Maximize your dental practice's account receivable

Tips that all dental practices should use to set clear financial arrangements and expectations for their dental patients.

Dr. Joseph Banker of Creative Dental Care in New Jersey has learned from his years of practicing dentistry all about patients who cannot pay. His experience has taught him that a dentist must spend the appropriate amount of time with patient, to educate them on their treatment options. 

Factors such as time frame, cost, and comfort must be considered. Once the desired treatment is selected, clear financial arrangements are crucial prior to the inception of treatment.

“I encourage my patients to participate in the formation of their treatment plan. Some have the means to pay for extensive treatment in full while others prefer to spread their treatment over a longer period of time. Regardless of their financial situation, I am successful in helping my patients achieve optimal oral health. We make a plan, and we work our way through it at a pace that is comfortable for them,” Dr. Banker said.

Not every dental office may run as smoothly as Creative Dental Care. For those who find themselves sailing the rough seas can learn a lot from Patty Ricard. For more than 20-years she has been on the front line as an office manager for dentists. Her experience has led her to consult with dentists and their teams about proper practice management.

Patty says a dental treatment goes beyond written forms and starts at the Dentist’s office front desk. For Ricard, securing the right front office staff is key. A good question to ask a potential hire is ‘Are you comfortable asking for money?’

“Some people just don’t have it in their nature. It is a personality type and some people can do it and some people can’t,” Richard said.

What to include in a financial arrangement form

Solid collections take more than just the right staff. Practices should use the proper forms and documentation to set patient expectations. These forms also can create legal rights and options down the road.

Patty has designed a financial arrangement form that is meant to be reviewed with all patients line by line. Each form states the following:

• Treatment to be provided 

• Cost of treatment

• Estimated insurance payments (if any) - (key word that must be on form is "estimated")

• Estimated out of pocket costs after insurance (if any) -(key word that must be on form is "estimated")

• At least 3 options for payment 

• How much money is due upon scheduling or when treatment has begun (there are reasons for both options) and what dollars (if any) will be forfeited upon failing to appear for the scheduled appointment or last minute cancellation.

• A statement indicating that regardless of insurance estimates provided, the patient is ultimately responsible for the entire cost of treatment.

• A statement indicating that the estimate has been reviewed and understood by the patient.

• A statement indicating that the during the course of treatment, the treatment may need to be altered, due to unforeseen circumstances in which case options will be provided immediately along with any change in costs will be presented in writing.

• An expiration date for the cost of treatment (I recommend 90 days).

• Signature line and date.

These, arrangements should be made in advance before incurring any expense. 

“The key is to communicate. I do not know of any dentist that would refer an account to collections if the patient simply informed them that they were having a financial hardship and made alternate arrangements. If an account gets so delinquent that it must be referred to a collection agency, there must have been a serious breakdown in communications,” Dr. Banker said.

Helping Patients Finance Their Treatment

Dental offices do have commercial financing options to offer their patients, for example, companies like CareCredit or Chase HealthFirst.

“They take the burden of collecting payments off of the dental office and allow the focus of their energy to be on the treatment.  In house financing can put a strain on the patient/doctor relationship. If a patient is unable to keep up with their agreed upon payments, it can put them both in an uncomfortable situation,” Dr. Banker said.

Warning Regarding Finance Options

Cases involving consumer fraud claims can be protracted and nasty. This is not a medical malpractice case, so normal professional liability policies will not cover it.  Further, given the general public's current hostility towards finance firms, there is a risk to taking the case to a jury. Basically, this is a predatory lending case. Unfortunately, this type of case appears to be occurring more frequently.

• I recommend that the credit application be given to the patient without other documents. 

• Don't hand the patient a stack of documents with an instruction to "sign these."  A separation in time from when the patient applies for the line of credit and when the professional services are rendered also helps.

• Staff should be familiar with how the credit firm works to answer basic questions and should refer the patient directly to the financing firm for more specific information.

• Finally, a little common sense should be used.  Don't present a credit application to a patient that is heavily medicated or is not in a condition to fully appreciate what they are signing.

With a little training of staff and appropriate procedures, a practice can go a long way to protecting itself from a predatory lend claim.    

Dentists Need to Stay Involved

Patty Ricard says in her years of consulting she finds that most dentists have no idea what their accounts receivable total is. She says they often leave it up to their front desk employees and hope who they have hired, know what they are doing. Problems often arise when more patient accounts are in red ink than in black.

“If accounts receivable are healthy it will take them less than five minutes to review a report because they are only going to have the accounts that were flagged the previous month,” Ricard said.

If a dentist's accounts receivable is not organized, then going through the effort of a review is even more critical. Socrates has been credited with saying “The unexamined like is not worth living.” The same can be said of your practice’s ledger. As margins shrink in this tough economy, you have little choice in addressing past due accounts.

Finally, take a moment to remind yourself why you are in the profession in the first place.
 

“It is nice to complete a patient's active treatment and see them for a routine checkup and cleaning.  Whether their treatment took 2 months or 2 years, they are so excited to hear that they don't need any new dental work. This is only attainable with good treatment planning and clear financial arrangements,” Dr. Banker said.

Michael J. Sacopulos is a partner with Sacopulos, Johnson & Sacopulos in Terre Haute, Indiana. He also serves as Legal Analyst for Dental Products Report, Plastic Surgery Practice and is National Counsel for Medical Justice Services, Inc.  His practice focuses on assisting healthcare professionals develop strategies and techniques to avoid medical liability claims.  He may be reached at Mike_Sacopulos@Sacopulos.com.