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Improve a Dental Practice’s Fiscal Health by Proactively Managing A/R Days by Richard Moore, MBA, CPA

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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 revenue- management program,
  • 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 front-desk 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, filing 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 coming in that day needs to clear a past-due balance, so everyone can make sure the patient talks with the appropriate person to collect the payment. Key financial benchmarks, such as upfront collections or case acceptance rates, are shared with team members to recognize their efforts and encourage input on other ways to improve.

In addition to creating an awareness of revenue-cycle responsibilities, Blair has also developed guidelines to ensure the capture of complete, accurate information when the patient makes an appointment. This provides a clear, easy-to-follow checklist to streamline the data-gathering process and help team members perform their jobs better.

Another key aspect in education is to ensure that when a treatment plan is presented, the roles of the dentist, hygienist and dental assistant are clearly defined to ensure they lay the groundwork for conversations with financial counselors. By making sure their patients understand the benefits and necessity of a recommended clinical plan, clinical employees improve the likelihood that patients are ready to make a decision after hearing about financial responsibilities and options.

Inspire Dental Group's policy to personally walk patients from one area to the next during their visit improves everyone's efforts to secure information or collect patient payments, because each step in the process is covered, says Blair.

Upfront collections positively impact A/R days
The most effective way to minimize A/R days is to ensure upfront collection of all monies owed by the patient, suggests Donna White, owner and principal consultant of Legacy Consulting Services.

Ideally, a practice should collect insurance and demographic information at the time the appointment is made, so that eligibility and benefits can be verified before the patient arrives. Another best practice is to call the patient two to three days before the appointment to discuss his or her financial responsibility for the visit, says White. This strategy gives practice employees an opportunity to discuss financial policies, as well as uncover additional insurance coverage and updates or corrections to existing information.

Practices successful with upfront collections establish a policy requiring payment at the time of service—at check-in, not checkout. By establishing the policy, informing patients of the process and consistently following the protocol, collection of patient financial responsibility becomes a normal part of the workflow for patients and team members.

One way to ensure successful collection at the time of service is to offer payment options, recommends White. Options can include installment plans, Care Credit, or of course, acceptance of credit card payments so patients can manage their personal cash flow more easily.

However, even when a practice has clear guidelines for collection of payment upfront, some team members may not be comfortable with financial conversations. A practice leader can prepare front-desk employees for financial conversations with scripts and training that includes role-play, says White. It's also important to recognize that even with support, some employees may not handle these discussions well, making it essential to designate specific team members to handle financial conversations, if necessary.

But developing policies and guidelines for upfront collections is just the beginning of a robust process, Blair reveals. Inspire has a quality-assurance process in which the administrative team reviews upcoming appointments to double-check that:
  • Each patient's file is ready and eligibility and benefits are verified,
  • Patients were informed of financial responsibility,
  • No balance is owed for previous visits,
  • All treatment plans and consent forms are signed and scanned into patient's records to accompany claims.
Taking time to check for incomplete information provides an opportunity to address missing items before the patient arrives.

Proactive collection of data minimizes claim denials
Another key strategy to reduce A/R days is to lower the number of denied or delayed claims. Because 50–70 percent of claim denials are due to inaccurate or incomplete data, dental practices can reduce denials by implementing several key best-practices. The following strategies helped Blair's practice reduce claims rejections to 1.04 percent of total claims submitted.
  • Verify eligibility for benefits before the patient arrives in the office for treatment, arming team members with up-to-date information on deductibles, co-payments and patient responsibility. This means patients know what they will need to pay, and the dental practice knows what will be approved by insurance.
  • Set up claim forms by completing clinical notes and attaching X-rays or other documentation, then putting the claim into a "hold status" for the billing department to review. At Inspire, this ensures that clinical team members create claims that meet requirements for payment, and clinical employees are educated about the need for complete notes, identification of correct X-rays to attach, and correct codes.
  • Ensure that billing team members review each claim before submission, to verify that it meets payer-specific submission rules. If additional information is needed for a payer, the claim is returned to the clinical department.
  • Track reports for rejections by reason and by dentist to routinely review and identify opportunities for improvement. Identifying denial trends makes it possible to counsel employees on a one-to-one basis if the issue is limited to a single employee, or to create practice-wide education to address issues that are more global.
  • Have a protocol in place to ensure that patients receive a personal call when a denial is not appealable. Even though Inspire's process is designed to minimize denials, it's always best to be prepared, Blair says. Knowing how and when patients should be contacted and how the information should be communicated can guide team members' conversations when they inform a patient that he or she is responsible for a certain amount.
Technology and processes support practice efforts
In addition to establishing policies and training programs that maximize upfront collections and reduce claims denials, it is essential to provide the right tools to support team members in their efforts. Anytime a dental team is committed to providing its patients with quality care, interruptions to the usual detailed administrative tasks—such as claims completions, insurance verification or confirmation of demographic information—will happen. The right tools can help employees handle interruptions without missing critical steps in payment or claims activities.

It is also important to monitor and analyze payment and collection trends to proactively address potential problems. These tools include technology that:
  • Prompts upfront collection of complete insurance and demographic data with intelligent software that automatically alerts team members to missing information and prevents submission of an incomplete claim,
  • Produces reports identifying reasons for denied claims, account status by days open or payer, and production by payer or provider,
  • Integrates with other systems used by the practice to reduce data-input errors,
  • Provides a user interface dashboard to give dentists and practice managers a quick look at the financial picture of the practice.
Non-technology-related steps—including clearly delineating team-member responsibilities for securing patient information; oversight of claims reviews before submission; and quality-assurance reviews throughout workflow—can also ensure a reduction in A/R days. By assigning responsibility for the activities in the team member's job description and reinforcing it as a priority for the employee in performance evaluations, the practice manager ensures that all activities are taken care of on a daily basis.

Practice management should also use denial reports, collections updates and other financial reports to identify process- improvement opportunities. When identifying areas of opportunity and what solutions to implement, include team members in the process; they are using the technology to support their day-to-day responsibilities. Actively including team members also increases their "ownership" of the revenue cycle process.

Holistic approach creates positive work environment
Developing a proactive, holistic approach to collecting patient payments at the time of service and ensuring claims are complete and accurate before submission is not a once-and-done proposition. Policies and workflow processes must be redesigned to reflect a new focus on reducing A/R days, and communication among team members must be open. When management of the revenue-cycle process is part of the everyday work environment for all team members, a greater percentage of patient payments are collected upfront and fewer claims are denied.

Along with creating the right policies and providing tools to support a new focus on reducing A/R days, practice managers can include additional benefits for team members, suggests Blair. At Inspire, the team members celebrate achievements related to business goals, and employees nominate each other for recognition of outstanding performance, she explains. This combination of proven strategic business practices and recognition of each team member's importance has created a successful group practice built on a team culture that benefits patients, team members and the practice's bottom line.



Richard Moore is president of OneMind Health(@OneMindHealth). With more than 26 years of health-care experience, Moore has worked to hone clinical and financial transaction processes for government and commercial health-care insurers, hospitals, physicians and dentists. Moore holds an MBA and an undergraduate degree from Old Dominion University, has attended graduate programs at VCU and University of Richmond, and received his CPA designation in Virginia. To contact Moore, email rmoore@onemind.com.




Dentaltown Magazine
September 2025
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