The Dental Practice: Business Foundations Patient Financial Policies Dr. Dave Willis Dental Simulations

What Dentists Are Collecting : Percent of Production Collected Percent of Dentists 99 – 100 % 18.4 % 97 – 99 % 31.2 % 95 – 96 % 21.7 % 93 – 94 % 12.5 % < 92 % 11.4 %

Patient Treatment Decision Points Trust Believe you are looking out for their best interest Discomfort Pain control, fear of pain Time Away from work or other activities Money Not how much treatment costs, but how they will pay for it

Designing Financial Policies Balance legitimate need to collect what is owed with the appearance that all we care about is the money Practice production and profitability Increasing case acceptance Dictated by what is customary for the community Changes during practice cycle Changes with economic cycle

Poor Financial Policies Cost You Lose patronage and goodwill of patient Patients won’t pay the amount owed you Older bills are harder to collect Older bills cost more to collect You pay billing expenses (postage, staff) Inflation eats away at value of receivable Lose interest you could have earned

Losses from Slow Accounts US Dept of Commerce

Financial Arrangements New patients Emergency patients Regular patients of the practice Long term patient who has not had significant work

Front Desk Collections Ask for payment at time of service Expect payment at time of service Make it convenient for patients to pay at time of service Private area to discuss finances Counter for writing checks Pens for writing checks Credit Card acceptance clearly shown Encourage immediate payment

Encouraging Immediate Payment Courtesies (Discounts) Marketing Plan Payment Incentive Cash Payment 5% patient portion Senior Citizens 5% patient portion 5% additional cash Managed Care Appropriate “Discount” Friends & Family 10-25% patient portion

Front Desk Collections Cash payments Personal Checks Charge cards Patient Insurance Plans

Cash Payments Account for all cash on computer Prevent embezzlement Tax implications Have a change fund available Remove all cash at the end of the day Bank or safe

Personal Checks You don’t have to accept personal checks If you accept personal checks, there are certain rules you must follow Treating people fairly and equally Individual confidentiality

Using Credit Cards Holdback (aka “discount”) 1.0% - 5% Depends on Financial Vendor Amount of billing Average size of case Account as “Bank Charge” Balance with collection ratio Encourages payment Credit card society Easy Pay Similar to hotel “pre-charge”

Office Insurance Collections Know your patients’ policies Policy book, Web-based, FAX Track paperwork, FOLLOW-UP Decide Assignment of Benefits Submit claims daily Mail, Electronic, FAX Use pre-treatment estimate of benefits (NOT pre-authorization)

Sections of Your Financial Policy Credit Policy Who doesn’t have to pay cash at time of service? Who gets an interest free loan? Collection Policy How will you collect money owed you but not yet paid?

Credit Policy Easy (Loose) Strict (Tight) Large A/R Large Uncollectibles High production Strict (Tight) Cuts down production People who would pay are not given the chance A/R & Uncollectibles less of a problem

Decisions on Your Credit Policy Will credit be given to patients? Which patients will NOT be given credit? Will a credit bureau be used to qualify patients? Who decides who gets credit? Who will discuss / arrange credit with patients? What payment plans will be offered? What down payment is required? Is there interest or finance charge?

Extended Payment Plans Computer or office generated Written and signed Copy to patient, original in chart / financial record Consider health credit card or bank plan Set limits (example) < $200 None $ 201 - $1,000 3 months > $ 1,000 6 months or Bank Plan

Patient Financing Plans Care Credit www.carecredit.com Dental Fee Plan www.feeplan.com Dent-a-Med www. helpcard.com Healthcare Creditline www.healthcarecreditline.com PFS Patient Financing www.p-f-s.com Unicorn Financial Services www.unicornfinancial.com

Collection Policy Normal Accounts Statements Most Common Letters Problem accounts Telephone Most effective for problem accounts

Statements: Decide a Process Time during the month After close of month Multiple times per month Normal hours or special hours Who gets billed Minimum account size “Send no bills” Insurance copays and deductibles Definition of aged accounts E-Bills

Delinquent Accounts Definition of “delinquent account” Aging the accounts Risk management problems Countersuits for malpractice Represent FAILURES of: The patient to pay The office financial policy

Purpose of pursuing delinquent accounts Get the money owed to you Patient relations Retain the patronage and goodwill of the patient / family Encourage the patient to leave the practice Avoid lawsuits Personal satisfaction / vengeance

Collection Techniques Delinquent Accounts Collection Agency Retainer fee ($200 / yr) Percentage of collected accounts (e.g. 50%) Small Claims Court Public notice Doesn’t guarantee payment, even if you “win” Lawyer Selling Accounts Receivable (Factoring Service)

The Dental Practice: Business Foundations Patient Financial Policies Dr. Dave Willis Dental Simulations