This article originally appeared in Dental Office Manager Digest e-newsletter. Subscribe to this informative monthly ENL designed specifically for the dental office manager here.
I’ve read numerous articles about the best ways to manage collections and accounts receivables. What I’ve noticed, however, is that most of these articles approach collections from the back end—they discuss trying to collect after treatment has been completed. Having been a single front office person in a busy dental practice, I can say firsthand that I don’t have time for that! With my approach to collections, I believe you’ll receive the gift of a healthier AR, and the team will have more time.
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The biggest waste of time when it comes to maintaining a healthy AR is to have the same conversations about money for the same treatment. Let’s explore how many times money is discussed or managed with patients about the same treatment.
1. The treatment plan and financial arrangements are discussed.
2. The patient arrives for the appointment, and after the appointment (when the person is numb, tired, and wants to go home), money is discussed again. Hopefully the person is prepared to pay what was discussed earlier. If the patient does not bring money or wants to discuss what is owed again, there is another conversation.
3. Insurance is billed, payment is received, and a balance exists, so a statement is sent.
4. If no payment is received, a call is made or another statement is sent.
5. If there is still no payment, another collection call is made and eventually the patients pays or the account is sent to collections.
The cost for the treatment already provided is worth less now than it was initially, and the administrative time is adding up. This is a backward approach to collecting for a service already provided. Why not collect when the treatment plan and financial arrangements are presented? Isn’t this how business is conducted in nearly every other industry? When can you receive thousands of dollars for anything, any service or commodity, without paying in full or reserving with a credit card?
Many people say this approach is not possible in dentistry because patients will not comply. The real reason people say this is because they fear losing patients. Having used this approach for nearly 10 years, I know it’s possible and the fear is just that—fear. Having said that, it’s critical for your practice to have a plan in place before implementation.
What are the steps to take?
How do you do this correctly? You must sell “What’s in it for me?” to the patient. We already know what’s in it for the practice: we get paid for treatment on the front end; we have fewer cancellations and no shows; our AR is improved; the front office team has fewer collection calls to make, which saves time; and there are fewer statements to send, which saves paper, fees, and postage.
For patients, it’s important to share what’s in it for them. First of all, there is clarity about financials from the initial discussion, before they’re numb and tired. Dentistry is confusing enough for patients and conversations about insurance complicates the conversation even further. If things can be kept to one conversation, it’s easier for both patients and the practice. Ultimately, this is about protecting patient relationships due to miscommunication about money and expectations. Many patients have left a dental office because of miscommunication about money.
Secondly for patients, there is no need for them to remember what’s expected of them again when they arrive at the front desk on the day of treatment, which can be weeks or months later. Finally, there is no need to have financial conversations immediately after treatment when they’re numb, anxious, in discomfort, and just want to leave.
When the benefits of paying upon scheduling is communicated well, I have found that there is rarely any resistance from patients. When someone does resist, you must be prepared with excellent verbal skills to redirect patients back to “What’s in it for me?” Those who refuse to pay upon scheduling are usually the ones not committed to their treatment. These are also the same patients who no show, cancel their appointments, or will go to battle over a $20 balance.
If your practice is collecting money after treatment has been completed, this is costing the practice. It’s also wasting time that could be better spent in relationship building rather than relationship salvaging, which comes from chasing overdue money or having multiple financial conversations about the same treatment.
As a last note, because estimating insurance payments is nearly impossible to nail down to the penny, consider underestimating insurance payments on treatment presented. It takes less time to send a refund check and you’ll always be the hero in that scenario.
