Money Matters By Janice Lewis Click the play (arrow) button to advance to the next slide.

The Funding Of Dental Care Who pays? Group Dental Plans Individual Dental Plans Medicare and Medicaid Uninsured Patients Patient who take part in a group dental plan have dental benefits that are sponsored by their employer. An individual dental plan is a plan that is purchased by an individual directly from an insurance company. Medicare and Medicaid are two areas under the Social Security Act that provide coverage to citizens for dental care. Patients without dental insurance are responsible for the full amount owing for their dental treatment at the time of their appointment.

Types of Insurance Plans Fee-for-Service (Dental Indemnity Insurance) Usual, customary and reasonable fee Managed Care Plans Dental Health Maintenance Organization Dental Preferred Provider Organization Direct Reimbursement Plan Individual Practice Association Fee-for-service insurance plan is where the patient pays the dental provider and then submits a dental claim directly to the insurance company for reimbursement. This also known as dental indemnity insurance. DHMO is very similar to a HMO organization, where the dental providers have contracted to provide services to the plan members. UCR is a fee method where the insurance company reimburses the patient either the dental providers fee or the UCR fee. A direct reimbursement plan provides reimbursement to the plan member from the employer of the self-funded plan.

Dental Insurance UCR plan includes: Routine fee charged to the patient by the dentist, Midrange fee charged for services provide by the practitioners with from similar geographic Fee determined by a third party based on special circumstances. Schedule of benefits is a list of procedures and dollar amounts covered by an insurance company. The patient is responsible for the difference between the charges and what the carrier pays.

Dental Insurance Fixed fee schedule is established schedules, usually by government assistance programs, for any treatment received by the patient. The patient is responsible for the difference between the charges and what the carrier pays. Preferred Provider Organization is a plan with a list of dentists who have a contract with the insurance company that states the dentist will only use the fee schedule preapproved by the third party.

Filing Insurance Claims Assignment of Benefits Coordination of Benefits Electronic Claims Submission Predetermination Explanation of Benefits Dental offices that deal directly with a patient’s insurance company to obtain payment for treatment rendered are said to accept assignment of benefits. Having two insurance plans means the coordination of benefits will apply to this patient. Electronic data interchange is the electronic interchange of business information using a standardized format. When a patient requires major dental services and the patient would like to have the insurance benefits to cover the cost, the dental provider submits a predetermination of benefits form. Once the claim has been received an explanation of benefits (EOB) is sent to the dental provider.

Procedure Codes Accurate recording and reporting of dental treatment is ensured by a set of codes that provide a consistent format to use when billing insurance companies for dental treatment provided. The Code on Dental Procedure and Nomenclature is reviewed and revised on a regular basis to reflect the changes that occur regularly in the dental industry.

Bookkeeping Systems Computer Bookkeeping System Manual Bookkeeping: One-Write System Journal Sheet Charge and Receipt Slip Ledger Card Computer bookkeeping software should include element necessary to maintain accurate accounts receivable. The one-write is a manual system of account management that uses a pegboard and carbon forms, on which transactions are recorded. A journal sheet or day sheet is placed first on the pegboard. The charge slip is a small portion of the receipt. The ledger card is the written record of financial transactions for each patient.

Extending Credit and Collecting Payment Collecting Overdue Payments Collection Policies and Procedures The office administrator is the person who maintains the accounts receivable or patient financial records, which is money owed in the practice and the financial records of the practice, which is money owed by the dental office or accounts payable.

Check Writing Parts of a Check Types of Checks Money order or postal money order Bank draft or cashier’s check or certified check Order check Counter check Traveler’s check Teller’s check Checks generally contains the following elements; name, address and phone number of the account holder, check number, account number, date of issue, payee, amount of currency in numbers and written, signature of the account holder, bank name and address and memo. Checks used for business purposes are usually attached to a check stub and kept in a binder-style checkbook to keep them all together.

Petty Cash A petty cash account is kept for these purposes: Courier costs Stationary items Coffee-room supplies Taxi fare for patients Petty cash voucher Number, date, description, amount paid, tax amount, signature of the person being reimbursed and signature of the person responsible for petty cash. The use of the petty cash is at the discretion of the dentist. There is always a set amount of money in the petty cash fund. Each time money is disbursed from petty cash, there must be a petty cash voucher completed that corresponds to the amount of cash disbursed.

Accounts Payable System Computer System Check writing component Pegboard System An advantage of using a computer accounts payable and check-writing programs is that having all of the financial information in one software program will allow for the compilation of financial reports with ease. One disadvantage is that the computer system of check writing can be much more time-consuming than the manual systems a result of operator error and the need for correction. A check register sheet is used on the board, along with a ledger card for the employee or vendor for whom the check is being written, as well as a check with a strip of carbon on it so that the information can be written once and recorded in three places.

Bank Deposits Preparing Checks for Deposit Making a Bank Deposit Signed on the back of check Stamped “deposit only” Making a Bank Deposit Ensure the check amount exactly Prepare the deposit in a quiet area of the office Total amount being deposited should be equal to the total amount of payments received. The dental administrator should be familiar with the standard procedure at the office on preparing checks and making bank deposits.

Bank Statements and Account Reconciliation A record of transactions, such as deposits and payments by check, that have been processed on the bank account in a 1-month period. Reconciling a bank account means that the statement, the checkbook and the monthly ledger sheet agree. Reconciling the business checking account will provide a verification of the amount of money in the account.

Electronic Banking Banking using the computer Use of debit machines is one way that electronic banking is used in the dental office. Use the ATM for daily bank deposits. Online banking can be performed by the dentist or office manager to transfer funds between accounts or pay bills.

Time Sheets/Cards To provide the employer with a record of the employee’s hours worked for the pay period. Information found on the time sheet/card Employee information Pay period start and end date Start time and end time Breaks taken Overtime hours Employee signature Some employees recommend the employee fill out a time sheet or time card on a daily basis and submit to the supervisor on a specific date consistent with the pay period.

Types of Payroll Systems Computerized Payroll System Accounting software program that allows for paying vendors and receiving payments. Can calculate deductions from employee paychecks. Submit to the IRS for the employer. Manual Payroll System The withholding of taxes deducted from the employee paychecks and submitted to the Internal Revenue Service (IRS) is the responsibility of the individual who makes up the payroll checks, which is often the dental administrator. A payroll service is an outside agency that issues all paychecks to the company’s employees.

Legalities Involved With Payroll The employee file should contain the following information: Initial resume or job application Reference check form Pay rate Performance evaluations Completed W-4 forms These documents must remain in the employee file and must be kept up to date.

Tax Withholdings Deductions should include the following: Federal, state, local incomes taxes, Medicare and Social Security Some of the optional deductions are: IRA—individual retirement Union dues Employee funds Employee loans Benefit plans Each paycheck an employee receives will be accompanied by a stub that lists details of all the deduction taken by the employer.

Calculating Payroll and Remittances Each employee’s paycheck should be calculated in its entirety before moving to the next employee’s paycheck. Gross pay (hours worked multiply by hourly pay rate)- total deductions = net pay W-2 Form Regarding the deduction that each employee has paid and yearly earnings. This calculations can be made by using the one-write system, which allow you to write the employee’s earnings information only once and record it in three places which can calculate deduction for you or allow you to enter the information and maintain a record of it in the appropriate employee file.

References Dental Assisting: A Comprehensive Approach; Phinney, D.J., Halstead, J.H. (3rd. Ed.) Thomson /Delmar Learning, 2008 The Administrative Dental Assistant; 2nd Ed., Linda J. Gaylor, Saunders/Elsevier, Philadelphia, 2007