Dentaltown April 2015 - (Page 88)

finance feature Improve a Dental Practice's Fiscal Health by Proactively Managing A/R Days by Richard Moore, MBA, CPA Regarding the fiscal health of any business, "Cash is king" is a popular phrase to describe the importance of cash versus accounts receivable (A/R). Access to cash enables a dental business to purchase supplies and equipment when needed-without incurring additional debt-and to pay wages in a timely manner at a level needed to sustain an experienced, skilled team. However, the need to reduce A/R days as a way to improve a practice's cash flow is not always seen as a critical, strategic issue as long as the practice is receiving enough payments to cover expenses. Ideally, a dental practice should have no more than 20 percent of A/R aged 60 days or more, and the ratio of total A/R should be less than or equal to one month's average production. Practices that establish these goals ensure fiscal sustainability, even if competitive pressures, changes in reimbursement, or unforeseen business challenges affect the business for a short time. Reaching these goals requires a holistic approach to improving collections and reducing claims denials-the two factors with the greatest impact on A/R days. No matter where dentists and practice managers are in the process of reducing A/R days, they must overcome a number of challenges to effectively reach their goals. Challenges can include a lack of: * Awareness for the true effect of uncollected accounts on a practice's bottom line, * Clear financial policies related to collection of patient responsibility, * Business/financial technology to support a robust revenuemanagement program, 88 APRIL 2015 // dentaltown.com * Well-defined workflow processes that ensure collection of accurate data upfront, * Communication between practice team members. Education addresses several key challenges A critical first step to reducing A/R days is educating all team members about their roles in the revenue cycle, in order to create a culture that supports financial sustainability. For example, they must understand that reduction in A/R days not only means improved cash flow to purchase equipment or renovate offices, but it also reduces the workload for them by eliminating administrative efforts tied to correcting claims or collecting unpaid balances. Fewer shortcuts are taken during scheduling, intake, claims creation and billing processes when employees understand how their actions affect the ability to collect from patients or to file a clean claim. According to Lisa Blair, operations manager at Inspire Dental Group, all team members at the group practice understand the importance of their roles in the revenue cycle. When the frontdesk employee understands how critical it is to gather all the information needed to file claims correctly, Blair explains, it's less likely that patients will be sent back to the dentist or hygienist for treatment with only part of the information verified. Although not all employees are directly involved in collecting payments, fi ling claims or interacting with insurance companies, Blair reinforces the practice's holistic approach to the revenue cycle by incorporating financially related activities in each morning meeting. For instance, team members are informed if a patient http://www.dentaltown.com

Table of Contents for the Digital Edition of Dentaltown April 2015

On Dentaltown.com
HOWARD SPEAKS: When Staff Members Lose Hope
PROFESSIONAL COURTESY: Recommendations Refl ect You
Continuing Education Update
Industry News
Poll
Lateral Incisor Placement with CEREC
Oral Cancer: Stop Assuming and Start Screening
CE: Removal of Hemangioma, Fibroma and Performing a Frenectomy
Braces V. Aligners: As Technology Evolves So Do Patient Choices
Malpractice: Changing the Way We Practice
Treatment Planning for Implants in the Maxillary Edentulous Patient
You Should Know: Molar Media Mount
Collecting Trauma Pictures for a Lecture
A Progressive Treatment for the Over-Flared, Over-Prepared Endodontically Treated Tooth
New Products
Creating a Safe, Effective X-ray Practice
SmartBox: Marketing Prodigy Masters Patient Attraction
Facebook Updates and the Impact on Your Dental Practice
Improve a Dental Practice’s Fiscal Health by Proactively Managing A/R Days
Pennsylvania Doc Balances Professionalism and Humor
Ad Index
Product Profile: Ivoclar Vivadent
Perspectives: Being a Female Dentist in Yemen
Products in Practice: DENTSPLY
ULTRASONICS SHOWCASE
Ready, Set, Know: Making the Most of Your Dentrix Investment
Dentally Incorrect

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