Accounts receivable (A/R) refers to sums of money owed to a practice that have not yet been paid. Typically, the two types of accounts receivable in a dental practice are, one, amounts owed by the patient and, two, the estimated amount owed by the insurance plan. These two amounts combine to become the total accounts receivable.
Most patients want an accurate estimation of what their plan will pay before they move forward with treatment. Patients may postpone making an appointment until the practice can give them an accurate estimate of the cost of services to be rendered.
Not providing an accurate assessment can lead to a high payer portion A/R. Usually, the patient is ultimately responsible for the total amount of their bill unless estimated adjustments are to be made after the insurance pays its contractual portion.
Most dentists say they are too busy to worry about the number of insurance claim amounts that are aging in their A/R totals. They don't understand the bigger picture about how A/R aging can damage a practice's profits and growth.
It's concerning when there is a significant balance in the 90-day aging on your A/R report. Software can help you determine how much of an A/R total is due from insurance and how much is a patient's portion, but these amounts may not be accurate if errors have been made in posting and making payment adjustments.
Account audits may be necessary to confirm the actual balances due. A healthy total A/R should not exceed the month's production amount.
If it were only a matter of billing insurance and getting paid within a 30-day window, the holdup would seem to be delays from insurance plans to settle claims on a timely basis. This is the case sometimes, but more often, factors in your practice are the cause of a high aging report.
Many practices estimate the patient portion after entering the insurance benefits information into the computer. The patient pays the coinsurance (copayment) amount at the time service is provided based on the benefits and eligibility information garnered from the insurance plan.
However, oversights in patient insurance management often upset the best-laid plans. Some issues that cause the insurance A/R to rise include the following:
- Patient eligibility, benefits, and plan limitations are not verified before the patient arrives.
- Patients leave their appointment without paying their estimated coinsurance portion and deductible. (Patients should make coinsurance payments before they are seated.)
- Patients leave their appointment with an outstanding balance and no payment agreement in place. (You can set up a contract at any time to ensure that the patient understands their responsibilities.)
- Patients fail to honor their agreed-upon financial arrangement.
8 steps to set up a sound A/R system
A/R upsets can be avoided or resolved early when you have sound systems in place and team members who are accountable for collections and customer service. Below are steps to putting a sound system in place:
- A key team member should have as part of their written job description the task of managing A/R and related aging reports, including following up on claims and appealing claims. In addition, this individual should update insurance payment tables with each insurance plan to create a more accurate estimate for patients.
- Share insurance estimates with patients and communicate with them that an amount could be owed after an insurance claim has been filed due to unknown policies and changes in eligibility.
- Create a treatment plan that emphasizes the insurance estimate and what the patient may owe. Communicate with the patient when insurance claims age 40 days and you have communicated with the insurance plan with no resolution.
- Submit your insurance claims efficiently. Confirm that all claim data is correct and that claims are being processed through a clearinghouse.
- Provide a script to the team that is a kind but firm narrative for collecting monies that are due.
- Follow up on all unpaid claims ahead of standard aging timelines. Talk to insurance representatives and supervisors on stubborn claims.
- For patients, define what payment options your practice is willing to accept and how it will collect overdue payments.
- Create a payment plan with patients who have large balances and are inconsistent with paying on time.
Some patients may have outstanding balances that haven't yet been paid by their insurance provider and patient portion amounts that are also due. Have a system in place that estimates the insurance portion that is due and sends a statement to the patient for the amount they owe.
Accounts with a balance that are over 90 days old could be an insurance delay. It's important to know the reason for the delay and if the patient portion of that total can be collected at that time. If a customer owes your practice money for services incurred at different times, ensure the report shows how much is due at what time.
Please pay attention to the 90-day mark and beyond, because as monies age, your chances of collecting decreases. Patients who owe money are less likely to call for an appointment and are more likely to cancel or not show up for their regular maintenance visit.
To best manage your A/R and stop the aging of insurance claims, due diligence must be a constant to ensure claims are paid before they age past 45 days.
The comments and observations expressed herein do not necessarily reflect the opinions of DrBicuspid.com, nor should they be construed as an endorsement or admonishment of any particular idea, vendor, or organization.