How to Optimize Revenue with Accounts Receivable (AR) Management?

Practices write-off thousands of dollars each year due to unpaid balances which they can’t recover.

Now, just imagine, if your dental practice loses this amount annually, the impact on your cash flow will be huge! Paying for staff salaries, practice equipment, utilities, insurance, and other expenses is tough if earnings and profits aren’t sufficient.

But, you can easily control that with strategic dental A/R management. Smooth A/R management helps recover amounts from outstanding insurance and patient bills to a great extent, preventing revenue loss and driving revenue growth.

Eager to know how? Let’s explore.

Verify Patient Eligibility Before Treatment Begins

Getting real-time insurance eligibility verification is your first line of defense!

Start collecting patient data once an insured patient schedules an appointment with your practice for a dental procedure. When a patient registers, immediately verify coverage details from the insurance company. You can do that by viewing insurer’s integrated payer portals or calling insurer’s representatives on the phone.

Either way, you get details of what insurance covers and what the patient needs to pay. 

For example, if the patient visits your practice for a root canal treatment, you charge $1600 for it, as per your contracted fee with the insurer. The patient’s coverage plan has an available limit of $1200. With that, you get to know, insurance covers $1200 for the treatment and the patient has to pay the remaining $400.

Since you now know everything in advance, it’s easy to collect patient balances and control A/R aging. You can communicate costs to patients before the treatment begins, so there are no disputes at the time of payments.

Charge Patients On The Counter

The best way to control A/R is to charge patients on the counter before you begin a treatment. Provide written estimates of the costs they need to pay for a root canal therapy, so they can make their decision. And make sure that you’ve clearly mentioned all the costs, so patients don’t get surprise bills, and you stay compliant with the No Surprises Act.

If patients agree, prepare an agreement, in which you mention all the costs and treatment details. Get their signed consent and receive payments from the patients before you perform the procedure.

It not just helps build patient trust and maintain a healthy and long-term relationship, but also protects your revenue. So, your staff doesn’t have to chase patients afterwards to recover these unpaid balances.

Submit Clean Claims

Claim submission is the core step in your dental billing and coding process, and if you do that right, chances are that reimbursements are fast and complete, reducing your A/R.

Enter Correct Data

Even a single typo can result in claim denials by insurers! And that means just a minor mistake wastes your hours spent on preparing a claim.

To avoid that, enter all the required fields in your dental claim form, which is mostly the ADA claim form. Don’t miss any field and enter each detail correctly, whether its patient name, date of birth, practice address, treatment details, or other information.

Attach Complete Documents

Attach the documents required by your insurer for a procedure. For example, DentaQuest may require the following documents for an endodontic treatment, like root canal therapy:

• Pre-operative radiographs showing the tooth, adjacent, and opposing teeth (bitewing, periapical, or panorex)
• Dated post-operative radiograph submitted with the claim for payment
• Written narrative justifying treatment only if pathology is not evident on X-rays

So, if your patient is insured with DentaQuest and you’re submitting a claim for root canal, attach your insurer’s required documents.

Use the Right CDT Code

The field of CDT code appears in Box No. 29 on the claim form under the header of Procedure Code.

Here, you need to enter the correct CDT code for a dental procedure according to the American Dental Association’s CDT code updates. You must also review the insurance company’s list of accepted codes for a procedure.

For example, DentaQuest doesn’t reimburse for D3110 (direct pulp cap) or D3120 (indirect pulp cap), if you perform other restorative procedure codes on the same tooth and on the same day.

So, follow your insurance company’s requirements to use the right code for a procedure.

Scrub Claims Before Submission

A final check before submitting your claims secures them and saves your staff’s time spent in managing denials. So, check errors in your claim forms with claim scrubbing. It detects whether your claims are compliant with payer requirements, information is correct, and documentation is complete.

It also goes in-depth to see your documents, such as the quality of radiographs and intraoral photos. Claim scrubbing approves these documents only if these attachments are available in high quality.

If you use automated dental billing, your claims are instantly scrubbed once you fill the form, and you’re notified if your claims are clean to qualify for submission. If it detects errors, fix them and send correct claims. With that, insurers are likely to reimburse your claims faster.

Send Claims Fast

Whether you’re submitting dental claims to commercial payers or your state’s Medicaid or Medicare programs, do so within their filing limits. 

Each insurer or state plan allows you to submit claims within a certain time, which can be 30 days, 90 days, or even 180 days, after you perform a procedure.

So, follow payer’s policies and send claims according to their set timeline, to control A/R.

Track Claim Progress and Follow-Up

Monitor Claim Status Daily

Once you submit claims, track them regularly by contacting insurers or checking in your payer portal. With daily tracking, you know the status and act accordingly.

If your claim is approved, immediately post it to the correct patient ledgers to control accounts receivable.

Pursue Claims Aggressively

If your claim remains in pending status for days or weeks, it’s time to contact the insurer and request them to speed up the process, so you receive your payments faster.

For example, if you haven’t received any update on your claim status from the insurer by the first week, contact the payer to get the updates. Provide them with the claim number and ask the reason for delay.

After two weeks have passed since claim submission, follow up again on the claim and check the reason. If you push for urgency, requesting the insurers to reimburse claims on the same day or within the same cycle, they may pay fast.

If your issue is still not resolved, escalate the issue to a claims supervisor and request them to facilitate your payment.

And make sure that you do that all within 30 days because if the claim gets older, recovering it becomes harder.

Manage Denials and Underpayments

Appeal for Valid Claim Denial

If the insurer rejects your claim, check the denial reason in the Explanation of Benefits (EOB). If the reason is valid, submit a corrected claim with an appeal letter to request insurance company to approve your resubmission and reimburse.

Example: You’ve billed a claim with the code CDT D2740 for a crown on a damaged tooth with porcelain. However, you’ve selected the wrong tooth number in the claim instead of the tooth which you’ve treated. Claim is denied in this case. So, you’ve to send a corrected claim with an appeal, in which you mention the correct tooth number and request the insurer to process the payment.

Appeal for Wrong Claim Denial

Sometimes, the claim denial is due to an invalid reason, where you’ve submitted a correct claim but the insurer denies it. In that case, you write an appeal in which you describe the details of your claim to justify why it’s valid.

Example: You’ve submitted a claim for a complete denture on the upper jawbone with CDT D5110 with the correct arch and the service is covered under the patient’s insurance plan. The insurer still rejects it. So, submit an appeal and mention that you’ve charged the contracted fees for the procedure, and billed it with the right tooth number. Attach supporting documents for a strong appeal and request the insurer to pay the due amount.

Appeal for Underpayment

If an insurer doesn’t pay the full amount on a claim, send an appeal to justify that the amount is lower than the contracted fee for the procedure, and request them to pay in full.

Example: Your UCR (usual and customary) fee for a crown is $1,400 but your contracted fee with the insurer is $1,000. The copay is $50, which you’ve collected from the patient. Now you’re paid $800 which is $150 less than the remaining amount. To correct it, submit an appeal to the insurer, justifying that you’ve charged a contracted fee for the procedure, which is $400 less than UCR. Attach your fee schedule, billed invoice to patients, and other documents as proof and request the insurer to pay the right amount.

Collect Unpaid Patient Balances

As we discussed earlier, the best practice is to verify patient eligibility in real-time and collect patient portions of the treatment at the time of service. 

However, in case you’ve not charged the patient before that, and discharged them without collecting balances, recovery becomes difficult.

So, implement the following steps for smooth patient billing and collection:

• Contact Early: Reach out to the patients soon to recover balances.
• Send Notifications: Generate alerts via calls, SMS, or emails to the patients, reminding them that their payment is due.
• Offer Payment Plans: If patients find it difficult to pay large bills in full, offer them to pay a percentage each month, without affecting their monthly expenses.
• Enable Multiple Options: Allow patients to pay you the amount through multiple payment mediums, such as credit cards, debit cards, online transfers, etc. If you’ve a payment portal in your billing software, allow patients to pay via these portals.

Do so fast, so your A/R doesn’t age. The best practice is to collect the amount within 30 days. If it exceeds, try to control it within 60-90 days.

And while you’re communicating with patients, use a professional, polite, and respectful tone. Show them empathy if they’re facing difficulty in paying their balances.

Being harsh may damage your relationship with what can be potentially a long-term patient.

Segment Your Accounts Receivable

Divide your overdue accounts into segments for a smooth accounts receivable management.

A/R by Days

The most common way to segment A/R is by the number of days:

Segment your accounts receivable by the number of days, and prioritize aging balances. In this case, A/R over 90 days is high-risk, so try to recover unpaid bills or claims that are 90 days or older. 

But, that doesn’t mean that you should leave fresh A/R. Assign your staff according to each A/R segment, so they try to manage it accordingly.

If you’re unable to recover balances, despite your best efforts, the last resort is to send the accounts to collection agencies or explore legal options to prevent write-offs.

A/R by Risk

In this, you divide your A/R accounts, based on how likely you can recover your payments. You divide these accounts into low-risk, medium-risk, or high-risk. Let’s see which accounts fall in this criteria:

Low-Risk

The following accounts are considered low-risk:

• Patients who pay balances and co-pays on time
• Payers who reimburse claims quickly
• Insurers who fully cover treatment amounts
• Insurers with less or no claim denials, underpayments, or adjustments

Medium-Risk

These accounts are medium-risk:

• Patients who sometimes delay their payments or don’t pay in full
• Insurers who delay claim payments or issue minor claim denials
• Procedures which are of higher value, such as crowns, bridges, dentures, or implants.

High-Risk

You can classify these accounts as high-risk:

• Patients often delay payments or don’t pay at all, even after your staff follows up
• Payers who keep on denying, delaying, or underpaying claims
• Outstanding balances are higher than the total procedure cost
• Patients who’ve agreed to pay balances in installments but keep delaying payments.

A/R by Value

While the common practice is to divide accounts receivable by the number of days, sometimes, you have to prioritize value.

For example, an outstanding balance of root canal has $2000 value, while the other balance of a cleaning is of $300 value. In that case, you have to prioritize value and prioritize following up on the treatment with a higher amount.

Automate Accounts Receivable Management

By automating your entire A/R process from eligibility checks and claim submissions to appeals and follow-ups, you can perform each step much faster with accuracy and efficiency.

Let’s discuss how using automation the right way can help improve your accounts receivable management.

Invest in Billing Software

A robust dental billing software integrates with your practice management system, collecting patient demographics and insurance coverage data. The software works according to the insurance company’s policies.

A reliable software features all the in-built billing features, such as eligibility checks, claim scrubbing, dental imaging, claim submission, and claim tracking. 

With that, you can smoothly monitor accounts and check patient ledgers to see which claims or bills are outstanding. You can check their dates to segment accounts receivable and strategize your recovery and follow-up approach according to it.

In fact, your software does that for you. It automatically generates invoices, sends notifications, and tracks A/R data for you.

Outsource Your A/R

While investing in software is a great option, you need experts to deploy these tools and operate them with efficiency, which requires time and resources.

In that case, you can outsource accounts receivable management to partners, who can easily operate your PMS, EHR systems, and billing software with expertise. A/R management companies like TransDental do that perfectly. By leveraging a combination of AI automation and expert staff, these partners manage your entire billing and A/R follow-up process smoothly to control accounts aging and reduce it.

They use automated follow-ups for regular accounts, and manual intervention when required in complex overdue accounts, collecting 60-70% of your unpaid balances, and recovering accounts receivable within 21 days, a much higher number than industry standards.

Conclusion

Recovering your unpaid dues from accounts receivable is not an easy task. You need expert management, strategic follow-ups, and ways through which you can convince insurers and patients to pay balances. If that doesn’t work, you’re writing off thousands of dollars!

So, smartly invest in A/R management. By doing so, you can protect your hard-earned dues and recover revenue to scale your practice.

Frequently Asked Questions (FAQs)