Home Practice ManagementFinance Protect Your Assets And Track Your Account Receivables

Protect Your Assets And Track Your Account Receivables

by Heidi
Mount

Collections is where we pay our bills, monitor our numbers, budget, invest, profit share with the team and so forth. When I am analyzing my clients’ numbers, I notice that many offices have made the unfortunate decision of loaning their patients money. Some dentists don’t realize their employees are allowing the patients to walk out the door without paying. If you don’t believe me, then it’s time to analyze your accounts receivables.

How many of you wait for the insurance or patients to pay and have a past due accounts receivables? If you answered “yes,” you are in fact “loaning money” to your patients. We can’t guarantee the patient or the insurance will pay. Therefore, you are carrying an account balance and taking the responsibility as a bank which is a big risk.

Now, how many of you are not collecting the social security number any longer? Decades ago, the subscriber identification was the patient’s social security number. However, due to identity theft, most insurance carriers are now placing a random alphanumeric identification number on the patients’ insurance card. Just so you know, if you are carrying the loan for a patient, you should have the right to collect their social security number. If the patient refuses to give it, you can simply say, “We would be happy to bill your insurance for you and they can reimburse what they owe you. However, since we are not set up like a bank, we will need you to pay the full fee for your treatment. Would you like to take care of that on check or card?”

When I evaluate my clients’ software, I notice that the majority do not have a photo copy of their identification card, social security number or a headshot photo embedded into their chart. In order, to minimize identity theft, we need to know who they are right? Let’s make that happen!

As a practice management consultant, another big issue I see with my dental practices is that statements are not going out on a regular basis. What this means is that patients are uninformed about charges, payments and adjustments. Furthermore, this means payments that you could be receiving are not coming in.

Another step to take is to have statement messages customized to the guarantor that explain what is going on with the account. For example, the statement note could say, “Your insurance has responded, this balance is due upon receipt.” It is important to prevent extra phone calls about their bills by clear communication and systems in place. The bottom line is that I recommend sending statements every 30 days.

One of the things you will hear your employees say is “I don’t know how to deal with the past due balances.” Your office needs a clear written financial policy and guidelines so the employees clearly know how to deal with account balances. What letter gets sent and when? How do we send the collection notice? Does it get sent via certified mail or what? How do we post the account that it was sent to collections? Keep in mind doctors, employees don’t always deal with your accounts correctly.

When an account gets sent to collections, employees must make the ledger show that. For example, there would be an adjustment labeled “Sent to collections” and the account would now have an account balance of zero and the account would be flagged. Otherwise, if we adjust the account to zero without that label, the team would think the account is in good standing. Then, when a payment is received, the account would tell the detailed history. In other words, if we receive a $100 payment, there are steps to take to tell the story on that account. An employee would need to balance forward the total payment of $100, post a $60 payment as “Collection agency payment,” then post the adjustment “Collection agency fee” of -$40 which would now have the account balance back to a zero. Now, everyone can see the patient is finally paying the collection agency and we probably shouldn’t ever “loan money” to this patient again.

Your patients should be fully aware of money due. If you find that your office gets a lot of account calls where patients are confused about their bill, then your front desk needs training. Patients should not be financially surprised about their bill or owe much more after they already paid their estimated portion. Furthermore, all patients should be aware of the treatment and fees. They should be signing a full treatment plan and be responsible for the entire amount charged.

Your accounts receivable report should be run on a consistent basis. If you have account issues, I recommend your employee to be working on it daily and reporting to you their results. If your numbers and percentages are in the right 30, 60, and over 90 day buckets, then you can run it monthly. Don’t assume your front desk administrative team member or office manager has it handled, run your own reports and meet with them on a regular basis.

Set up your standard operating manual for your office. It is very important to have a detailed accounting policy. What are the financial choices that patients have? Do we schedule if they have a past due balance? Your team must know the way you want to run your practice. Imagine if your front desk wasn’t trained on how to set up a financial arrangement and the patient left without paying. What if the patient paid religiously on the 1st of every month $50 and they owed $1000? If you sent this account to collections for being 90 days old, the patient could say, “You let me pay three equal monthly payments in a row!” By allowing this, it could mean implied consent and they could continue making small payments. The key is to prevent issues by having clear, concise systems in place.

If you want to be the bank, then get set up correctly. Set up a system where you get patients to apply for credit, sign a promissory note, gain your own interest to keep and create equity in your business. Many dentists make a lot of money monthly on being paid interest.

As you can see, there are lots of little details within a financial policy. Many of the challenges happen due to lack of systems, however, lots of issues happen when you have a negative money mindset. For example, if you or your team is saying things like, “Our patients are used to making payments,” “Our patients won’t pay up front,” “Our patients will leave if they have to pay prior to insurance,” and your team believes that you can’t collect what patients owe, then you won’t be able to make more profit or run like an ecosystem. It is important to get in the right frame of mind and expect to be paid as health care professionals that value what you do for your community.

partica

Heidi
Mount


Heidi Mount is owner of her Virtual Consulting Company. Her work with dental practices focuses on creating effective and easy to follow solutions that result in less stress and greater profitability. In fact, her claim to fame is helping offices make $500 more a day on tomorrow’s schedule. Contact Heidi at Heidi@CoachingDentist.com or visit her website: www.CoachHeidiMount.com.

Grab 10 secrets to increasing revenue on tomorrow’s schedule at www.CoachingDentist.com.


Leave a Comment

Related Posts

Get the tools, resources and insights to build your practice

Subscribe To The Profitable Dentist Newsletter

Get notified about new articles and issues. We will never sell your address or contact information.