Implement Best Practices that Maximize Your Clinic’s Cash Flow and Revenue
In my consulting practice, I always begin work with new clients by doing a comprehensive practice analysis. An important component of this analysis is reviewing key financial metrics. One of those is the “age” of pending insurance claim payments. Recently, I was astonished to discover that one of my new clients had over $300,000 in unpaid insurance claims—some of which were more than 15 months year old! For many of these claims, too much time had passed to collect the revenue from the insurance plan. When I shared this discovery with the dentist, she paled and the expression on her face said it all. So, let’s explore how this happened and what can be done to ensure that the same situation doesn’t arise in your practice.
This client had a loyal practice manager who had been with the practice for more than 10 years. She provided great customer service and had a good attitude. However, the practice hadn’t established solid policies and procedures on insurance and billing and the practice manager hadn’t received any training in this area. It turned out that the pending insurance claims were just the tip of the iceberg in terms of ineffective practices.
Following are some tips on how to tighten up your insurance and billing practices to ensure a healthy revenue stream and prevent avoidable losses.
Establish effective front office policies and procedures
You or your practice manager should implement and ensure compliance with the following best practices.
Establish a financial policy. You should have a financial policy in place that covers when payment is expected, forms of payment accepted, and any third-party financing plans available.
Handle new patient intake optimally. Before patients arrive for their first visit, obtain their insurance information and verify eligibility and coverage. When they arrive, have them sign a copy of the financial policy.
Collect patient’s share of the costs at the time of service. Before a patient arrives for an appointment, estimate their share of the cost of the services. Ask them to pay their share at their appointment. Studies have shown that the chances of collecting patient co-pays go down by about 20% as soon as they walk out the door.
Submit claims daily. At the end of each day, staff should submit insurance claims from procedures done that day. This helps ensure a steady cash flow.
Leverage practice software
Fully utilize finance-related features and functions. You or your practice manager should take the time to explore and use all of the tools your practice software has to offer. Not only does this save time and improve efficiency, but being able to quickly run reports allows you to keep tabs on key financial indicators.
Capture patient coverage electronically. Ensure that front office staff enter all new patient insurance information immediately after obtain the information.
Submit claims electronically. You’ll receive payments more quickly if you submit all of your claims electronically.
Monitor the right data and run the right reports
The tasks below are typically handled by the practice manager.
Monitor insurance claim status. Checking insurance claim status at least twice a month and re-submitting rejected claims or appealing denied claims promptly promotes collection of as much insurance-based revenue as possible.
Monitor pre-treatment estimates. Every two weeks, make sure that the insurance company received the requests and schedule patient treatments as soon as the estimates are received.
Run a daily report on claims submitted. The practice manager should ensure that each day all procedures done for patients with insurance have been submitted.
Run aging reports on insurance claims and outstanding patient balances. Run these reports weekly and address any issues promptly.
The practice manager should definitely have dental-office-specific training geared toward managers. Ideally, the front office should also be trained in basic front office billing and insurance best practices. A small investment in this type of training has a high ROI for your bottom line.
If you’d like to explore our online billing and insurance courses for both front office staff and managers, please click on the links below.