Tips to Improve Collections in your Dental Practice
Collection management is a massive problem for dental practices. It’s one of the most common reasons that dental practices fail. The great news is that there are many things you can do to improve collections in your training and keep them from becoming a problem in the future. Here are eight tips on how to manage collections properly in your dental office from the best dental consultants at 2740 Consulting.
- Consider Offering Third Party Financing – Offering third-party financing is a great way to allow your patients to get the treatment they need without having to wait. Not only that, but it also gives you instant access to cash, and can improve your collections by as much as 30%. Several dental finance companies provide low-interest rates, 0% down options, and flexible payment options (monthly payments, yearly payments, etc.). This is an excellent option if you want to make it easier for your patients to pay their bills.
- Create and Communicate a Financial Policy – Your patients must understand what they will have to pay when they come in for treatment. You must communicate a financial policy upfront, and explain which treatments are more expensive. For example, a full-mouth restoration with implants is going to be significantly more costly than a cleaning. By informing your patients of this from the beginning, it makes it easier to choose the treatment that fits their budget.
- Ask Patients for Payment Before they leave the Office – I know this sounds crazy, but it works. This is especially important if you are using third-party financing. If you’re asking patients to pay before they leave the office, that means that they have already completed their treatment, and most likely, they will not need to return. It also provides instant cash for your practice, which can help improve your collections.
- Don’t Offer too Many Options Upfront – Often patients blame their poor credit on false emergencies such as a sudden car accident or an unexpected medical procedure. This is why it’s essential to ask them about their insurance status and find out what financial options they have before you continue treatment. If they don’t have any dental benefits, and they’ve already completed care, walk them through your financial policy and possibly third-party financing options.
- Thank Patients for Upfront Payments with a Reward – Patients love getting rewarded for things they already do. It makes them feel appreciated and will encourage future visits. If your patients come in to pay their bill out of pocket, consider offering them a reward such as a discount on their subsequent treatment or even a special gift for making an upfront payment. Not only that, but you will also improve your collections by making it easier for them to see why they should come back.
- Offer Electronic Billing – If you’re not offering electronic billing to your patients already, now is the time. If you are sending out paper bills, it’s costing your practice money, and lowering collections at the same time. A study conducted by an independent research firm of 20 dental practices showed that converting to e-billing reduced the cost per claim of accounts receivable by 9%, and accounts receivable days by 9%. That means that electronic billing can improve your dental practice collections by as much as 18%.
- Don’t take Post-dated Checks – Taking post-dated checks is a bad idea and can lead to lower collections. Many people use this option because it allows them to set aside money in their account for emergencies, but they forget about it, and leave you with an uncollected debt. If someone wants to pay by check, always ask for the exact amount of the bill instead of taking a post-dated check. That way, you can ensure they have enough money in their account, and avoid bad debt.
- Start Making Phone Calls to Patients with Unpaid Bills – When patients don’t pay their bills, you must make phone calls and ask for payment. Do not let accounts go past due because it will affect your collections. You must remain professional while doing this, and do not agree to any extended payment plans or work-out payment arrangements unless they are realistic. If a patient has a financial hardship, you should try to help them in any way.
The quality of dental collections is directly related to the quality of service provided. It’s time for you as an office manager to start looking at your practice as a business, and improve your collections as much as possible. By following some or all of these eight tips on improving collections, you should see an improvement in no-shows, bad debts, and late payments in the next few days. Contact 2740 to get started with our expert dental practice management consultants today.