How to improve collections in dental practices

Maintaining adequate dental collections management is vital to keeping a practice financially healthy. Yet, many dental offices grapple with an accounts receivable problem that won't disappear. They lag when it comes to cash flow and operate inefficiently. So, how can collections be improved?

Typically, the causes stem from a lack of strategic thinking and poor interpersonal communication with patients. Efficient collections are necessary and possible with better-thought-out and implemented processes and procedures. The outcome we all want is reduced AR and sound cash flow.

1. Establish clear financial policies

An adequately constructed financial policy is the bedrock of efficient collections management. Patients should be made aware of payment prerequisites before treatment starts. This should encompass a full rundown of their insurance, co-pays, payment plans, and what payment methods are accepted. Financial agreements, in writing, with an open discussion about who is responsible for what, will go a long way toward preventing misunderstandings and ensuring that payments arrive promptly.

2. Leverage dental virtual assistants for billing & follow-ups

Dental virtual assistants play a crucial role in optimizing collections for your business. How? By handling billing tasks, insurance verification, and patient follow-ups. 

By outsourcing administrative tasks to trained virtual assistants, practices can:

• Ensure accurate and timely claims submission
• Follow-up on denied claims and resubmissions
• Contact patients with outstanding balances professionally
• Maintain organized financial records

Using virtual assistants reduces the burden on in-office staff and improves collection efficiency.

3. Implement a proactive accounts receivable strategy

Regularly reviewing AR reports allows dental offices to identify outstanding balances and take action accordingly. Best practices include:

• Segmenting AR by age categories
• Prioritizing follow-ups on high-balance accounts
• Offering discounts for early payments
• Sending progressively urgent reminders as invoices age

A proactive approach ensures that past-due accounts are addressed promptly before they become uncollectible.

4. Train staff on effective collection techniques

Front desk and billing staff should be trained in patient communication techniques to discuss financial matters confidently and empathetically. They should:

• Clearly explain billing statements
• Address patient concerns about costs
• Offer solutions such as payment plans when necessary

Effective communication builds patient trust while improving collections.

Industry insights and statistical data

According to a report by the NADP, 65% of denied dental claims result from errors in determining dental eligibility. Since denying a claim that shouldn't be rejected doesn't help us achieve either of our goals—providing our patients with the dental care they need and being reimbursed for that care—correctly determining eligibility goes a long way toward improving the profitability of our practice.  (NADP, 2019)

Additionally, the Dental Economics Journal reports that practices offering online payment options experience a 25% hike in on-time payments (Dental Economics, 2022). This is significant because practices with fewer outstanding balances have fewer problems and interruptions in their workflow. Having a seamless workflow is crucial for a dental practice because it equates to generating revenue. (Dental Economics)

Conclusion

A recent article in Dental Economics suggests that practices adopt virtual dental assistants, billing automation, and payment flexibility to boost cash flow in dentistry and curtail accounts receivable.

Although some stages, such as finance policies, depend on your business, we can help you hire a virtual dental assistant and train them. At Reach, we offer professionals who can help you with customer service and administrative procedures.

Contact us for a free 30-minute call where you can learn more about our services and what we offer.

‍