When you treat an insured patient at your practice, you submit a dental claim and expect reimbursement. But it doesn’t always work the same way.
There are times when you have treated a patient but forget to document all the details related to the services provided to the patient during a treatment. With that, the time difference between the date of service and the charge capture increases, causing a charge lag in your billing process.
It delays your claim submissions and reimbursements, and if not managed properly, can lead to a huge revenue loss for your dental practice.
Want to protect your revenue and receive payments fast? We’ll guide you through tips on reducing charge lag for a smooth dental revenue cycle.
What is a Charge Lag?
Suppose you treated a patient with a root canal on January 15, but didn’t enter the charge by January 30 due to day-to-day practice tasks. It’s a fifteen-day difference between the time of service and the charge capture.
This gap of days (15 days in this case) between the actual procedure and the charge capture causes charge lag, which dental practices shouldn’t experience. But this delay is common when practices don’t use proper dental RCM services to submit claims.
Want to know how charge lags impact your financial management? Let’s proceed to the next section!
How Does a Charge Lag Impact Dental RCM?
The following reasons help explain how a charge lag becomes a hurdle to a smooth dental revenue cycle.
Inconsistent Cash Flow
When there is a charge lag in your billing process, you can’t predict revenue because you aren’t sure when you’ll receive claim reimbursements or whether you’ll even get paid.
Due to that, cash flow is inconsistent, and it’s difficult to manage a practice’s finances if it’s short on cash.
Revenue Loss and A/R Aging
If you don’t correctly enter the charge, which means recording all the services, materials, and procedures during a patient’s treatment, you may end up submitting the wrong claim. The payer ultimately denies the claim.
It can result in a straight revenue loss for your practice and increase your staff’s efforts in trying to recover revenue. It also increases your accounts receivable, as outstanding balances start growing older.
Charge lag is one of the critical RCM KPIs and performance metrics, which should be managed on time, or else a huge amount of your practice’s earnings is written off.
How to Calculate a Charge Lag?
A charge lag is calculated by subtracting the date of service from the date the charge was entered. It’s calculated in days.
Example: You treat a patient for a dental implant on April 6, but enter the charge on April 23. You calculate the charge lag by subtracting April 6 (date of service) from April 23 (date charge entered). The result is seventeen days.
Seventeen days is a higher charge lag, which should be reduced.
What Causes a Charge Lag in Dental Billing?
The following reasons lead to a charge lag in dental billing:
Documentation Delays
Payers require complete documentation for some costly or complex dental procedures to prove their necessity for the patient’s health. And your charge capture is incomplete if you don’t attach the documentation.
Whether it’s preparing treatment narratives or recording periodontal charts, each document requires time. But a common issue arises in dental billing, where dentists and practice staff are busy with daily tasks, due to which they can’t find time to arrange for complete documentation. As a result, it delays the charge capture, increasing the charge lag.
Lack of Software Integration
When your practice management software and billing system aren’t fully integrated, this impacts your dental billing process. Patient’s demographics, insurance data, and treatment details are required together for a complete charge capture, but when these are not compiled in one place, information is incomplete, and an accurate claim submission isn’t possible, delaying payment.
Slow and Outdated Manual Processes
When dental practices rely on manual processes to submit claims, delays are inevitable. Manual tasks take time to fill forms, arrange for documentation, check relevant CDT codes, and comply with payer policies.
Now, just take payer policy, for example. When you’re submitting a dental claim manually, you need to thoroughly read payer policies, which can be boring, exhausting, and time-consuming. And payers have strict deadlines to submit claims, so charges must be captured on time.
Plus, outdated processes result in errors, and a claim scrubber may reject a claim. Correcting it again requires time, leading to a higher charge lag.
Technical Errors in Claim Submission
Sometimes, you may encounter delays despite submitting a claim. It’s common for practices to submit claims and feel relieved that payments are coming, but that doesn’t happen. It’s because of a technical error. The server may be down on your or your payer’s end. A system may crash at the time of claim submission. Due to that, you need to enter or update the charges again. All these issues lead to a higher charge lag.
Secondary Claim in Coordination of Benefits
When a patient has two insurance claims, charge lags are likely to occur, but these are rare.
In most cases, when a payer reimburses or denies a primary claim in the Coordination of Benefits, the payer sends the primary explanation of benefits to the practice, and the timely filing limit for secondary billing starts after a primary EOB has been sent.
However, some state-run dental programs may require you to submit the secondary claim within a year of the date of service. And a claim can be subject to denial, even if the primary payer has delayed the EOB.
Best Tips to Reduce a Charge Lag
Here are the best practices to reduce charge lag for faster payments and smooth collections.
Submit Electronic Dental Claims
Don’t delay dental claim submission. When a treatment is completed, immediately enter the charges, fill the claim form with all the required details about the procedure, and submit the claim. Electronic dental claim submissions are fast, reaching the payer instantly, while manual submissions via fax or mail can take many days.
The claims must be submitted within 24-48 hours of a dental procedure. If preparing documents requires time, take it, but don’t delay it longer.
And, once you submit a claim, make sure to confirm if the payer has received it. A payer may provide you with a claim tracking number, which you can use to track progress via the payer portal or direct communication with the payer.
Remember to get that confirmation from the payer; otherwise, it may lead to a revenue loss.
Automate Your Billing Processes
Manual processes can take a lot of time and also lead to errors. But you can solve this problem by automating your tasks.
Bill your dental claims using a high-end technology solution like robotic process automation. A dental RPA covers your complete revenue cycle, performing all the steps smoothly and within seconds.
Whether it’s attaching documentation, matching CDT code, filling a dental claim form, or submitting a claim, RPA does all of that with near-accuracy. The fast and accurate processes minimize errors and complete tasks quickly, leading to quick charge captures, claim submissions, and timely payments.
This reduces charge lag.
Integrate Practice Systems
When your PMS and billing software aren’t integrated, processes aren’t smooth. Make sure to integrate your systems, or invest in an all-in-one software that manages all the practice and billing tasks in one place. You don’t need to rely on integration and can easily perform all tasks.
With that, you can also check your appointments regularly, whether you do so daily or weekly, against the charges you’ve entered. Any appointment without a matching charge could mean a missed bill, which might lead to a charge lag. Doing this routinely helps catch issues before they grow.
Overall, this strategy maintains speed and accuracy, leaving no room for charge lag between the date of service and the charge capture.
Outsource Billing Process
Charge lags are common when a practice staff is occupied with multiple clinical, administrative, and billing tasks. It doesn’t just delay your billing and payment processes, but also overburdens your staff. Eventually, that results in an increasing staff turnover, which a busy practice can’t afford.
To prevent this issue, outsource your dental billing and RCM to a reliable services provider like TransDental. Billing partners handle all the aspects of your RCM, from verifying patient eligibility and mastering payer policies to using accurate CDT codes and submitting complete and clean claims fast.
Plus, they also know how to manage the coordination of benefits in case of a patient’s dual insurance, so receiving primary EOBs and sending secondary claims on time isn’t an issue.
When claims and payments are quick, you don’t have to worry about managing a metric like charge lag. Outsourcing is the right solution to reduce charge lag in dental billing for a busy practice.
Conclusion
Charge lag isn’t a healthy metric, and the number of days should be reduced in it. A higher lag indicates inefficient billing processes, which can be easily controlled by automating processes and working with billing experts, who can easily manage the lengthy and complex tasks to recover your payments fast. It helps reduce A/R and optimize the revenue cycle with full payments and consistent cash flow.
Frequently Asked Questions (FAQs)
What is an acceptable charge lag for a dental practice?
The ideal benchmark for charge lag is 24-48 hours. Anything beyond 5 days starts to create measurable revenue risk. Practices with charge lag over 7 days often see collection rates drop by 10-15%.
Can charge lag cause claim denials?
Delayed charge entry can push claim submissions past payer timely filing deadlines, resulting in automatic denials that cannot be appealed, permanently forfeiting that revenue.
How do I calculate charge lag for my dental practice?
Subtract the date of service from the date the charge was entered in your billing system. Average this across all encounters over a set period (weekly or monthly) to track your practice’s performance over time.
Is charge lag different from days in accounts receivable (A/R)?
Charge lag measures the time between service and charge entry. Days in A/R measures the time between service and payment collection. Charge lag directly contributes to higher A/R days when left unmanaged.
Will outsourcing dental billing help reduce charge lag?
Outsourcing to TransDental helps reduce your charge lag. Dedicated dental billing teams monitor charge entry daily, enforce timely submission standards, and reconcile charges systematically, reducing charge lag to under 24 hours.
