3 Ways Dental Practices Can Reduce Accounts Receivable


Tackle your A/R with proactive planning

Accounts receivable (A/R) can be a slippery slope for a dental office, on one hand, you want the value-add to your clients of an assignment office but on the other hand, you don’t want to have thousands of dollars in an A/R balance. A/R balances can occur for a number of reasons and can be tricky to collect if you’re not on top of it. With that in mind, we rustled together the best tips and tricks on how to prevent an A/R balance and how to combat one if it’s snuck its way into your books.

Create a proactive plan!

The best way to get rid of an A/R problem is to not have one in the first place. A/R issues can be combated head-on by having a proactive system and a solid client communication plan set-up.

The main reason that we find dental practices accumulate A/R over time is that their check-in process is not complete. Is your clients’ insurance information up-to-date? Did you pre-authorize the procedure through their insurance company? Did you clearly communicate to your client the patient portion of the cost? These are all questions you should ask yourself when managing your A/R.

There are a few quick and easy processes you can implement to help update and complete your patient check-in process:
  1. Make sure all your patient information is up-to-date. Pre-authorized form of payment? Check. Address? Check. The better the information the less of a problem, otherwise you might be chasing ghosts or filing claims with outdated policy. This is best done when the patient checks in prior to the appointment.
  2. Pre-authorize the procedure with your client’s insurance company so you know how much will not be covered. keep a credit card on file for every patient and get permission to use it. Keeping a credit card on file can be a great way to clear out small patient portion balances, but make sure you have a safe and secure way to store it along with authorization to use it.
  3. Provide third-party patient financing. While this is a good option for every clinic, we see many clinics provide patients with payment plans then struggle to collect on them. Giving an alternative option, such as third-party patient financing, can help manage your A/R. When going with this option, do your homework. Make sure you’re working with a reputable company that will add value to your patient experience.

But beyond those items, your most valuable tool is a competent and proactive administrative team representing you at the front desk. With clear communication and proactive procedures, your team will have your A/R problem handled in no time.

If you already have an A/R problem

A/R problems happen and you are not alone. But they should be dealt with as soon as possible, as someone who’s payment is overdue one week is more likely to pay over someone who’s payment is overdue by a year. The fresher the better!

If you do happen to have thousands that you haven’t yet received, there are a few things you need to do to get it straightened out. First, you need to dedicate someone to collect it and communicate to them clearly what their responsibility is. Then you need to strategize. Set aside space and time for your dedicated staff member, and make sure they have the tools to get the job done.

The next thing to consider is when will you see the patient next? If they have an appointment within the next month the best thing to do might be to collect it when they come in. While a courtesy call might tackle the problem if they don’t and it’s a reasonable amount, collecting in person is probably your best route. With that out of the way, here are a few tips and timelines to consider:

  • Payments that are 30 days overdue and under can be combated easily with having a credit card on file. If you are in a circumstance where you don’t have a credit card on file, set up a plan to give the client a call every few days to remind them of the payment. Something this fresh in their mind should be no problem to collect.
  • Payments that are between 30 and 60 days overdue can be harder to collect, but are not impossible and can be tackled by consistent communication and a solid strategy.
  • Payments that are over 90 days overdue can be a challenge to collect. In these circumstances, try giving your patient a call every other day for the first 10 days. If the issue has not been resolved itself by then, you might consider sending a letter each week for the next three weeks. If neither phone calls or request letters work, it is reasonable to try a demand letter. Alternatively send the account to a collection agency, in order to attempt collection on your behalf. Collections agencies will charge anywhere between 20 – 40% of what they collect.

A/R does not have to be a huge hurdle for your dental office to tackle, a little proactive planning and a lot of good communication can go a long way.

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