Challenges in insurance payments largely occur between insurance carriers and dental practices. While a practice seeks to collect payments from carriers, insurance companies reject claims that don’t fall within their parameters of acceptance, and this happens often.
Add the complexity of claims processing to that, and we can see an average practice forfeiting around 9% of its yearly production to uncollected insurance revenue. If you take a moment to think about it, this is revenue that has been rightfully earned and owed to the practice.
When you crunch the numbers, the ramifications are astonishing.
Annual revenue generated by an average dental practice is around $1,500,000
The average annual revenue lost in uncollected insurance benefits is around $135,000
Average uncollected revenue over 30 years: $4,050,000
To add insult to injury, to write off the debt as uncollectible, a practice has to clear audits by the IRS and prove that it has taken reasonable steps to collect the debt but was unable to do so.
The complexity of dental insurance billing has made this ‘task’ into a full-time skill-based ‘job.’
Considering the range of responsibilities handled by staff, such as engaging with patients, presenting treatment plans, answering phones, keeping the schedule full, managing staff, and maintaining the office, it becomes difficult for them to contend with all that is required. This includes preparing and submitting insurance claims, appeals, and follow-ups on receivables. Even the most committed office managers inadvertently have a negative impact on cash flow.
A general approach at dental practices that are considered efficient is to deal with claims in batches. They set aside one day in a week or a month for these tasks. The flip side of such an approach is that many claims and payments get delayed, with missing or incomplete information that stacks up the pending paperwork. Outside the most obvious impact on cash flow, delayed submissions result in a wasted investment of time and efforts of your staff.
Pulling together missing or revised information can set them up against claim deadlines and appeal processes that might not always yield results. The strain on time for your staff resources sets them up to unsuccessfully contest a commonly acknowledged ‘fact’ – delayed collections with outstanding balances over 90 days are unlikely to get settled.
But let’s say that you are able to afford a qualified professional who handles nothing else but dental insurance billing and A/R collections. Even if this were the case, instances when your employee is on extended leave or quits their job leave you at a disadvantage with the added investment of hiring, onboarding, and training new staff. These short-term setbacks have long-term consequences. Meanwhile, your collection mechanism grinds to a halt and severely impacts the cash flow at your practice.
Another high-impact obstacle to insurance payments is their impact on your patients. While you prioritize patient health, a typical patient generally prioritizes their finances before health. Your patients depend on you to help them navigate through the maze of insurance benefits to which they are entitled. This is understandable as it’s difficult for a common consumer to comprehend their Explanation of Benefits (EOBs).
Undoubtedly, accurate financial processes are a large part of the patient experience. Any errors, when it comes to benefits coverage or surprises regarding out-of-pocket payments, irrespective of whether the fault lies with you or not, erode patient trust. Once a patient loses trust, it’s difficult to patch it back up.
Inarguably, filing insurance claims and appeals is a complex process. Let’s look at the following figures to better understand its scope of complexity.
There are 250+ insurance companies offering individual and group dental insurance. Each has its own befuddling prerequisites, claim requirements, and benefit limits. While filing, there are 700+ dental codes and over 10,000+ codes for specialists and medical billing. To complicate matters further, you must deal with constantly changing state and federal laws and regulations, followed by a diverse range of appeal processes for every insurance company.
Having adequate checks and balances in place is a wise business practice. Especially when you consider that two-thirds of all dental practices in the U.S. have reported being a victim of fraud or embezzlement. With consistent staff turnover, human error is a prevalent reality in dental billing.
To excel in insurance billing and payments requires knowledge, experience, and efficient processes. Challenges in maintaining the right staff and expertise, managing staff turnover rates, and the ever-evolving complexities of the insurance ecosystem, makes outsourcing dental billing a viable alternative. The core responsibilities handled by your practice, naturally make it difficult to provide uninterrupted time, attention to detail, and the consistent focus required for insurance collections. Hence it is vital to seek out a dental billing support provider with high-caliber staff, round-the-clock support, and an excellent track record.
The logical next question is about the cost viability of outsourcing dental billing. An objective cost vs. benefit analysis will provide the data necessary to make the right decision.
For instance, a full-time employee trained in EOBs and A/R management will cost around $20/hour. This cost becomes significantly higher if you recruit highly experienced individuals. The annual cost of having a full-time employee will be at least $36,000 or higher. This is excluding benefits, taxes, or other compensation. It seems like a good exchange to invest $36,000 a year to collect $135,000 in uncollected revenue. With that said, the comparative costs of outsourcing are lesser and provide immense value returns.
The most evident benefit of outsourcing will be an increase in your annual revenue collections. Dental billing services include patient enrollment, eligibility checks, claims submissions, dental coding, billing charge entry, A/R follow-up, payment posting, and denial management. The benefits of outsourcing insurance billing include:
Faster payment processes and improved cash flow
Reduced instances of billing errors and improved claims acceptance rates
Reduced paperwork and billing errors for clean claims submissions
Avoid the time, cost, and efforts required to train in-house staff
Leverage professional expertise to manage receivables and ensure timely collections
Reduce the percentage of outstanding A/R
Avoid tax issues that arise from late payments
Before you outsource insurance billing, it is important to understand the breadth of services you will receive from a dental billing company and how they will make it work. This includes watching out for hidden costs and examining how their technology and processes integrate with your practice systems. Other points of consideration include the terms of the contract and whether the company offers related services that would benefit you now or in the future.
Dental companies partner with practices that generate a sizeable amount of claims. This means your practice should meet its threshold for claims generated at a practice. In such cases, you should consider partnering with other practices to collectively cross their minimum criterion.
Opting for outsourcing would still require certain billing activities that would need to be performed at your practice. Assess if it’s a viable option to outsource all activities or if it makes sense to maintain certain activities at your practice. Examples of this would be all billing-related patient communications and gathering patient information.
Another key point of consideration is with regard to your working relationship. Will you be assigned account managers that dedicatedly work alongside your practice? You must conduct a thorough background check to assess the track record of the billing company and examine the insurance companies to which they submit claims electronically. All said, it’s safe to request a trial run on all services offered before you decide to outsource.
An outsourced billing company should typically offer:
Experienced professionals with expertise in medical coding and billing
Access to a state of the art billing software
Ensure that the billing systems are up to date
Know how on changing regulations and insurance procedures
Provide in-house staff training on coding and billing rules
Troubleshooting and timely communication with in-house staff when it comes to discrepancies with claims
Provide on-demand performance reports and data charts
Improve the success rates for appeals
Flawless and timely claims submissions are an integral part of practice revenue. When you are focused on providing quality dental services and patient care, it becomes hard to accept the loss of revenue that comes from insurance billing. This is where outsourcing dental billing becomes a significant consideration. With an experienced company taking care of billing-related activities, you can focus on what you do best. Improve the quality of your dental procedures, build a unique patient care experience, and develop long-term relationships with your clients. You can continue to do what you do best, without worrying about uncollected revenues.