How to Improve the Billing and Collection Process for Your Dental Office

Staying on top of collection activities can be a challenge for most dental offices. Any time you see your accounts receivable (A/R) increasing, in fact, a poor collection process is often to blame.

Since A/R turnover can significantly impact your profitability, it’s important that you address collection issues as early as possible. 

Once you’ve taken steps to consistently convert your accounts receivable into cash, you’ll find it easier to access the funds you need for:

• Upgrading equipment
• Hiring and training new staff
• Implementing more efficient office procedures that can ultimately grow your dental practice revenue

The better you get at converting your A/R over the long term, the healthier your cash flow will be. 

A good conversion goal is to have 95% of your patients pay their dental fees within sixty days of being billed. The 7 tips below can help you meet that objective by improving your dental office’s billing and collection process.

7 Tips to improve your billing and collections process

Tip #1. Verify patient insurance in advance

Your first step in the billing process should always be to ask patients for their dental insurance policies upfront (ideally, when they book their appointments). 

By requesting this information in advance, you’ll know exactly what their timely filing periods are, and what their coverage does or doesn’t include in terms of any:

• Deductibles or downgrades
• Annual maximums or frequency limitations
• Missing tooth clauses or non-covered goods or services

Not only can this increase your insurance collection percentages, but it will also help you avoid headaches like sending claims to the wrong insurance companies—or blindly treating patients without active coverage. 

Tip #2. Quote fees before providing treatment

Rather than surprising patients with unexpected fees they may have trouble paying later, make it a practice to: 

• Provide every patient with a cost estimate before conducting treatments
• Explain your payment terms and policies 
• Recommend alternative payment methods that could help make costlier treatments more manageable

The more your dental practice can do to clarify and streamline payments, the less likely a jumbled billing and collection process is to negatively impact your business. 

Tip #3. Collect payment upfront whenever possible

It’s especially important that you outline any early payments your patients will need to pay out-of-pocket before treatment begins. 

While it might not be feasible to collect fees upfront for more expensive procedures, requesting payment at the time of service for treatments costing less than $200 can go a long way to reducing your collections.

Tip #4. Offer a wide range of payment options 

By accepting cash, debit, and credit cards (and requesting direct deposit or credit card information in advance) you can:

• Encourage more patients to pay on the spot
• Get paid automatically once a service is performed
• Side-step the billing and collection process more often 

If you don’t already, you should also consider offering third-party financing. 

External payment plans don’t just help more patients afford expensive or non-covered treatments—they can help you avoid chasing down payments.

Tip #5. Forward your insurance claims daily

The faster you file insurance claims, the faster your dental office gets paid. Investing in dedicated dental software is a great way to file claims electronically and speed up your collections process.

Not only will some software systems validate your claims automatically (allowing you to quickly address missing or incorrect information), they make it easy to monitor the status of your claims so you can spend less time following up with insurance companies.

Tip #6. Optimize your collections procedure 

Because many practitioners worry about damaging their client relationships (and losing patients to their competitors) it’s not uncommon for some dental offices to send out statements at 60 days and just hope for the best.

While it’s not in your best interest to be too aggressive when following up on unpaid bills, it is important to establish a solid billing and collection process that will help prevent your cash flow from suffering.

Start by following these 3 best practices:

1. Make sure all your patient communications are friendly, positive, and personalized
2. Find out which communication channels your patients prefer (do they want to be contacted by phone, mail, email, or text, for example)
3. Reach out to patients via their preferred messaging channel as soon as their payment is overdue

Ideally, you should continue to contact these patients with a friendly, weekly reminder until their bills have been paid. Better still, you could use your invoicing or accounting software’s auto-reminders to follow up for you.

Not only will this minimize the number of hours you spend following up manually, by sending weekly reminders as part of your billing process, you’ll help keep your practice top-of-mind for patients juggling multiple payment obligations.

Tip #7. Be consistent about following up on payments

Because consistency plays a key role in the success of your collections, it’s a good idea to have dedicated staff follow up on bills that aren’t paid on time. Bear in mind, however, that collections may take a back seat to more urgent tasks if you assign them to your bookkeeper or office manager. 

One way to get around this problem is by outsourcing your receivables to a third-party collection agency. Since these companies specialize in collecting outstanding invoices, they can ensure your follow-ups are both consistent and timely. 

Getting help with your billing and collection process is a great way to optimize your A/R conversions and keep past-due balances in check. 

Looking to outsource accounts receivable for your dental office? Enkel can help!