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How to Expedite Dental Payments and Collections
Imagine for a moment you're working on some paperwork in your office. Suddenly you remember it's the 19th of the month -- and you've forgotten to send out invoices. You get a sick feeling in your stomach because you know your patients won't remember to send a check without a reminder. Your bills are due, and you're beginning to panic.
At that moment, your office manager walks in and hands you an envelope. You open it to find it full of checks. Every last one of your patients has paid their monthly payment in full, without an invoice, and all at the same time!
A dream? Not if you've taken advantage of the newest form of patient payment -- pre-authorized checking.
Actually, pre-authorized checking, or bank drafting as it's commonly called, has been around for a long time. In fact, you might have already experienced it if you've authorized monthly mortgage or insurance payments through your bank. Until recently, it's been too expensive for small to mid-sized practices to take advantage of the program. But now it's possible for any business that accepts monthly payments to take advantage of the convenience of bank drafting.
So how does it work? It's quite simple really. You or your office manager meet with the patient to discuss cost of treatment. You have already figured what dental insurance will pay, and have an estimate on the balance. Your question to the patient, "Would you prefer to pay in full by check, cash, or credit card, or would you prefer our pre-authorized checking plan?"
Patients who choose the latter option sign a form authorizing a set amount to be taken out of their checking account each month -- usually on the 4th or 19th (a few days after most people get paid). A few days before the agreed date, the company processing your bank drafts prints a check on behalf of each of the patients in the program. These checks are then either mailed or Fed Ex'd to you, and you process them on the agreed date just like any other check. The difference is that all the checks arrive at the same time, and this means you can plan for a known influx of cash into your practice each pay period.
What does it cost to switch over to the new system? To determine that, you need to analyze what it's costing you now to invoice your patients. Consider such things as postage, envelopes (both outgoing and return if you use them), invoice paper, equipment depreciation and supplies, labor costs for producing the invoice and posting it, and the cost of late notices and phone calls requesting payment. In addition, you've lost interest on that money, and there's opportunity loss -- the inability to purchase the new equipment you need, for example.
Sonya A., office manager for Warren D. Zenk, D.D.S. and Dental Associates of South St. Paul, MN writes, "Bank drafting is more convenient for our patients. There are no checks for them to write or remember to write; no late fees; no stamps or envelopes are needed and it ensures an excellent credit rating for the patient. This is also better for our office. We are guaranteed payments on time; we do not need to send statements to those enrolled; there are less collection problems and the patients are happier. It's a 'win win' situation for doctor and patient."
Are there any downsides to this program? Well, there is one. Office staff responsible for invoicing may see this program as a way to eliminate their positions. Because of this fear, they may be reluctant to support this new way of doing business. Actually, all it does is free them up for more productive activities.
While it's true these employees may have more time, imagine if that time were used to grow your practice. For example, they could contact patients who haven't had treatment on a regular basis, call and welcome new people in the community, or develop a dental hygiene program for young children.
In addition, the negative part of their old job has been eliminated -- they no longer have to make those embarrassing phone calls to patients who are late in paying. And patients are no longer embarrassed to have regular work done because they've been late with payments in the past.
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