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The Dental Practice: Business Foundations
Patient Financial Policies Dr. Dave Willis Dental Simulations
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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 %
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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
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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
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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
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Losses from Slow Accounts
US Dept of Commerce
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Financial Arrangements
New patients Emergency patients Regular patients of the practice Long term patient who has not had significant work
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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
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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 % patient portion
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Front Desk Collections
Cash payments Personal Checks Charge cards Patient Insurance Plans
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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
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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
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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”
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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)
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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?
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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
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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?
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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 $ $1, months > $ 1, months or Bank Plan
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Patient Financing Plans
Care Credit Dental Fee Plan Dent-a-Med www. helpcard.com Healthcare Creditline PFS Patient Financing Unicorn Financial Services
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Collection Policy Normal Accounts
Statements Most Common Letters Problem accounts Telephone Most effective for problem accounts
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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
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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
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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
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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)
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The Dental Practice: Business Foundations
Patient Financial Policies Dr. Dave Willis Dental Simulations
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