8 Key Steps to Maximize Your Collection Rate
Throughout the years, I have found joy in keeping up with the accounts receivable. There is something so satisfying about seeing your A/R cleaned up and your collection rate high. To accomplish this, I feel it starts on the front end.
Some questions to ask yourself: Are you aware of your current collection rate percentage? Do you fall into the national average collection percentage of 91%?
If so, let’s improve your collections because no one wants to be average. Your dental practice should aim for a 98% or better collection rate. Many factors may impact your ability to collect your fees, including inaccurate estimates, poor communication, and staff training. Regardless of the reason, the impact of not collecting can be severe on the health of your practice.
Fortunately, there are steps you can take to improve your collection performance and become a successful dental practice. I will review some key steps I have found that will maximize your collection rate.
But first, what is a collection percentage? A collection percentage is simply the amount of money collected compared to the amount you are owed for completed services.
Here are the steps to maximize your collection rate:
1. Utilize your Practice Management Software
Your Practice Management Software has the ability to work for you. Take the time to set this up accurately and utilize it to its full potential. Set up your coverage books and keep updating as needed. If you are in-network with insurance, set up your software to work from each fee schedule. This will help you get a closer estimate for your patients.
2. Create and Communicate a Financial Policy
Just like your patients have certain expectations of us, we also have expectations of them, including paying for their services. But you may not have an ideal outcome unless they know these expectations up front and clearly. It is crucial to have a financial policy in place.
This policy should include:
- Insurance:
- Inform your patients that their insurance contract is between them and their insurance company. We are not a party to that contract. Some or all of the services provided may or may not be covered by their insurance policy. Any balance is their responsibility, whether or not the insurance company pays any portion.
- Payment Options:
- Clearly communicate when you expect payment and what acceptable payment options are.
- Payment is due at the time of service, whether this is the full payment or the ESTIMATED patient payment, unless other arrangements are made.
- Financing Options:
- Offer third-party financing or in-office payment plans.
- Past-due payment policies
- Communicate if there is a monthly interest fee for unpaid balances.
Once you have this, you will want to have your clients read and sign prior to any treatment to avoid confusion in the future.
3. Verify Insurance
Before each visit, verify your patient’s insurance benefits. This will confirm if they have active insurance and clarify benefit coverage. Being proactive can help with more accurate estimates for the patient, as well as minimizing the risk of uncollected fees.
You may go a step further and do a pre-determination before visits to get an accurate patient portion. We have found this to be a great thing to implement in our practice to get the most accurate cost, and patients appreciate this as it minimizes the surprise statements.
4. Know Your Schedule
Like the Providers in our practice, the administrative team chart audits each patient’s account ledger daily. Look ahead at each ledger and see if they have the following:
- Outstanding Balance: If so, this is the best time to collect and clear up their account.
- Credit on Account: Inform the patient if there is a credit on the account. Many patients will ask to keep it on the account. (If this is the case, document the conversation you had.)
- Pending insurance claims: If you see an outstanding insurance claim, this is a great time to catch it and look into it before adding it to the account.
5. Treatment Planning
In our practice, we have found that it is crucial to go over all treatment planning with patients, whether it is their first visit, a large restorative case, or a simple sealant. Once you have reviewed the treatment and go over their estimated portion, you will want them to sign this and save it into your Practice Management Software.
While you are going over the patient portion, communicate your expectations for payment time of service or set up a payment arrangement. Do not schedule the treatment until you have discussed this and confirmed with the patient. The last thing we want is for the patient to be surprised with a balance they are unsure how they will pay for.
6. Collect the Patient’s Estimated Expense
Train your team to ensure all patients check out with the admin team. This is where it can slip between the cracks and collections walking out the door. You spent the time to go over the financial policy, treatment plan, and payment details. Now is the time to feel confident and comfortable collecting because you have already set the expectations.
7. Sending and Collecting Insurance Payments
When sending insurance claims, you will want to ensure you are sending clean claims on the front end. This means that when you send the claim, you attach the required information, radiographs, photos, and narratives. Know what the insurance companies are looking for, and ask your Providers to help make sure all the necessary information is provided.
If there is a patient balance after an insurance payment comes through, I recommend sending a statement the same day. Having options for patients to pay is very beneficial. Patients appreciate payment options such as a mailed statement, sending text-to-pay, a payment link on your website, or a QR code.
8. Accounts Receivable Follow-Up
Establish a system to follow up on outstanding balances and stay consistent. Find what works for your office, whether it is overdue phone calls or letters. A system for this is crucial as it can easily get out of control quickly.
I find that if the systems are followed, you will rarely get to the 90-day point and have to deal with sending patients to collections.
Consistency is the Key to Stronger Collections
As you can see, improving your collection rate requires much more than just collecting money. Moving forward, I hope you can take away some of these steps, such as utilizing your PMS, creating a financial policy, and verifying insurance, to help you improve your collection rate.
After 19 years in the dental field, I have gone through many trials and errors to find what is successful in our office. Not one way works for every practice, but consistency and follow-through will help you reach your 98% collection goal.
About the Author
Nikki Babcock, CDA, CDBP, DAADOM
Nikki has served in the dental field since 2006, when she started as a Dental Assistant out of high school. She is the Practice Manager at Rockford Downtown Dental, Dr. Chad Conlin, FAGD.
Nikki is a lifetime AADOM member. She received her AADOM Fellowship designation in 2023, her MAADOM in 2024, and her DAADOM in 2025.
Outside of the office, Nikki enjoys spending time with her husband and two kids.
