3 Steps to Manage your Dental Practice Financial Management

Dentists: Understand your dental practice finances

Everyone in a dental practice is busy. Hygienists have a patient every 30-45 minutes all day long. piggybankAssistants have rooms to clean and patients to care for while keeping the dentist on schedule. Dentists are keeping all the clinical staff moving, providing patient care and answering dozens of questions all day long. Finally, the office manager and front desk team members are often left alone to handle the finances and insurance for a variety of PPO plans that each have a different reimbursement level for each code, while answering phones and trying to fill the schedule.

So, it’s not a surprise to reach the end of the month to run a few reports and then wonder, “Hmmm, that just doesn’t look right?!”

But how do you know what looks right?

What should the report look like?

Dental consultants have made entire careers by helping dentists answer these questions. However, for the dentists who aren’t hiring a consultant – here are some steps to take to help you figure things out.

Step 1: Look at your dental office production, collection and adjustments

You know how to run these reports, so run each one and then do the math:
Collection – Adjustments = Net Collection
Net Collection / Production = % Collection
If your % collection is below 98%, then you can say confidently – “That doesn’t look right.”

Step 2: Look at each adjustment

Run a report to find a list of all the adjustments you’re using. Run another report to see how much was spent on each adjustment. Go through these one by one to see if they are being used properly. For example, you find $312 in senior citizen discounts – look up the patient. Is the patient over age 65? Is the calculation done correctly? Did the patient pay and is the account at zero?

You should look at two patients for each type of adjustment that shows up on your report to see if things make sense. When you find strangeness, ask more questions. Run an audit trail to figure out which staff person entered this adjustment and then talk with them. Find out how they are using this adjustment code and talk through this procedure.

Step 3: Check your dental insurance management

The errors that can occur in entering insurance payments are almost unbelievable. Remember, every PPO has a unique fee schedule and if you have joined the plan, then you must write off the difference between the allowed amount and your full fee. Your set up is key. Look at a few patients for each plan – look at the EOB and make sure the insurance payment and insurance withhold are entered correctly.

Improper insurance withholds is almost always the reason for a low collection percentage. This suggests that you’re tracking a gross production number in the patient’s ledger. This is unrealistic for any PPO plans you’ve joined and to look at an inflated production simply makes your collection percentage look terrible – and may mislead you into thinking that your office manager and front desk team aren’t collecting the way they should.

Financial dental management is just one way to run a successful dental practice. If you’re interested in new ideas on running a dental practice, please subscribe to my weekly blog. One of the biggest challenges to managing a dental practice is managing dental insurance. With dental insurance handled, then dental marketing for new patients becomes a primary focus. In today’s day of online reviews, handling patient complaints well is essential. As your practice grows, hiring dental staff becomes more important. With 16+ years of dental practice management experience, I’m open to your questions to help you run a successful dental office.

Feel free to email me.

AUTHOR: Jill Nesbitt
jill@dentalpracticecoaching.com
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