Collect on Patient Expectations
by Sally McKenzie CEO
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Certainly, the spirit of the season of giving is one that should continue throughout the year, but even St. Nick has a limit, as well as clear guidelines, and probably a written policy for handling the multiple requests for special favors and demands for exceptions.
First, there are well-established limits on the holiday. Everyone knows that Christmas is just one day out of the entire year. No one is expecting a bounty of beautifully wrapped packages on April 11, August 19, or any other day except December 25. Second, the long established naughty or nice policy leaves little room for interpretation. Take your cue from Father Christmas, who’s perfected the fine art of educating his audience as well as managing their expectations.
Most people are more than willing to follow established guidelines if they know what they are. And when it comes to your collections, this is one of the critical systems that requires you to educate your patients as well as manage their expectations.
While many offices have made significant strides in establishing and upholding financial procedures, there are still far too many practices that don’t have solid collections policies. It’s like Christmas everyday for the patients, and doctors are trapped doling out thousands in “don’t-have-to-pay-today” dental care.
Consequently, reducing accounts receivables and achieving a 98% collection rate are working their way to the top of the list of must haves this holiday season in more offices than there are lights on the Christmas tree at Rockefeller Center. Take the following steps to wrap up your accounts receivables and get collections jingling all the way:
1. Find out what your accounts receivables are at this moment. You have to know where your numbers are so you can establish your collections goals. It should never be more than one month’s production. In other words, if you typically produce $50,000 per month, patients should never owe you more than that amount at any given time, and preferably, they owe you less.
Generate an aged accounts receivable report monthly that lists every account with an outstanding balance and date of last payment. Total all monies over 90 days delinquent. The percentage should not be over 10-12% of your total accounts receivable.
Examine the charges in the "current" column of the report. These are uncollected monies produced in the past 29 days. Because the practice should have a minimum of 45% over-the-counter collections for the month, there should be no more than 55% in the current column awaiting insurance reimbursement.
Always run the report with credit balances because credit balances need to be added back to the total accounts receivable. If the total exceeds your monthly production, it's a red flag indicating problems in one or more of the following areas:
- Insurance system
- Billing system
- Financial policy
- Presentation of financial arrangements
- Consistent inability of financial coordinator to ask for money
2. If you don’t have a financial policy, set the holiday cards aside and promptly focus your attention on developing a draft. Establishing a written financial policy is a priority because it’s the number one essential tool in managing your patients’ expectations. Staff input in developing the policy can be helpful, but as the owner and CEO of your business, you decide what’s in the best interest of the practice.
Don’t allow patients to carry balances. A “must have” for today’s dental practice
is offering financing, such as Care Credit, to patients. Determine how long you are willing to wait for payment. Having a policy that extends credit to patients indefinitely is too lenient and is a liability for your practice. A policy that is too strict, such as one that does not accept insurance and/or does not provide any payment options, can be a deterrent to patients.
3. Signs at the front desk or casual references during conversation do not make a policy. This one needs to be in writing, and it should be routinely given to every new patient and periodically distributed to existing patients. In addition, before any major treatment plans begin, review the financial policy with patients and ensure that they understand their payment options and responsibilities.
When patients know what to expect in terms of your financial policies and collections procedures, no one will expect you to hand over your dental care in a lovely package with all the trimmings, no matter what the season.
Next week, the number one reason financial policies break down.
Interested in speaking to Sally about your practice concerns? Email her at firstname.lastname@example.org.
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