666: AR is a Team Sport - Dayna Johnson

Collecting money isn’t always an easy conversation, but it’s critical to the business. And it’s not just an admin task. The whole team should be learning how to get involved and support the business's profitability. Listen to expert Dayna Johnson share her systematic approach. Learn more in Episode 666 of The Best Practices Show!

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Links Mentioned in This Episode:

Dayna Johnson’s Website: https://novonee.com/

Dayna’s Podcast: https://novonee.com/podcast/

Main Takeaways:

Accounts receivable is not just an admin task. It’s the responsibility of the team. 

Your money is worth the most today. You have to collect the patient portion on the date of service.

It’s not just about collecting money, but being proactive about preserving the relationship when an honest conversation is had about the patient’s financial responsibility. 

Use a systematic daily, weekly and monthly approach to getting insurance claims paid. 

Make sure your team understands how critical profitability is and how they personally can influence the collections in the practice.

Quotes:

“Your accounts receivable is the money that’s sitting on the books. So you produce $1000 today and you only collect $500 then you still have $500 of accounts receivable. You still have money that’s sitting on the books. The accounts receivable, some of it might be coming from dental insurance companies, some of the money might be coming from patients. And so there are those two buckets of money that needs to be collected. And the reason why I say it’s a team sport because collections is not just an admin task. It doesn’t just belong at the front desk at the check out. Everyone on that team needs to understand what the patients out of pocket is today and how much do we have to collect today? And if someone on the admin team or someone at the front desk is not available to collect that money, how do I jump in as a dental assistant or doctor. How do I jump in and run the credit card through the machine and collect that money that is due today?” - Dayna (3:57—5:11)

“Your money is worth the most today. You have to collect the patient portion on the date of service. This is so critical to the profitability of the practice. Once your accounts receivable goes past even 30 days, you’ve already lost about 15% of the value of that money.” - Dayna (5:22—5:48)

“Most dental teams really don’t think about profitability…Why should I care? I work in the back. Profitability doesn’t affect me. Well it sure does because profitability is where raises come from. It’s where bonuses come from. Your new scrubs that you want to wear. Your instruments. Your team CE. All of that comes from profitability.” - Dayna (6:19—6:49)

“Being more proactive on the front end so you’re not chasing money on the back end. And it helps preserve the relationship [with the client] because you’re being open, honest and transparent with your patient about their financial out of pocket expense on the date of service.” - Dayna (9:00—9:18)

“Job descriptions and what is my primary role within the practice is huge with you understanding what your tasks are. How do I master my skills at this primary role? And then you know walking in the door every day what am I accomplishing today? What is the outcome that I want?...I see not only are admin team members not trained well, but they’re also also just a little bit confused as to what’s my primary role here?” - Dayna (10:40—11:38)

“I want you to be more proactive. It really starts from the treatment planning side because the treatment that you are going to be scheduling for the patient needs to be accurate and comprehensive and so the clinical team they treatment plan, and if they need a crown, a build up and maybe a couple of fillings and someone on the team needs to prepare that treatment plan. And of course we want to be as accurate as possible with our estimates. If the patient has insurance, we want to be able to prepare the patient for what their out of pocket investment is going to be in their next visit. My rule is a patient does not get scheduled for treatment without a financial arrangement…Because what will happen is the patient will get scheduled and they don’t know what their out of pocket investment is and then the day of the appointment comes and the patient still doesn’t know what their out of pocket is so the patient really thinks it could be $50. It could be $5,000. They just don’t know. So that’s when you’re going to have that uncomfortable situation.” - Dayna (12:14—13:32)

“Now it’s a team sport because the whole team needs to be informed of what is that patient’s copay for today. So this might happen in your morning huddle. You might make an appointment note on the appointment…the patient is informed. They might have a signed agreement already. But then the whole entire team knows from that appointment that the patient has been informed about their out of pocket. They know they owe $500 today. And so anyone on the team that is available to collect that $500 should know how to run the credit card.” - Dayna (14:30—15:25)

“So I have a pretty systematic approach when it comes to your daily, weekly and monthly systems when it comes to accounts receivable….On a daily basis, of course you balance your day so what did we produce? What did we collect? What did we adjust off? And we balance that every day. Insurance claims go out within 24 hours of the date of service. Billing statements are going out every day…When you send statements every day you’re catching those overdue balances a lot quicker…Weekly is you have a team member at your practice where their primary role managing accounts receivable. You have an accounts receivable report…and you have an insurance claims manager report you’re looking up past due claims. If the claim is over 30 days then I’m checking on the status of that claim. If that claim gets to 60 days past due I’m involving the patient and that’s really hard for a lot of offices…At 90 days if the account is not paid up, I’m sending my first collection letter. And then at 4 months, I’m sending them to collections.” - Dayna (17:30—19:45)

“With accounts receivable a lot of times it is putting the emotion aside because you are running a small business. Sometimes we have to take things to that level and send that patient to a collection agency. I know it’s hard, but if we did it the right way and collect on the day of service we wouldn’t get to that point anyway.” - Dayna (21:04—21:30)

“With the accounts receivable ratio, which is the total accounts receivable on the books compared to the monthly production number, I still like to see that below 1.0. So probably between 0.5-1.0 which means you have about only a month of production on the books. Over 90 days past due I want to see that less than 10%. And collection percentage, I feel like 98% is still the gold standard.” - Dayna (22:17—23:00)

“I think the number one thing that they get wrong about AR is that it’s only an admin task. That it only belongs at the front desk…Identifying that everyone can be involved in accounts receivable. You can help the profitability of your own practice just by not dismissing that patient from their crown prep appointment without collecting that $500.” - Dayna (28:27—29:00)

“Another thing I see doctors getting wrong is not understanding what their accounts receivable is. Just taking that important system, the most important piece of their practice and not looking at it. And just trusting someone on the team to manage it and not looking at the adjustments. And not looking at what their accounts receivable percentage is or their collection percentage is. And I think that’s another place where doctors put their head in the sand.” - Dayna (29:23—30:01)

“Why is accounts receivable so important? I think when the team understands that accounts receivable and getting the money in the bank effects them personally with them asking for a raise or wanting to get a bonus, start wanting new scrubs, going to a conference. Any of those extra benefits that they want from their practice, all of that comes from collections and the profitability of the practice. I think when the team understands how critical profitability is and how they personally can influence the collections in the practice I think you can get everyone on board.” - Dayna (34:08—34:54)

Snippets:

0:00 Introduction.

3:57 About accounts receivable. 

5:22 Your money is worth the most today. 

7:40 Be more proactive about the financials.

11:45 How to make AR a team sport. 

16:30 Past due balances. 

20:00 Working with a collections company. 

22:00 The standard for ratios. 

28:20 What people get wrong about AR.  

33:58 Final thoughts. 

Dayna Johnson Bio:

Dayna Johnson has helped dental offices from around the country easily transition down the path to paperless using her years of experience as a dental office manager and Certified Dentrix Trainer. As one of the Pacific Northwest’s most trusted consultants, she gives a straightforward and complete assessment for each of her clients. No two dental offices are alike, and Dayna channels her passion for going chartless to help each of her clients fulfill their goals and increase their profitability.

Dayna’s expertise has helped her earn prestigious honors such as:

• Spirit Award for Independent Certified Dentrix Trainers for her loyalty and dedication to the Henry Schein brand.
• Teaching Dentrix seminars for Henry Schein throughout the United States.
• Authors the national blog for dental office managers for Dentrix users.
• Featured speaker at the Business of Dentistry Conference in Las Vegas.

“Going chartless” is an often-used and often-misunderstood term in the dental world. Dayna’s expertise will allow practices to see benefits such as automated systems that give team members more time to spend on patient care, integrated electronic services to ensure your patients know your practice is keeping up with the latest technology, making the patient chart more accessible, and allowing the clinical team to treatment plan while the front office can be working ahead on payment plans and insurance issues, raising the level of office security to comply with new HIPAA requirements, and much more.

With 18 years of experience in the business and technical sides of dental offices, Dayna’s passion for efficient systems is grounded in personal understanding and professional expertise. Dayna knows firsthand the problems that occur when collections are down and a schedule is full of holes. She has also lived the frustration of too many hours spent hunting for misplaced patient information and mishandled recordkeeping. 

Join Dayna on Facebook https://www.facebook.com/DentalConsultantConnection/