The concept is pretty simple. You perform the dentistry, and patients pay you for your services. Yet, many practices struggle with collections and that, of course, is hurting their bottom line.
If you want to improve your collections ratio, which should be at 98%, you need to establish a clear financial policy and then communicate that policy to both new and existing patients. Not sure how to get started? Follow these tips to reduce the number of delinquent accounts and make collections a smoother, more successful process at your practice.
Create a policy that you're comfortable with
As the CEO, you need to create a financial policy that is in your practice's best interest. Take staff input into consideration, but, ultimately, it's your job to make sure you come up with a policy that will benefit your practice.
Remember, if the policy is too lenient, it could hurt your practice, but a policy that is too strict could be a deterrent to patients who need more flexible payment options. The policy you put in place should be standard for all patients with only rare exceptions. This will help streamline the collections process and ensure patients understand your payment expectations.
Consider offering third-party patient financing
Many patients can't afford to pay for expensive dental procedures all at once. If you offer third-party financing, you will get paid right away for what you produce and also boost your production numbers, as more patients will be able to afford the treatment they need. Patients will be grateful for the option to make manageable, interest-free monthly payments and may even tell family and friends about your flexibility; that can only mean good things for your bottom line.
But, don't offer too many payment options. A menu of payment plans will only cause your practice confusion and extra work.
To encourage patients to pay for more costly procedures in full, consider offering a slight fee adjustment when you receive an upfront payment. Refer to this as a bookkeeping adjustment rather than a discount.
Another option is to, as part of your financial policy, let patients know you expect full payment at the time of service for all procedure that are less than $200, and require insured patients to pay at least part of the amount they're responsible for when services are rendered.
Once patients' statements are 31 days past due, it's time for your financial coordinator to give the patients a call. During these conversations, the financial coordinator should let patients know the practice hasn't received its payment yet, and politely ask them how they would like to take care of their bill. Before hanging up, the coordinator should find out when the payment is expected to arrive. If payment doesn't arrive on the day promised, call again.
One method to save time and money is electronic billing. This also has the advantage of making it easy and convenient for patients to take care of the balance on their statement.
And this might sound basic, but don't accept postdated checks. While this might be convenient for the patient, it's not beneficial for your practice. It just amounts to a lot of money sitting around in the drawer rather than going to the bank.
Train your team
Make sure your financial coordinator knows what it takes to make effective collections calls. Train this team member on how to develop and follow a well-rehearsed script. The calls should never be confrontational -- remember your financial coordinator's role is to work with the patient to resolve the situation and collect payment.
As a business owner and the CEO of your dental practice, you have to create a financial policy that will help ensure patients promptly pay you for your work. Prompt payment is key to your practice's survival. If you follow these tips, both your collections ratio and your production numbers will improve. The number of delinquent accounts will decrease, and you'll have fewer misunderstandings with patients over payment expectations.
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.