer the patient a 50% bookkeeping adjustment to pay their account. Attach a statement that will show the date of the charges along with a return envelope, and keep your fingers crossed that they will pay. If not, write it off.

It is reasonable to attempt to collect the recent unpaid accounts from 12 months to current. First, Judy was instructed to place a call to the patient and express her apology for the delinquent notice of their account and inform them that they would be receiving a statement in the mail in a few days. Did they have any questions?  Since many of these patients were active patients, it was important to maintain the relationship. A statement was then placed in the mail to the patient and follow-up was applied. To aid in the distribution of these statements, Judy utilized computer-generated electronic statements through the practice software to avoid the need to print, stuff and mail the statements manually.

The credit balances needed to be addressed immediately. In many states, credit balances are to be refunded to the patient within 30 days of the receipt of the overpayment. Many of these credit balances were also several years old and the patients were no longer being seen. The first task was to attempt to contact the patient, inform them of the credit balance and ask if they would like to apply it to treatment planned dentistry. If the patient cannot be contacted by phone, a check should be mailed to the most current address with an “address service requested” written or stamped on the envelope. It is possible that the forwarding address has expired and the refund check will be returned. Judy should make a note in the computer that the check was returned and give it to Dr. Butler for an adjustment in QuickBooks.

Delinquent Insurance Claims
It is unusual to find an insurance company that will honor a dental claim over 12 months, but not impossible. Judy called the insurance companies associated with the claims 12-16 months past due, explained the situation and requested consideration of the claim. The claims had to be resubmitted to those carriers that were willing to “review” the claim for payment. Claims over 16 months and unpaid were deleted and a review of the patients’ ledgers to determine what the next step should be was conducted, following the guidelines above. Fortunately, the claims that were less than a year old were resubmitted for payment or additional information was submitted as requested.

Moving Forward
New systems were put in place for Judy to avoid any future “messes” in Dr. Butler’s practice. All patients were informed at the time of scheduling their appointments how much they were responsible for, and this amount was written on the back of their appointment card.  When applicable, a Financial Options Form was completed.

When necessary, statements are electronically submitted on a weekly basis to reduce the time needed to review each one individually. Statements are also sent immediately when the insurance payment is received. A telephone call is placed to the patient when the account balance is 45 days delinquent, confirming the address of the patient and informing the patient of the balance. If no contact can be made to the patient, a message is left requesting that the patient contact the office. Unpaid insurance claims are followed up after 15 days if submitted electronically, and 30 days if submitted by paper due to attachments (the office does not have digital radiographs to allow Judy to use Fast Attach).

A system of keeping “score” was instituted in the practice to monitor the monthly practice statistics. Dr. Butler was updated in a timely manner on the health of the practice. She would not find herself in this position again – no more messes to clean up.

If you would like more information on how McKenzie's Practice Enrichment Programs can help you IMPLEMENT proven strategies, email info@mckenziemgmt.com.

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