In dentistry, delivering excellent patient care is not the only requirement for a practice’s sustainability; rather, it’s only half the job done. Patient balance management, the equally important financial side, demands some extra hard work to ensure full revenue recovery. Effective patient balance management is the foundation of patient collections.
Want to know how to do it right? This guide provides expert tips for effective patient balance management to help you recover revenue while improving the patient experience with your practice.
What is Patient Balance Management?
Patient balance management is the process of estimating, communicating, collecting, and reconciling the portion of a patient’s share of treatment costs. It’s important to identify and reclaim lost, underpaid, and denied revenue.
Investing in professional dental revenue cycle management services and a smarter approach helps you to recover outstanding patient balances and prevent revenue loss.
Want to know how? We’ll discuss that in detail. But first, let’s discuss some common issues with patient balance management.
What are the Challenges in Patient Balance Management?
Collecting revenue from patients isn’t always easy for dental practices. It requires expertise and planning to collect payments and avoid mistakes that lead to revenue loss. While managing the back-end revenue cycle and dealing with patient billing, billers experience these challenges.
Front-End Collection Failures
The following mistakes by the front desk staff can lead to revenue loss from patients’ payables:
- Not collecting at the time of service: Waiting for post-treatment to collect co-pays, deductibles, or estimated balances leads to a higher uncollected patient bill.
- Failing to verify insurance before treatment: Skipping or rushing insurance verification causes surprise patient bills, leading to disputes and non-payment.
- Inaccurate cost estimates: Failing to verify patient benefits (maximums, deductibles, frequency limits, etc.) and a non-comprehensive treatment plan leads to inaccurate estimations of patient responsibility.
Poor Communication and Policies
Communication issues create doubts, which make patients less likely to pay. Learn how:
- Lack of clear financial policy: Not having a contracted financial policy that outlines patient payment responsibilities and consequences for non-payment causes revenue loss.
- Sending complicated statements: Using complex billing statements results in patients’ payment delays.
Inefficient Back-End Follow-Up
Back-end follow-ups are important for managing patient balance. When you don’t properly follow up, it becomes difficult to recover payments. Some common follow-up issues are:
- Failure to monitor accounts receivable (A/R): When you don’t check and review A/R aging reports daily, your outstanding patient balances can exceed 60 or 90 days. It becomes difficult to collect older balances.
- Ignoring small balances: Although some lesser-value patient balances are usually ignored as write-offs, leaving them unattended for a longer period of time causes huge revenue loss.
- Lack of follow-up on denials: Treating denied claims as a final decision, rather than immediately correcting and resubmitting or appealing, causes unnecessary write-offs.
Errors in Claim Submission
Some issues in claim submission and payment posting also affect patient balance management.
- Inefficient payment posting: Manually posting payments increases the risk of errors and misses opportunities to accurately reflect patient balances.
- Missing documents for appeals: Forgetting to attach dental radiographs or periodontal charting for periodontal procedures, to claim appeals, makes it almost impossible to recover revenue.
How to Improve Patient Balance Management?
Now that you are familiar with the challenges of patient balance collections, let’s move on to learn some techniques to speed up the recovery process and help you maintain a smooth dental revenue cycle.
Upfront Communication and Price Transparency
Communication is the key to recovering revenue. Similarly, transparency in pricing makes patients more willing to pay their dues on time. For that, consider the following:
- Provide good faith estimates (GFE): Provide an upfront cost estimate for each service, especially for self-pay patients, as it needs to comply with the No Surprises Act under CMS guidelines.
- Collect at point of service (POS): Collect copayments, deductibles, and outstanding balances at check-in or check-out. It helps reduce a huge amount of bad debt.
- Clear financial policies: Set up a detailed policy regarding payment and communicate it clearly to patients. It helps you prevent surprises and avoid any payment delays.
Leverage Technology for Payments
When you integrate technology into your financial management, it’s easy for patients to pay the amount. Therefore, implement:
- Online patient portals: Set up online portals where patients can view balances and make payments 24/7.
- Digital wallets: Add payment options, automated clearing house (ACH), and credit cards, to help patients transfer the amount instantly.
- Automated reminders for payment: Send SMS or email reminders for upcoming and overdue payments to reduce manual follow-ups.
Get Front-End Support
Investing in professional front office management services can improve the patient communication experience. Your practice gets complete support in dealing with patients, whether it’s scheduling appointments, communicating balances, or collecting patients’ share of payments, such as co-pays and outstanding balances.
Write a Professional Patient Balance Due Letter
It’s important to remind patients on time that the payment is due. Approach patients respectfully and notify them to clear the payments.
Here is a sample patient balance due letter. You can use it as a template for patient billing and modify it accordingly:
Date: [Insert Date]
Patient Name: [Patient Full Name]
Account Number: [Account Number]
Dear [Patient First Name],
We hope you are doing well. This is a courtesy notice regarding your account with [Practice Name].
According to our records, there is an outstanding balance on your account:
Balance Due: $[Amount Due]
Date of Service: [Service Date(s)]
Description of Services: [Brief Description or Procedure Codes]
We kindly request that payment be made by [Due Date] to avoid any interruptions in your future dental care or additional collection procedures.
Payment Options:
Online: [Payment Portal Link]
Phone: [Practice Phone Number]
In Person: [Practice Address Placeholder]
Mail: [Mailing Address Placeholder]
If you believe this balance is incorrect, have questions about your insurance coverage, or would like to discuss a payment plan, please contact our office at [Phone Number]. We are happy to assist you.
We appreciate your prompt attention to this matter and thank you for trusting us with your dental care.
Sincerely,
[Practice Name]
Billing Department
Important Notice:
If payment has already been made, please disregard this letter. Thank you.
Implement Flexible Payment Options
If you implement flexible payment options, it improves patient balance management. To do so, collect the amount in installments. It becomes easy for patients to clear the dues. Additionally, you can collect the information of the patient’s credit card, if the patient is willing, to utilize it after the insurance payer reimburses the amount against a claim.
Optimize Billing and Follow-Up Processes
Patients often feel frustrated by the complicated bills. To avoid that, you should not use technical terms in billing. Add easy-to-understand details of the insurance dues and patients’ responsibilities.
Additionally, send patient statements promptly within 5 business days of the claim adjudication after carefully reading the explanation of benefits (EOB) to prevent delays.
Outsourcing Dental Billing Services
Outsourcing can be a viable option for your practice if you are struggling to manage outstanding patient balances. A reputable company like TransDental can help you collect your full amount through its expert billers and professional patient communication support.
Outsourcing partners manage patient communication efficiently and handle all the complex tasks for you, so your front-end officers are relieved.
As a result, you’re able to recover revenue faster without worrying about finances. You can dedicate yourself to patient care while outsourcing partners manage it for you.
Monitor Key Performance Indicators (KPIs)
Monitoring the key performance indicators can help practices get a clear view of the patient balance billing. Here, consider the following indicators:
Self-Pay Collection Rate
It is a metric that helps practices understand how many self-pay patients (those who pay via patient portals) are clearing their dues themselves. The metric is calculated by dividing the total payments received from self-pay patients by the total charges assigned to these patients. You then multiply the output by 100 to get the percentage.
Example: Suppose a dental practice billed $10,000 to self-pay patients during a month. By the end of the month, self-pay patients paid a total $7500. When you divide $7500 by $10000 and multiply it by 100, the self-pay collection rate is 75%. It doesn’t match the industry standards, which require a percentage of at least above 90%.
Percentage of Accounts Sent to Collections
Owing to high copays and deductibles and lower income levels, patients face hardship in paying the bills. Therefore, practices should minimize the chances of high patient responsibilities. It helps reduce the number of accounts sent to collections. Many practices aim to keep it under 15%.
Net Promoter Score
Net promoter score (NPS) indicates the likelihood of a patient recommending the practice to other people. While it’s not directly a metric of patient balance management, it indirectly improves a practice’s chances of getting more revenue due to the higher patient inflow. A NPS score of 60-80 is a commonly cited benchmark.
How to Manage Patient Credit Balance?
While patient balance management is mostly based on underpayments, practices also deal with overpayments in some situations. Patients can sometimes mistakenly pay more than their due amount, which results in overpayment.
It’s important to detect and resolve the issue on time. Otherwise, delays can lead to financial and legal risks.
Identify the patient who paid the dues, notify them, and refund the amount. You may also save the amount and apply it for future visits, depending on your agreement with the patient.
Conclusion
Patient balance management is a crucial part of practice revenue recovery. After insurance companies, patients are the major source of revenue for dental practices. You can efficiently recover revenue through clear communication, utilization of technology, availability of more payment options, and speedy patient bill submission. So, implement these practices and drive sufficient revenue growth for your practice.
Frequently Asked Questions (FAQs)
How can I reduce patient payment confusion?
Many patients are confused by terms used in billing and may assume copays cover all charges. However, it’s not always the case. The front desk staff should have upfront conversations about financial responsibility, explaining to patients the costs, and provide written estimates to the patients before treatment.
Is it better to collect payment before or after a visit?
Always attempt to collect payment before or at the time of service. Patients who leave without paying require more time to follow up. As a result, when the balance remains unpaid for a long time, it becomes more difficult to collect payments.
What should I do if a patient cannot pay their full balance?
Offer flexible options and automated payment plans to patients according to their budget. This improves the chance of receiving full payment over time rather than receiving nothing at all.
How often should I follow up on outstanding patient balances?
Develop a consistent follow-up schedule to recover patient balances. For example, send reminders every 15 days. However, ensure these follow-ups remain polite and professional to protect the patient-provider relationship.
Why is patient balance management so challenging compared to insurance collections?
Patients often face high-deductible plans, confusion over benefits, and unexpected out-of-pocket costs. Therefore, it can be challenging to manage patient billing if you don’t get billing support from partners like TransDental.
