$ Revenue Cycle Checkup

Running a dental practice isn’t easy. Successful practices have owners who are financially astute, track expenses, monitor their revenue cycles and ensure that the business is profitable. Recent surveys have reported that significant and lasting shifts have occurred in consumers’ spending patterns, especially when it comes to healthcare. Consumer demand for dental care has leveled off and caused dentists across the country to see an increase in capacity and a drop in earnings; making it even more challenging for dentists to maintain the right balance between revenue and expenses.

Critical factors include establishing internal controls to prevent fraud and embezzlement and setting up patient payment systems that provide a positive patient experience and maintain their loyalty to your practice. Having a clear, documented financial protocol and getting buy-in from your dental team members is important, as they likely have the day-to-day responsibility for the office’s revenue cycle.

If you accept assignment of benefits from patients with some type of dental benefit coverage, make sure you collect the anticipated amount the patient is responsible for, at the time of service. Don’t wait to collect the private-pay portion of the bill until after the third-party payment has been received. Sometimes, there might be a balance due from patients after you receive the payment of benefits, even though patients have paid their estimated portion of the bill at the time of service. When that happens, immediately communicate with the patient, indicating the balance which is due.

It is important to note that the Payment Card Industry Data Security Standard (PCI DSS) is a set of requirements to ensure that all merchants that process, store or transmit credit card information, maintain a secure environment. Compliance with these standards is generally required in the agreement between the dental practice and the credit card company or processing entity. PCI DSS requires that merchants satisfy twelve different elements of a program aimed at maintaining the security of credit card information. The requirements include many technical components such as maintaining data encryption, firewalls, and anti-virus protection. It also includes team training and maintaining a list of service providers who have access to the dental practice’s payment card data. Remember, if you store data such as a patient’s credit card number – you are responsible for its security. Credit card disputes and chargebacks are a complex discussion for another time.

Since most patients don’t budget for dental treatment, concern about costs may cause them to postpone treatment or to decide against it. Many practices offer internal or external programs to help patients finance treatment without maxing out their personal credit cards. Knowing there are options to financing treatment often increases case acceptance rates and can significantly reduce the amount of time a patient needs to decide about proceeding with treatment.

When managed properly, financing programs make good business sense for your patient and your practice. Regardless of which approach you take, it’s important to be selective about which options you offer to which patients. It’s also important to be aware that certain financing programs could result in the practice being considered a “lender,” especially if in-office payment plans offer patients more than 90 days to settle accounts. Complying with Truth-in-Lending regulations, which exist at both the federal and state levels, can be a very arduous process. For these and other reasons, many practices opt to out-source financing and payments to a third party such as CareCredit.

While you might want to do everything you can to help each patient cover the cost of treatment, in-office financing should not be offered to every patient. Criteria to consider before discussing this option includes your relationship to the patient, the patient’s ability to pay, payment history, the type of work being done, and the value of the treatment plan. Managing a financing program can require a significant amount of time, so make sure your designated team members have sufficient time to be certain that payments are credited to the correct accounts. Increasingly, the regulatory environment for this option, is demanding.

For example dental offices are considered “Creditors” as they seek to comply with Regulation Z of the Federal Truth in Lending Act (TILA) Regulation Z. Required compliance with this regulation includes offices who extend consumer credit regularly and those where the payments are initially payable to the practice, either by written agreement in more than 4 installments or are subject to a finance charge. Need to review the 317 TILA pages? (http://files.consumerfinance. gov/f/201503_cfpb_truth-in-lending-act.pdf)