January 4, 2021 -- In a crisis, dental practices must refocus on production because production leads to revenue, cash, and income. Production will create revenue if the collection target is achieved, revenue will create the cash necessary to protect the practice, and available cash often becomes income for the doctor. As you can see, this formula starts with production. When basic practice systems are properly executed, production will be sufficient and revenue, cash, and income are almost always assured.
Collection systems must be executed every day. Levin Group recommends a new concept called the "one-day rule" that can be applied to the collection process. It simply states that any patient who is one day overdue for payment will be contacted that same day and once a week for the next nine weeks. This is a simple but rigid system that will allow practices to collect the recommended target of 98% of all adjusted production. We've seen many practices reach this level once the right collection system is put in place.
Don't forget about insurance. Research indicates that 20% to 40% of insurance claims are either improperly coded or include mistakes. We recently saw a $1.1 million practice that was losing $80,000 per year by using unacceptable insurance codes. Making sure that your insurance codes are correct is another useful way to increase practice collections.
Dr. Roger P. Levin is the CEO of Levin Group, a leading dental management consulting firm, and one of the most sought-after speakers in dentistry. Levin has authored 65 books and more than 4,000 articles on dental practice management and marketing. You can sign up for the Levin Group Tip of the Day.
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