Is your production like a spin cycle class, full speed going nowhere?
By: Jaycee Brown – Digital Marketing Manager
For those of you that think being really busy running from one operatory to another at breakneck speed all day translates to being profitable take a look at your daily production and collection reconciliation reports, that is if you have the energy.
Pay particular attention to your adjustments for the day and the yearly total. Want to question that? You should question it daily. Without proper instruction about the correct way to do adjustments from the practice management software, production adjustments will have a major impact on how much your practice is collecting from the production numbers. If you aren’t aware of adjustments to certain groups of people like cash patients, senior patients and friends etc. you are going to be shocked to know you have been spinning your wheels for free. In a cash situation you would be collecting 98 to 100% of the production daily unless you do the unthinkable and give discounts off your standard fee of 10 to 20%. An office I spoke to was busy but was suffering from a cash flow issue. They gave a 20 percent discount to everyone that paid cash and wrote off insurance coinsurance amounts for patients that complained. Mind you this is the production that you are back there sweating over and remember that you are actually collecting on the adjusted production not your standard fees.
Take for example the following scenario:
Bernice is a lovely person with a background in customer service but not dental office management. She is confused with how out of network PPO adjustments are handled and she thinks that the patient doesn’t pay the difference between the practice fee and the allowable fee. Your fee for a service was $100, and the PPO allowable fee was $80 and covered at 80%. Bernice receives the insurance check for $64 (80% of the $80 PPO fee). She proceeds to adjust the remaining balance of $36, leaving the patient with either a $0 balance or a credit balance of $16, which was the 20% patient portion of the reduced fee of $80 if collected at the time of service. Bernice then proceeds to give you a statement showing a refund check needs to be written to the patient for $16.00. You don’t question it because you don’t understand how it works either.
Solution
Every month, sit down with your office manager and or financial coordinator and review the production adjustments that are posted to the accounts. There should be a report that is generated daily with the charges, payments and adjustments posted. Review these daily for accuracy. Question large adjustments and encourage your office manager to post “notes” with explanations regarding the adjustments.
Set up an adjustment codes in the software system that more accurately describes the adjustment that is being posted so that it is easily identifiable. Examples would be: 5% Cash Courtesy, Employee Family, Employee, Posted in Error (Credit), Posted in Error (Debit), Small Credit Balance Adjustment, Small Uncollectible Adjustment, Finance Charge Adjustment, etc.
A better solution would be to outsource your insurance billing and patient billing to a professional billing service such as eAssist Dental Billing. Let a professional company make sure that what you produce is paid for with as few adjustments as possible.
eAssist Helpful News and Billing Tips; Edition #108
