Did you know that many offices are audited simply because they write off a copayment or deductible?  Did you know that every office needs to have a written financial policy that will protect your office with the “Truth and Lending Laws” that we must follow?

Not only are we great in helping your team collect more of your hard earned money but we will provide your team with the rules to say compliance and the verbiage to help your team speak with patients.

Let me start by saying, "I love collecting money!" Few things are more gratifying in my work environment than handing my dentist an accounts receivable list that is at a negative figure. I would like to share with you some simple yet effective methods of collecting old balances, collecting daily balances and maintaining a low accounts receivable.

The Basics of Collection Perception and Communication

the key to effective collections is your practices' and business assistant's communication skills and perception skills. The simple basics of this are:

1. Your office should have a strict payment policy in place.
2. The policy is explained at the time of the initial phone call from a new patient.
3. The policy is outlined in your office portfolio that is either mailed ahead of time to each new patient or given to them at their first appointment.
4. The Treatment Coordinator or Business Assistant has gone over the completion of the new patient information sheets with the patient.

Either way, the patient is fully aware that payment is expected on the day of service. Fee for service - easy right? Then why aren't all accounts being paid to you? It's usually because you let patients not pay you!

If the Business Assistant perceives collecting payment the same way as paying a grocery store, a lube/oil change attendant or a coffee shop attendant, collecting money becomes very natural and subsequently, very easy. The key to this is to never ask a patient "if they're paying." Presume they are paying! As in the three examples above, the customer received a service and has their payment ready. This is no different than the 5 star service they received in your office. Could you even imagine walking out of the grocery store with a rump roast under your arm or walking out of the garage or coffee shop and suggesting they send you a bill?

It should be fully understood by the entire team (backed 100% by the Dentist) that payment is expected on the day of service. This, combined with a strict financial policy, is your primary tool for keeping your collections running at peak efficiency.

The Cost of Collections

The cost of collections can be substantial depending on the method of payment. It's important that your office take an hour to see where you are losing the most money in service charges and make adjustments accordingly.

Obviously, cash and debit card are named first when options of how to pay are introduced. With debit cards costing your office approximately $0.12 cents per transaction compared to 1.85% on Visa or 2% on MasterCard, you can see why cash or debit payments are in your best interest. Do the math yourself on a MasterCard payment for a $3,000.00 bridge and then multiply that by the number of times the procedure was performed that year. You can soon see the cost to the office. 

Care Credit is another payment option for patients. It allows a patient to divide their payment into 12 equal monthly payments, interest free. The dentist is paid within 2 days so Care Credit removes the responsibility of being a banker. The patient is responsible for paying Care Credit. There is a variable interest rate schedule to the dentist, depending upon the length of time the patient takes to pay it back. 

The big question for some dental practices has always been checks Should you accept them or not? There is definitely the problem of checks not clearing, the processing fees for NSF checks and the chasing of the patients to re-issue payment. Some Dentists choose not to deal with that and only accept cash and credit cards, however, to close the door on potential new families joining your practice isn't necessarily the best course of action. If you have explained to the new patient who has indicated that they can only pay by checks that there is a $30.00 fee for processing an NSF checks, it becomes a deterrent and the patient makes a concerted effort to make sure their checks clears their account. Contact your bank about a scanning machine that you can run the checks through to verify funds beforehand. If a checks is not good due to non-sufficient funds, you can simply put the checks "on collection" at your bank and collect the funds anyway. Contact your bank and ask them to install the direct deposit program.  Scan check as you receive, and know if they are cleared.  Amazing



Accounts Receivable Reports & Daily processing

your accounts receivable list must be reviewed daily by the Business Assistant. It takes two minutes to run a 'cash summary' report. If you have multiple dentists at your practice, you must run independent accounts receivable reports but, most importantly, you must know how to read your reports. (Make sure all this information is kept in your compliance book)

Sometimes, an A/R number at the bottom of a page can be deceiving. For instance, if patient 'A' owes you $500 but patient 'B' gave you a $1,000 initial payment towards a bridge to be done, your A/R will read $-500 but this is not true. On paper, the credit created by the 'initial payment' cancels out the balance owing so please be careful not to lose patient A's balance. A daily review of your accounts receivable list will keep you informed and on top of things. 

Dentists, sit down with your business assistant for half an hour at the end of the month and run down your accounts receivable list. If the business assistant is going over her accounts daily, the list will be quick and easy to review (no need to print out all of the accounts). This is your business and dentists are too often guilty of leaving the business end of things to someone else. Too quickly, money owing can double unless a dentist takes the time to know where he/she stands.

When reviewing accounts, decide on your course of action. Are you getting the run around from a patient with many promises of payment? Take action. Send a 'final demand' registered letter stating the account will be charged a collection fee and sent off to a third party unless paid within 14 days. This prompts quick payment. Do not contact the patient again. Make sure they are aware that the letter is your last contact with them unless they act.

Statements should be done daily. Don't go back to accounts 30 days due. Process anything 21 days due. Patients will receive their statement after 21 days and will have it paid within 30 days. Processing statements daily serves many purposes. It enables the business assistant to be on top of every account. She will become so familiar with every account that if a patient is in the schedule who owes money, it can be easily collected. I have always believed it is easier to collect money from someone who is standing in front of you rather than on the other end of a phone line. If statements are done monthly, it is harder to monitor your accounts and keep a handle on things. When statements are done daily, you may have to process anywhere from 3-10 statements a day, (20-30 minutes maximum). They can be processed quick and easy; eliminating the need to spend half a day or longer doing statements. Processing daily also gives you more time to book outstanding treatment, and makes the job of collecting money less frustrating and overwhelming.

Know that even though a patient has a delinquent account, you both want the same thing - you both want the account paid. No one likes owing money. Your patient would like nothing more than to receive a receipt stating, "balance owing '$0'", the same as you.

The person in charge of collecting overdue accounts must be someone who is able to work with the patient and let them know your office is willing to help them get their account in order. Bully tactics or hostile collection methods more often than not end up fruitless. Exploring different options and working with the patient helps both parties achieve the results you both want. None of us are beyond simple oversights or circumstances that make payment a little difficult. Working with a patient not only results in collection of an account but keeps the family as patients as well. 

Know that there will be some accounts that you will not be able to collect. The collection job is not for someone who takes things personally. It's okay to be stern yet still maintain a professional, friendly attitude at the same time. Patients respect this and as a result will respect your office policies.

If a patient does leave your office and requests their x-rays, yet still has an outstanding balance, you cannot withhold their x-rays. At no time can you jeopardize a persons' dental treatment due to an outstanding account. A delinquent account is a collection problem. You can take the collection to a third party, but you cannot withhold their x-rays. You are obligated to forward them to an office of their choice, in a timely manner (obtain a letter of permission to release the x-rays).

Conclusion

Develop a consistent office policy that everyone is aware of. If the patient hears the same thing at the front desk and it is reiterated in the back, it lends validity and the patient knows that your policies are your policies. 

Ensure that your Financial Policies are clearly written on your office brochure and in new patient information. And don't forget that perception of payment is key for your Business Assistant - expect that payment!

Get excited about your dentistry and expect to be paid. Have an outstanding practice, not outstanding balances. With a structured protocol, you too will love collecting money and change your A/R list from an 'accounts receivable' list to an 'accounts received' list. Take care of business, you're a dentist not a banker.