6 simple tips to improve collections in your dental office

October 15, 2014

There is a common belief among patients that they shouldn't have to pay for their dental treatment at the time of the visit because the dentist has plenty of money or that their insurance company will pay the bill. Patients will often conveniently forget to bring their checkbook or credit card with them or will promise to pay when they get paid on Friday. To make matters worse, many dentists employ staff that are 'too soft' or too shy when it comes to asking for and collecting the money due from a patient. Many dentists fall short in the collection process too because they feel collecting on delinquent accounts becomes more hassle than what it is worth and it's just easier to 'write off' the bad debt. As a result, dentists lose tens of thousands of dollars every year. Not anymore!

In order for a dental practice to operate, an effective collections policy must be in place and enforced. The follow tips will help you to develop and implement a collections policy.

1. Straightforward Financial Policy

The Financial Policy shouldn't read as if you are negotiating the terms of a mortgage or purchasing a million dollar company. Create a clear, easy-to-understand policy that includes payment options, addresses patients with insurance and how you expect to be paid, and incentives for patients to pay at the time of visit or before treatment has been completed.

Have each patient read and sign the financial policy. Provide a copy to the patient and keep a copy with their records.

Patients will often try to negotiate the payment terms or delay paying by asking to be billed. Offering multiple payment options will make it easier for patients to pay at the time of visit. Many dentists partner with lending services that offer patients with approved credit, the ability to pay for treatment over time.

Patients should be made aware that payment is due at the time of visit. This is done through correspondence (include on statement), signs in the office, when an appointment is scheduled or confirmed, etc.

2. Financial Arrangements Prior to Treatment

The proposed treatment plan should be in writing, including the estimated cost of treatment. If the patient has insurance, provide an estimate of what the insurance company is expected to pay and the amount the patient is responsible for. Include a disclaimer for unexpected treatment. Financial arrangements should be made and in writing prior to treatment.

3. Insurance

For many dental practices, participating with dental insurance plans accounts for a major percentage of income. It can also be a source of lost income. It is important that patients pay for their portion of the treatment not covered under their policy at the time of visit.

Designate one staff member to follow-up on insurance claims – accounts receivable, accurate and timely filing of claims, and handle disputes.

4. Professional & Confident Staff

Discussing money with patients is never easy. The last thing you want, is to have a staff member responsible for collections who is a push-over or lacks confidence when asking for money. Patients will spot the weakness and use it to their advantage. The person should be professional, even if the patient is nasty and/or difficult, and able to hold firm to the collection policy set in place. Designate one staff member responsible for accounts receivable. Request a weekly report on the status of accounts.

All staff should be up-to-date on all financial, insurance and collection policies. The front-office staff and back-office staff need to communicate and work together to enforce payment policies.

The dentist needs to stand by the staff and serve as back-up if need be. Many patients will try to negotiate with someone else other than the front desk staff where money is concerned. Many patients will also want to discuss terms directly with the dentist. Make sure a clear-cut policy is in place to address this issue and the staff works as a unified front.

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5. Collections Procedure

It is important to develop and implement a collections procedure that is strictly adhered to. Patients should be made aware of their financial responsibility, terms of payment, and the staff should have a system in place to collect on money owed. Have a system in place that addresses delinquent accounts.

Make sure you know the law for your state in regards to collection proceedings. Consider implementing a finance charge for delinquent accounts. Choose the right staff member for making collection calls (not everyone is cut-out for this role.) The person should be professional, confident, and not emotional. You do not want someone who is easily swayed by a 'hard luck' story, patient tears, or gets angered or frazzled when confronted with a difficult patient.

Keep detailed accounts of the patients payment history. This helps when a staff member needs to call and work out payment arrangements on a delinquent account.

Do not be afraid to turn the delinquent account over to a collections agency. If this is part of your collection policy for delinquent accounts, then adhere to it! Many dentists shy away from this because they feel sending an account to collections will ruin the relationship they have with the patient and the patient will seek treatment elsewhere. They fear patients who don't leave the practice on good terms. Who wants a patient who doesn't pay for treatment? The dentist needs to realize that the patient damaged the relationship by not paying. There is no shame in getting paid for services provided.

6. Billing Software

Many dentists use one of the many types of accounting and billing software programs available to keep track of accounts receivable. Invest in a good program and pay for the technical support. It will save you a lot of money in the long run. Set software privileges that allows only for the dentist and/or spouse to delete an account. All other privileges should be assigned to each staff member according to the task they need to use the software for.

Keep a notepad or 3 ring binder that contains important notes about the software. This will help keep everyone who uses the software informed and it serves as a reference point for any new staff members. By following these 6 tips, you will be well on your way to recovering lost income and sealing the gaps in the collection process where money once action and get paid for the services you provide!

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