March 13, 2017
When a dental practice is sold, the purchase is almost always financed by a bank. With rare exception, the borrower is able to obtain 100% financing of the purchase price. Accounts receivable associated with that same dental practice are financed very differently. Banks do not finance at 100%. The typical arrangement is payment of 90% for balances that are under 30 days, 75% for accounts between 30 and 60 days, and only 50% on accounts that are 60 to 90 days old. Banks understand that there is only a 57% chance of collecting in full on an account that is 60 to 90 days past due.
In the ideal world, there would never be a need to send a patient a bill. With a properly executed financial policy, payment should be received at the time of service. I always wonder why is a dental practice the only store in America where you can leave without paying for your purchase? That, of course, is a topic for another day.
For any number of different reasons, dental practices send out a large number of monthly statements. It is a time-consuming and expensive task. Obviously the cost is a great deal more than the 47 cents for postage. And it apparently is not an effective tool for collecting money when you look at a typical aging report. We all know that the older the account gets, the harder it is to collect. But what should you do to shorten the cycle? When do you consider an account to be delinquent? Is it after two or three monthly statements with no response? Is it after a few attempts at making a collection call?
I would like to suggest for your consideration a different approach that involves outsourcing much of the collection process. Transworld Systems Inc (TSI) is a leader in dental collections. They’ve been in the business of helping dentists collect money for 46 years. TSI has partnered with Sikka Software Company to bring dental practices a unique receivables management tool called Dental Collect. Dental Collect integrates seamlessly with all of the major dental practice management systems. It helps to increase overall cash flow while saving time and maintaining patient diplomacy.
The Dental Collect platform begins when a practice identifies a non responsive patient payer. In my opinion, that should be 15 days after the second statement was mailed. The data is sent securely to TSI and is totally HIPAA compliant. TSI Technology generates five contacts with the patient over the next 30 to 40 days. They use a combination of written reminders and telephone calls that appear to come from the practice itself. This is a frequency of touches that no practice has the time or technology to do on their own. The systematic approach is designed to help keep the patient in the practice for a lifetime. No practice wants to lose patients. With TSI, all patient payments go directly to the practice. TSI charges a fixed fee per account of about $10.
The take away message here is that to improve collections, patients with overdue balances need to be contacted earlier than later. The results speak for themselves. I recently wrote a blog about leaving your comfort zone. This may be the perfect opportunity. Setup and training with TSI is accomplished remotely in one hour. Their customer support is free and responsive. Give Charlie Colarullo a call at 508-361-2095. He can arrange an online demo to further explain the details of this remarkable technology.
No comments yet.
RSS feed for comments on this post.
Sorry, the comment form is closed at this time.