Are Production Adjustments Hurting Your Practice?
You probably don’t spend a lot of time thinking about production adjustments and how they impact your practice. You make adjustments when you need to and expect team members to do the same. The problem is, it’s easy for these adjustments to get out of control and really start eating into practice revenue.
What exactly are production adjustments? They can be made from your practice management software with codes that cover Credit Card and Debit Adjustments, Miscellaneous Adjustments, as well as Refund and Insurance Adjustments, to name a few. These adjustments reduce gross production; your practice collects money based on net production.
If your practice makes too many production adjustments or doesn’t use them correctly, it could cost you thousands of dollars every month. So what can you do to avoid this in your practice? Here’s an overview of how these adjustments can lead to problems, and tips to keep them from hurting your bottom line.
You Give Away Too Much Dentistry
Most dentists have no idea how much dentistry they give away each month. Decide just how much free dentistry you can afford to offer and then stick to that number, no matter how many family and friends ask for a discount.
Bad Debt and Collection Adjustments Are Too High
Incorrect Insurance Adjustments
While there is no industry standard for PPO adjustments, some offices reduce their gross production for each PPO plan so very few adjustments need to be made to posted accounts. Other practices post their office fees, which requires a much higher PPO adjustment once the insurance check is received.
It’s important to make sure your Financial Coordinator understands how to correctly post adjustments as well as how much to collect from each patient. Provide the proper training and encourage this team member to speak with insurance representatives. This will help him or her learn how to properly adjust patient accounts and determine exactly what patients are expected to pay.
To help avoid problems with adjustments and improve how you use production and collection adjustments, I suggest creating more specific adjustment codes. Here are some examples:
Production (Credit) Adjustments
Collection (Debit) Adjustments
It’s important to know how much money you’re losing to adjustments each month. Follow these tips to get adjustments under control and start bringing in more revenue.
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