Is Your Dental Practice Struggling with a Huge Outstanding A/R? Here’s What You Need to Know about Managing Accounts Receivable.

• Introduction
• Understanding the Accounts Receivable (A/R) Balance
• Effect of A/R Balance on Collection Ratio and Profitability
• Tips for Managing Outstanding Accounts Receivable Effectively
• Outsourcing A/R Management to One Dental Billing
• Conclusion

Introduction

As a dental practitioner, you may be concerned about the amount owed to your practice for services provided but not collected yet. You may view it as a cost of doing business, but carrying a high accounts receivable (A/R) balance has a significant impact on your practice. A high A/R balance has an impact on your collection ratio and ultimately on your business profitability. In this blog, we will discuss how to effectively manage your outstanding A/R and increase your revenue with the help of One Dental Billing outsourcing services.

Understanding the Accounts Receivable (A/R) Balance

Accounts receivable (A/R) is the amount of money owed to your dental practice by patients and insurance companies for services already provided but not yet collected. It is the uncollected production that your practice has on its books. While some A/R is healthy and expected, a high A/R balance poses a significant risk to the financial health of your practice.

Properly managing your A/R balance is critical for your practice’s sustainability. Your dental practice is not a bank, and your patients should not owe you a significant amount of money for a long time. While setting clear payment policies and collecting payments requires time and effort, carrying high A/R for an extended period of time has its consequences.

Carrying excess A/R balance can significantly impact your practice’s profitability. It increases the cost of doing business and decreases your collection ratio, leading to uncollected production and missed opportunities for treating paying patients. Moreover, as time passes, the chances of collection decrease, and you may even end up losing the money that you could have earned, given that there is a cost associated with providing services.

In conclusion, having a clear understanding of your A/R balance and managing it properly is essential for the financial sustainability and growth of your dental practice. The next section will discuss the impact of A/R balance on collection ratio and profitability.

Effect of A/R Balance on Collection Ratio and Profitability

The collection ratio is the percentage resulting from funds collected divided by net production, typically measured over a 12-month period as collections will vary month-to-month. A high collection ratio is a key performance indicator for dental practices, and the industry standard for a good collection ratio is between 95% and 99%. When your dental practice is carrying a large accounts receivable balance, especially past due balances of more than 90 days, the likelihood of collection decreases.

It is human nature to focus on the immediate, and as time passes, patients will forget the quality oral care they received and be less willing to pay their bill. This results in a decreased collection ratio for your practice. Unfortunately, a decreased collection ratio will have a direct impact on your practice’s overall profitability.

When you deliver treatment to a patient, you incur the associated staff and overhead costs. If you let the past due balance age and eventually become uncollectible, you are not only missing out on this patient’s payment but also the revenue you would have collected from dental services delivered to a patient who pays promptly. The longer an A/R balance goes unpaid, the greater the cost to the practice.

As a dentist, your time is extremely valuable. By not setting a clear billing policy and keeping A/R in check, your practice runs the risk of a reduced collection ratio PLUS the opportunity cost of treating a paying patient. The cost of carrying excess accounts receivable, along with decreased collection rates and lost revenues, has a tremendous impact on your practice’s overall financial health.

Tips for Managing Outstanding Accounts Receivable Effectively

To manage outstanding accounts receivable (A/R) effectively, the first step is to keep a close eye on the A/R aging report. This report provides a snapshot of the practice’s outstanding A/R by aging bucket, i.e., the number of days past due. If the aging report indicates a high amount of A/R beyond the 90-day aging bucket, it’s time to take action.

The second step is to set a clear billing policy that outlines the terms and conditions for payments, including payment due dates and payment methods. To maximize A/R collections, it is essential to send timely and accurate statements, invoices, and payment reminders to patients.

The third step is to optimize A/R collections. The best way to do this is by automating the process, starting with pre-visit eligibility verifications and insurance authorizations. This ensures that all required payments and authorizations are obtained before or at the time of service. In addition, practices should offer multiple payment options, including online payments, credit card payments, and payment plans.

With a tight grip on the A/R balance, your practice will enjoy increased profitability from improved collection ratios and fewer write-offs.

Outsourcing A/R Management to One Dental Billing

Are you tired of spending several hours every day chasing down patients for overdue balances? Then outsourcing A/R management to One Dental Billing can be your solution. We are a dental billing and collection agency that specializes in dental insurance billing, coding, and collections.

By outsourcing your A/R management to us, you can enjoy the benefits of faster A/R collections, improved cash flow, and higher profitability rates. We provide comprehensive services that include end-to-end A/R management, patient billing, and follow-up, insurance verification and authorizations, and other billing-related tasks.

At One Dental Billing, we have a team of dental billing and coding experts who understand the nuances of dental billing and reimbursement. Our team works closely with your practice to understand your billing requirements, identify areas of improvement and implement solutions that streamline your billing process.

In conclusion, managing outstanding A/R takes time, patience and expertise. To optimize your collections and streamline your billing process, outsource your A/R management to One Dental Billing.

As an experienced outsourcing partner, One Dental Billing delivers streamlined A/R management services with rapid turn-around times and maximum revenue recovery. By leveraging cutting-edge technology and proven industry expertise, they can help you to collect more money, faster than ever before.

Benefits of Outsourcing A/R Management

Outsourcing your A/R management offers several benefits over traditional in-house collection efforts. By delegating the task to One Dental Billing, you can:

– Minimize lost revenue due to uncollected balances
– Improve patient satisfaction by simplifying billing and payment processes
– Reduce staff workload and improve overall efficiency
– Simplify your billing and collections processes with automated reminders and follow-up.

Services Offered by One Dental Billing

One Dental Billing provides a wide range of A/R management services, including:

– Insurance Verification and Eligibility Checks
– Patient Insurance Billing and Claims Management
– Accounts Receivable Management and Collection
– Payment Reminders and Follow-Up
– Practice Financial Reporting and Analytics

So why wait? Let One Dental Billing help you maximize revenue and streamline your billing process today!

Conclusion

Managing outstanding accounts receivable is crucial for a dental practice’s financial health. The key takeaway from this article is that carrying a high A/R balance has a serious impact on collection ratio and overall profitability. By implementing our recommended tips, such as keeping a close eye on the A/R aging report, setting a clear billing policy and optimizing A/R collections, your practice can decrease A/R and increase revenue. One Dental Billing offers outsourcing services to manage your A/R, providing a cost-effective solution for practices. Don’t let A/R get in the way of your practice’s success.