Are you sending out claims daily? Do you have the right people in the right seats? Those might seem like simple questions, but unless your answer is â€œYesâ€ to both, you may not be maximizing your accounts receivable collections.
When you want to pay bills and the balance in your checkbook is zero, that’s not a good thing. But, ideally, that’s exactly your accounts receivable balance should be. Zero.
Meaning, you’re collecting 100 percent of what you’re billing. It can happen, but not without some forethought and preparation. And that starts with setting goals.
But according to Kerry Straine, a certified professional behavioral and values analyst, and president of Straine Dental Consulting, the majority of dentists do not set production or collection goals.
“Establishing goals for accounts receivable is critical, because it's a byproduct of uncollected production,” explains Straine. “An account that we’re waiting to receive is representative of work the practice has expended overhead for. So for a small business owner like a dentist, they’ve got to have a clear understanding of ‘what are my collection goals going to be?’”
GOALS AND PEOPLE
Having the right staff in the right seats is vital to the success of a dental practice. And now just economic success, Straine says, but the success of building a culture that allows employees to feel like they’re making a contribution, and being recognized for that performance. That performance includes achieving set goals.
April Brissette is the chief lending officer with Bankers Healthcare Group, a leading provider of financial solutions to healthcare professionals. She agrees that goal setting and staff go hand in hand.
Brissette explains that too often dentists don’t have control over their accounts receivable because they’ve put that responsibility in the hands of someone that don’t know well and don’t necessarily trust. That could be the front desk person who’s being paid $12 an hour, yet holds the key to your finances because they’re controlling how much money is coming back into the practice.
“Whether you’re setting a numerical goal of how much you’re going to collect each month, or making sure you have the right person in the right seat, goals are of the utmost importance in terms of accounts receivable,” Brissette says.
A DAILY ROUTINE
Sending claims out daily sounds like a no-brainer concept because it allows for constant cash flow rather than large sums coming in here and there. But Brissette says that too often practices will send their claims out once a week, such as on Friday morning. But if a service was performed the previous Friday afternoon or earlier that week on Monday morning, you’ve now built in a one-week lag time in getting the claim to the insurance company.
“And then, if there’s a kickback because the coding is wrong or something is incorrect, then it could be months before you get reimbursed for that,” Brissette says. “So while it might seem a little cumbersome to do it daily … figuring out a way to send them out daily is ideal for cash flow.”
Straine, an advocate of sending out insurance claims daily and collecting co-payments at the time of treatment, is also a golfer. In years passed when he’s had a chance to golf with friends, a wager or two would often be placed. In that vein, the old saying comes to mind: “Fast pay makes fast friends.”
“Don’t let money get between you and a friend,” Straine explains. “Certainly, don’t let it get between you and a customer. And the longer the insurance claim goes without being paid, the less certain we’ll have enough cash flow to maintain operations.”
OFFER PATIENT FINANCING
Straine says that when it comes to maximizing accounts receivable, it makes sense to offer patients as many options to finance their out-of-pocket expense as possible. For example, his consulting firm has been a fan of CareCredit for 20 years. And when he sees a downward trend of fewer transactions being processed through CareCredit, there’s usually a correlation between that and lower production.
“Over the last 50 years America has been built on how much you can afford to pay monthly, not how much is the cost of the product,” Straine says. “It has been programmed into us that credit is an acceptable way to finance the joy of life. And the joy of life is being healthy.”
Brissete echoes those thoughts. She says that Bankers Healthcare Group's clients often sees patients declining treatment plans because they lack the means to pay for it, yet they don’t necessarily want to admit that to the dentist. Those are missed opportunities.
“There could be a lot of collections out there if [patient financing] was an option for patients,” she says.