If you own or manage a multi-dentist practice, then one of your most important responsibilities is to make sure that production and collection are tracked accurately. Nothing wrecks a dentist to dentist relationship faster than financial issues. Even if the issue was an honest mistake, trust is lost and the dentists have to rebuild their understanding of how production and collection are calculated so they can make sure they are being paid fairly.
The best time to clarify how production and collection are tracked in a dental practice is right when a new dentist joins the group. The owner dentist or accountant or practice administrator needs to sit down with the new hire dentist to review the steps of how money flows through the practice. Show the reports that the dentist will receive at end of month and walk him/her through them to understand each one. Demonstrate how the numbers flow from one report to another and end up as the dentist’s compensation. Encourage questions now and any time something seems unusual or different – the more open you are to communication on financial issues, the faster you can respond when there is a problem and avoid long periods of time when the dentists are feeling stressed over money.
Here’s how to track production and collection in a multi-dentist practice using Dentrix:
- Each procedure is charged out to the correct provider. Set up each dentist, hygienist and even assistants (if you want to track their productivity) as separate providers so you can run detailed reports.
- Review your day sheet. The Dentrix day sheet shows every charge – by patient name and exact amount and it shows every payment – by patient name and exact amount. A brief review of the day sheet by each dentist and hygienist can catch honest mistakes, such as the periodic exam goes to the dentist, not the hygienist. Or let’s say the dentist is looking through her day sheet and thinking about her day, “Whew that surgical extraction right before lunch was tough.” – then realizing, wait a minute – why don’t I see that charge on here? And find that it was accidentally charged out to the wrong dentist because the patient was planning to see another dentist in your group next week but you had a cancellation so they brought her in early.
- Pay to the provider. When whoever enters the payments, make sure that she is paying to each provider – I recommend choosing FIFO (first in, first out). You have other choices here (% or guarantor estimate or equal) but FIFO is the only one that allows you to create an exact match between production and collection. She also needs to make sure that the exact amount due to each provider is paid – and not only is the patient’s account balanced to zero, but also there are no debit/credit situations. A debit/credit occurs when one provider received too much and another provider received too little, but the patient’s balance is zero. The patient doesn’t care how you handle internal collections and compensation, but I’m guessing your dentists do care. For example, when a patient comes in for a cleaning/exam and pays in full, then the payment should be applied to the hygienist and the dentist (I’m also a big believer in updating the payment table so your Dentrix software ‘learns’ what insurance pays on each procedure and improves its pre-treatment estimates for future patients with this same dental plan.)
- At end of month, check your Provider A/R Totals report in Dentrix. (This report is gold for Dentrix users with multiple providers – if you’re not using it at every end of month, call Dentrix tech support right now and have them walk you through it. Seriously. Right now. http://www.dentrix.com/support/customer-service-plans.aspx for the phone number.) This report shows the production and collection for each provider – and it shows MTD, YTD and previous month for each as well. Even more importantly, it also shows total adjustments (positive and negative) for production and for collection. You can see how you set up your adjustments (no need to memorize this) by looking at the bottom of this report where each adjustment is listed. You can pay your providers based on this report.
- To share the financial end of month with your dentists, I recommend a few reports:
- Dentrix Production summary for the team – if the dentist has an assistant or EFDA working with him and you’ve set her up as a separate provider, then be sure to select all the team members to include all the production.
- Adjustment summary for the team – this shows the type of adjustments (both production and collection) with total amounts. The dentist can see how much was ‘given away’ on insurance withholds or new patient discounts here.
- Excel summary page – On one page, we document gross production, adjustments and net production first, then the same for gross collection, adjustments such as refunds or bounced checks and net collections. Depending on the compensation arrangement for the dentist, we also document the expenses and the profit for the month on this page. With this summary page and the associated Dentrix reports, each dentist can dig into more detail for why the finances turned out that way each month. It also provides a consistent communication of finances.
With a standardized approach to end of month, you enjoy a variety of benefits. The owner dentist benefits because a summary of each dentist’s performance is easy to gather thanks to excel. Each dentist benefits because a quick summary page saves time, the couple Dentrix reports show accuracy and more detail is available upon request.
For practices that want to think strategically, having this financial tracking system established allows for data-based decision making. For example, let’s say you track each month’s production/collection for each dentist (again, easy to pull thanks to Excel) – you can see trends over the past 2 years that might reflect when ‘lighter’ months are – suggesting that September is a wonderful time to take vacation! You can also see exactly which procedures you’re performing and set goals to improve. The opportunities are limitless once you start using data to understand your practice and then set goals and work towards them.