Archive for the ‘Accounting’ Category

Building a Caring Collection Team

Tuesday, November 6th, 2018

By James V. Anderson, DMD, CEO/Founder eAssist Dental Solutions

Many dentists don’t charge enough for their services because they don’t have a real sense of what they should charge.  They don’t want to scare their patients or appear greedy.  Their fees were set years ago, sometimes at the practice inception, and they may raise some once a year, every four years and many not at all.   It is an inconsistent system based on what the insurance is paying at UCR or what the competitors are charging for the same service.  Because of these variables, the dentist is often confused as to whether the charge is fair or not.

Other businesses set their charges based on costs to operate the business (overhead) and what the market will bear.

Dental office managers will tell you to “keep the doctor away from the desk” because they are apt to give discounts or free services when they don’t need to.  This is far too common in the dental profession, but it doesn’t have to be this way.

Building good solid relationships with patients includes great service and dental care – and in turn, payment for the services rendered.  When the dentist gets involved with collections, it becomes a hit and miss result depending on their personality and comfort level with the patients.  “Throwing money at the source of your stress doesn’t make the stress go away.”  You still have to pay your bills.

First step is to do a sound fee analysis based on current data for your geographic area at: https://www.dentaleconomics.com/articles/print/volume-108/issue-4/macroeconomics/the-dental-economics-annual-fee-survey.html and then adjust them accordingly to be at the 80th percentile.

Second step is to have firm but friendly financial arrangements and options available for your patients to choose from. These options would include outside dental lenders: https://www.carecredit.com/dentistry/ and short term 90-day same as cash plans in-house to patients with good standing credit.

Third, have a support team: https://dentalbilling.com that doesn’t include the dentist to collect and follow-up on unpaid insurance claims and unpaid patient portion of the accounts receivables. Outsourcing this service will free up your team to spend more time with patients on positive outcomes of treatment acceptance and appointment/scheduling control. Professional billing experts can set up your computers with PPO fee schedules so patient estimates are far more accurate.  Your front office person(s) does not have the time to do this chore.

Having a dedicated collection team who works insurance and patient portion the way you want is far more successful than the “hit and miss” system, with all its inconsistencies, that causes patients to leave your practice.

Dr. Anderson headshotJames V. Anderson DMD is a practicing dentist in Syracuse, Utah and is the CEO/Founder of eAssist Dental Solutions, the largest national dental insurance billing company (www.dentalbilling.com) in the U.S.    

Dr. Anderson understands the challenges facing today’s dental teams and since 2009 has been providing proven solutions to dental/medical insurance billing, patient portion billing, accounting for dentists and related management services. 

He can be reached at james.anderson@eassist.me

3 Types of Problem Patients Who Are Actually Hurting Your Practice

Monday, August 13th, 2018

By Sally McKenzie, CEO of McKenzie Management

Attracting and keeping patients is a vital part of any dentist’s success. It doesn’t matter how talented you are clinically if you don’t have any patients to treat. To meet your financial goals, you must build a strong base of loyal patients—but you also need to attract the right kind of patients.

Unfortunately, there are some patients who actually hurt your practice. Here are three types of patients who often end up doing more harm than good, and the changes you can make to help them become the type of patients every dentist wants in their practice.

1. Patients who are always late on their payments. Patients accept treatment, then forget they actually need to pay. They usually pay eventually, but only after team members spend valuable time sending reminders and calling them on the phone.

How can you get patients to start paying on time? First, establish a clear financial policy. When patients make an appointment, make sure they understand when payment is expected. Don’t leave any room for confusion. I also recommend offering third party financing from a company like CareCredit. This enables patients to pay in small chunks each month, making the cost of dentistry much more manageable. You get paid on time, and patients are also more likely to go forward with treatment they otherwise couldn’t afford.

2. Patients who don’t value the dentistry you provide. When patients don’t value dentistry, they don’t make it a priority. So if something else comes up that conflicts with their scheduled appointment time, they don’t feel bad about canceling at the last minute or simply not showing up at all. These broken appointments bring chaos to your day and often keep you from meeting production goals.

Spend time educating patients about the value of the services you provide. This education can come in the form of images from an intraoral camera, radiographs, videos and even brochures. Make sure patients understand why maintaining their oral health is important to their overall health, and the possible consequences of not going forward with recommended treatment. I also suggest confirming with patients two days ahead of their visit, giving you time to fill open slots if they have to cancel.

3. Patients who show up once never to be seen again. Patients come in for their new patient appointment, you think the visit goes great, but you never hear anything from the patient again—and you have no idea why. Patients don’t come back simply because they didn’t have a good experience. Once patients are in the chair, focus on building a rapport. Ask them about their families, their jobs and their oral health goals.

Patients are the lifeblood of your practice, but sometimes they can actually cost you money and create extra stress. Making the necessary changes will help turn these problem patients into the loyal patients your practice needs to thrive.

Sally

 

Sally McKenzie is CEO of McKenzie Management, www.mckenziemgmt.com, a full-service, nationwide dental practice management company. Contact her directly at 877-777-6151 or email sallymck@mckenziemgmt.com.

 

 

Collections and Your Practice: Success with Patients and Insurance Companies

Tuesday, March 20th, 2018

Guest post by Dawn Christodoulou, President/Owner of XLDent

Practice collections have started the trend towards a steady drop in what dentists are collecting for their work. Without a thorough understanding of insurance benefits and collection policies, paired with a good communication strategy, the ripple-effect on staff morale and productivity can exacerbate this decline.

Insurance Collections

Submitted claims is a first step to insurance collections. If weeks pass before anyone confirms that claims were received and being processed, that time has been lost. Insurance carriers do not make a habit of contacting dental practices to let them know if additional critical information or documentation is needed. Electronic claim services embedded in a practice management software are your first line of defense. For example, in XLDent, with one-click, claim status tracks claims instantly; easily avoiding costly delays.

Fee Schedules XLDent.TND.Blog.Electronic.Claims.Status.3.21.18.jgep (002)are a critical part of making sure your office is making accurate contractual adjustments. EOBs are not always the easiest to decipher, especially for staff with little or no experience with insurance billing. Ensure your team is prepared with payer contract details and fee schedule information so they can post accurate adjustments. Patients will appreciate attention to this detail too, so that your treatment plan estimates are as close to accurate as they can be.

Patient Collections

Every practice should have a written financial policy that lays out the terms involved with insurance processing – what is filed, by whom, and where the responsibilities lie. Payer structures and guidelines can change, so review this policy annually, and adjust it as needed. Any changes should require an updated review and signature from your patients.

It’s no surprise that Standard Operating Procedures (SOPs) guide your practice through critical business processes, and collections are no exception. Establish a collection’s timeline, which includes number and frequency of communications, and consequences for non-payment. Practice administrators should adhere to them, but not without exception. Administrator’s should bring any individual patient concerns or circumstances that need review to the practice owner for further discussion.

Think about how patients want to interact with your practice nowadays, including making payments. XLPortal is a comprehensive solution allowing patients to not only make payments online, but also verify and update medical forms before an appointment, view upcoming treatment plans, and more. Convenience can often be a compelling factor in getting that payment sooner rather than later.

The best way to tackle collections head on is to start with the basics. There is always an opportunity to turn declining collections around, and practices just starting out should strive to establish successful procedures from the start.

To connect with XLDent, call 800-328-2925 or email xldentinfo@xldent.comDawn

Dawn Christodoulou is the President/Owner of XLDent. She has more than 25 years of experience computerizing dental offices and helping both new and established practices streamline electronic workflows for increased efficiency, improve patient engagement, and achieve maximum profitability. Dawn is also a member of ADA SCDI Working Groups 11.1 Standard Clinical Architecture and 11.9 Core Reference Data Set.

Make an Informed Decision Whether to Lease or Buy

Thursday, April 30th, 2015

Whether establishing a new dental practice or taking steps to expand your practice, as a business owner, you face difficult choices. One crucial decision is whether to invest in commercial real estate (CRE) or to lease space. Before you decide, weigh the pros and cons of a lease vs. buy, take steps to learn the current CRE climate, and surround yourself with experts who can smooth your path.

First Step: To Lease or Buy?

A lease might appeal to you if future space requirements are uncertain, or you require cash for equipment and marketing. The upside of leasing is that it typically doesn’t require a large down payment, leaving you with cash available to focus on running your practice. Plus, you don’t have property ownership and maintenance responsibilities.

Lease arrangements have one major drawback: You aren’t investing in your future. As property values increase, your landlord — not you — benefits from the property’s investment. The landlord also might limit improvements you can make to the space. Retrofitting existing space for a dental practice could cost $150,000 or more. And, once you invest in improvements, consider that this is the space that you don’t own. If you outgrow the space, you will start over in a new location, losing your initial investment in the process.

If your goals are longer term, and you wish to use your property as an asset toward future retirement, consider buying. Purchasing property sometimes requires an up-front investment, but can often be mitigated by a lender who specializes in dental financing.

For new construction or purchased CRE, your loan can be amortized over 25 years, in some cases resulting in monthly payments similar to a 10-year lease agreement. Owning your property and building gives you a blank slate. You can develop and modify space as your office changes and grows. Or, you can allocate space to lease to other tenants, which generates a new revenue stream. Another benefit is that owning CRE property comes with multiple tax benefits.

Steps two and three will be highlighted in a follow up article.

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Screenshot 2015-04-24 14.15.33

JP Blevins joined the Live Oak Bank team in early 2011 and initially spent much of his time educating young professionals about financing and how to best maintain and grow their business. Assisting healthcare professionals in achieving the “American Dream” of ownership, JP is a Loan Officer and General Manager working exclusively with the dental and medical community nationwide.

JP can be reached by phone at 910.796.1674, or email jp.blevins@liveoakbank.com

Take Control of Your Debt

Friday, March 6th, 2015

The more control you have over your personal debt, the better position you’ll be in to negotiate a practice loan at the most favorable interest rate and terms, counsels Mike Wilson, a Certified Financial Planner™ professional in Orland, Indiana. Here are eight tips Wilson suggests for taking charge of your debt.

Favor “good” debt over “bad” debt. Good debt is related to anything that increases in value over time—like educational or business loans. Bad debt does not typically result in an investment in yourself or your future—for example, running up your credit card to pay for an expensive vacation or taking out a loan for a chic new SUV.

Follow the 28/35 rule. According to Wilson, aim to spend no more than 28 percent of your gross income (before taxes) on your mortgage payment or rent. No more than 35 percent of your gross income should be used for all personal debt payments, including a mortgage, car loan, student loan, credit card payments, and so on. “This rule of thumb has been around for decades, and it’s still valid,” he says.

Pay bills on time. Late payments hurt your credit rating.

Apply only for the credit you need. Having a lot of credit cards can count against your credit score.

Pay your credit card balance in full every month. Or at least pay more than the minimum due to keep interest costs as low as possible.

Pay down debts with the highest interest rate first, instead of debts with the highest balance. You’ll save more money in the end by eliminating costlier debts first.

Consolidate educational loans when appropriate. It’s more convenient to have just one student loan payment, but Wilson says to make sure the interest rate on a consolidated loan is not higher than you’re already paying. In addition, look for a loan consolidation plan that gives you several repayment options with the ability to switch between them as your circumstances change.
(For more information, visit www.loanconsolidation.ed.gov.)

Use insurance to manage debt risk. When you have life insurance, you know that the insurance benefit can help repay your debts if you die unexpectedly, rather than burdening your family with these obligations. Similarly, if you are disabled, a monthly disability insurance benefit can provide a source of income to help make your loan payments and cover other business and personal expenses, thereby protecting your credit rating.

The Profitable Associate

Wednesday, October 1st, 2014

Can an associate generate a profit? The answer is in the size of your patient base. If you have a saturated practice with an abundance of patients, you can keep your associate busy and generate a 30-35% profit margin.

The first step after accurately measuring the size of your patient base is to perform a cost benefit analysis to determine the likelihood of profitability, as well as to gauge the non-monetary benefits such as improved quality of life, which may be equally important. The following steps will help you analyze the economic sense of hiring an associate, and will help you set realistic expectations about the return on investment you are likely to attain.

Step 1: Determine Production Goals

Step 2: Assign Direct Expenses to the Associate

Step 3: Apply the Formula and Get the Answer

Associate Profit Analysis Summary

Daily Collection – $950
(Assume 95% Collection/Production Ratio on Daily Production Goal of $1000)
# Days Worked Per Year X 196
Projected Annual Revenue $186,200

(Assume 34% Collections) Associate Compensation – $63,608
(6% Dental Supplies) Associate Payroll Taxes – $4,843
(8% Lab Expenses) Associate Lab Expense – $14,896
Associate Supplies – $11,172
Assistant Salary (inc P/R tax) – $21,620
Uniforms – $200
CDE Allowance + $1,100
TOTAL EXPENSES – $117,439

Projected Annual Revenue: $186,200
Less TOTAL EXPENSES – $117,439
Associate Profit: $68,761

PROFIT MARGIN: 37%
($68,761 PROFIT / $186,200 ANNUAL REVENUE)

Once you’ve assured yourself that the economics make sense for your associate, proper planning is key. Most importantly, if this associate is a candidate for your long term transition plans, make sure that you properly think about your exit strategy so that once you begin interviewing candidates, you clearly spell your vision for a successful relationship.

To read the original article in its entirety please visit: The Dentist’s Network Newsletter #100
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Dr. Thomas L. Snyder, Director, Practice Transitions for The Snyder Group, a division of Henry Schein Professional Practice Transitions.

Fee Increase? Know Where Yours Stand First

Thursday, April 10th, 2014

The price of gas is going up again with $4.30/gallon in some parts of the country. Perhaps It feels like the latest volley in the seemingly never-ending match between economic recovery and continued uncertainty. The good news – it doesn’t appear that the upsurge is having a detrimental impact on overall inflation.
 
For dental practices that are seeing improvements in new patient numbers, patient retention, and treatment acceptance, there can be a general sense that the time is right for an increase in their own fees. Certainly, many practices have made a concerted effort to keep the cost of treatment in check the last few years. And as a result, some practice owners may feel it’s time for an economic adjustment.
 
However, with such jolts to the wallet as $4 gas prices, dentists must continue to be cautious about fees and think carefully about how they can best compete in today’s marketplace. I recently had the opportunity to catch up with Tom Limoli, Jr. He is a noted expert on proper coding and administration of dental insurance benefit claims, and he serves as president of Limoli and Associates, which assists dental offices in establishing fee schedules and managing insurance reimbursement. Tom has watched the business of dentistry for many years. The common practice in the past for practices was to increase fees 3-5% annually. It was a widely accepted standard in the industry. Today’s dentists, however, are encouraged to take a different approach and base fees on true overhead. In other words, what it is costing them to actually deliver the dentistry.
 
In setting fees, Tom notes that dentists need to be very aware of where fees stand in the area that they are practicing. It would not be advisable for a dentist to set fees that are at or exceed the marketplace. “Don’t establish your fees based on the dentist down the hall or across the street. Your fees should be based on your overhead, expenses, patient base, your individual level of professional expertise, and debt,” notes Tom. In addition, dentists should be wary of creating a fee schedule that is too high or too low because it is based on third-party reimbursement rates. “You don’t want to trap yourself by attempting to establish your office fee schedule based on what some third-party payer reimburses at 65% of the 85th percentile,” he explains.
 
Additionally, dentists need to recognize where they are on the skill continuum. For example, newer dentists do not perform dentistry at the same speed as more experienced doctors. For these doctors, what they don’t have in speed they can make up in relationship building. Similarly, for dentists establishing new practices it can be particularly beneficial to hold off on hiring a hygienist right away. It allows the dentist to focus on building one-on-one relationships with patients and will help keep overhead down until production increases and it makes financial sense to add a hygienist to the payroll. As Tom emphasizes, when patients have a relationship with their dentist, they don’t question the fee. Building good relationships with patients has never been more important.
 
Dentists also need to be cautious about setting fees too low for some services and too high for others. In the past, it was not uncommon for dentists to keep hygiene fees unrealistically low, and then make it up with much higher fees for other procedures, such as crowns.
 
In many areas of the country we are seeing smaller treatment plans, and that is translating into steady production and financial success for some practices. Regardless of practice location, what is imperative for every dentist in today’s marketplace is paying close attention to what the patients want and why they are coming into the practice. Addressing the smaller issues and offering more conservative restoration options, provided they are in the patient’s best oral health interest, can be absolutely critical in some situations before recommending larger, more extensive alternatives.
 
One thing is true across the board – the doctors who are successful in today’s economy have a relationship with their patients. They are focused on providing the level of dentistry that achieves the greatest return for the patient. After all, patients are no different than the rest of us. They want to know they are getting the most value for every dollar they spend, be it at the gas pump or in the dental practice.
 

Budget for Technology

Tuesday, October 15th, 2013

Without a budget, the cash outlay for technology can quickly become overwhelming for the doctor and the practice. But how much is enough? The truth is that every practice and every practitioner has different needs and wants. While the numbers may vary, there are some guidelines that you should factor into the budget:

 

1. New computer hardware every 36 to 48 months.

2. Practice management software, regular updates, and unlimited support.

3. On-site professional technical hardware and network installation and maintenance, unless you are using a Cloud-based system.

4. A minimum of 16 hours of on-site software training annually.

 

On the clinical side, the typical annual budget would include expenses for both operations and clinical information management and purchases, such as the following:

 

1. New computer hardware every 36 to 48 months.

2. Practice management software, regular updates, and unlimited telephone support.

3. All clinical software upgrades to the practice management software.

4. Digital X-rays, digital imaging (camera), imaging software, periodontal probing, etc.

5. On-site professional technical hardware and network installation and maintenance.

6. A minimum of 32 hours of on-site training each year.

 

Next to dental school, practice technology is probably the biggest investment you will make in your career. And like virtually any other product on the market, you get what you pay for, so prepare and invest your dollars wisely. Develop a plan, establish a budget, and arrange to professionally train your team.

Tax Saving Strategies Part II

Wednesday, March 6th, 2013

In continuation from our previous Tax Saving Strategies post, Dental CPA Ken Rubin has shared with the New Dentist™ some additional insights about business profitability maximization.

 

Ken says your CPA can also do the following for you:
• Select the best choice of business entity and retirement plan for you
• Advise you on whether to purchase or lease equipment and cars
• Claim tax credits for disabled access, crown manufacturing, employee health insurance, new hires, etc.
• Set up medical expenses reimbursement plans, HSAs, and cost segregation studies
• Train you and your staff on QuickBooks™
• Analyze various loan options available
• Monitor your practice’s key performance indicators, business metrics, and your profit and loss statements
• Update you on developments affecting the business side of dentistry and changes in tax law
• Keep you in compliance with the taxing authorities and give you advice to operate more profitably and efficiently

 

IRS auditors acknowledge that “it takes money to make money.” Basically, anytime you spend money in order to help your business, the expenditure is tax deductible. Sometimes the connection is not obvious.

 

Read more on Tax Strategies for The New Dentist at

http://www.thenewdentist.net/magazinelibrary/spring_2013.htm?startid=6

 

 

Ken Rubin & Company, Dental CPAs has been providing proactive tax, accounting, and business consulting services to dentists since 1984. Ken is the co-founder of the Academy of Dental CPAs (ADCPA). He is committed to improving the quality of his clients’ lives and can be reached at www.CaliforniaDentalCPAs.com or (619) 299-6161.

Tax-Saving Strategies

Tuesday, February 26th, 2013

Dental CPA Ken Rubin has shared with the New Dentist™ his tax saving insights.

 

Ken says that early in your career, you should spend time with your CPA learning the following basic items to prepare and save money for tax season:

 

• Proper record-keeping needed to survive an IRS audit
• Tax-deductible automobile business mileage
• Business car deduction – for your spouse
• Tax-deductible meals and how to handle the record-keeping
• Tax-Deductible Trips
• Lock in a home office deduction
• Maximum tax deductions for charitable contributions
• Legally put your kids on the company payroll

 

Read more on Tax Strategies for The New Dentist at

http://www.thenewdentist.net/magazinelibrary/spring_2013.htm?startid=6

 

 

Ken Rubin & Company, Dental CPAs has been providing proactive tax, accounting, and business consulting services to dentists since 1984. Ken is the co-founder of the Academy of Dental CPAs (ADCPA). He is committed to improving the quality of his clients’ lives and can be reached at www.CaliforniaDentalCPAs.com or (619) 299-6161.