What Are Dental Insurance EFTs?

Electronic funds transfer (EFT) is the online transfer of money from one bank account to another, either within a single financial institution or across multiple without the direct intervention of bank staff. EFTs are known by a number of names. They may be referred to as electronic checks or e-checks. Simply put, the money is deposited directly into the doctor’s account. There is no check that comes to the office that requires a physical deposit in the bank. The “hands-on” feel of a physical check is absent.  Many people already know what this is when their direct deposit appears the day expected right into their account. Dental insurance EFTs can be notoriously hard to keep track of amongst multiple accounts. Read on to understand the basics of how EFTs work and how reconciliation can help your practice achieve the peace of mind it deserves.

What is a dental insurance EFT?

This same principle can be applied to statement reconciliations between your bank and practice management software. The biggest benefit of dental insurance EFTs presents itself in both convenience and timeliness of insurance reimbursements, as well as preventing embezzlement risk and reconciliation in practice accounting. Keeping track of which payments are made by check and which are paid by EFT can prove to be challenging for many offices. Improper accounting of dental insurance EFTs can potentially throw off daily accounting.

Let’s learn more about what EFTs are in the dental space as well as why they are so important when it comes to your revenue cycle management.

What is required for EFT payment?

Setting up an account to accept EFTs is as simple as having a bank account that can accept electronic payments. If you are currently receiving ACH transfers, you are already set up for EFT reconciliation. As well as this, it’s important to understand the basics of what is needed in the process of accepting and sending EFT payments:

• Bank account information:
  You will need the recipient’s bank account information, including their account number, routing number, and the name of their bank
• Authorization:
  You will need to authorize the transfer of funds from your bank account. This can usually be done online or through a mobile app. Limited access accounts can provide third party payees the ability to send and receive payments on your behalf without having direct access to your funds
• Sufficient funds:
  You will need to have sufficient funds in your account to cover the amount of the transfer
• Transaction limits:
  Some banks may have transaction limits in place, so you may need to check with your bank to ensure that the amount you want to transfer does not exceed the limit
• Fees:
  EFT transactions may incur fees, so it’s important to check with your bank to find out what fees may apply for different transactions
• Security:
  To ensure the security of your EFT payment, you will need to provide authentication information such as a password, PIN, or security question

Why are EFTs in billing important?

You may wonder, “Why is it so important to balance these payments between my bank account and PMS? That money is going straight into the account so what’s the problem?” While this is true, you want to be sure you’re receiving all of the funds due to you by insurance companies. Every single payment that is entered in your PMS should be accounted for in the bank. There should not be more in one system than in the other. If you’re not balancing the payments, you don’t know if you’re applying the correct payments to your patients’ accounts.

If that’s not an option, some offices are setting up a separate payment type for these payments, such as, “Delta EFT payment.” Each office will need to decide how to set up their own system. It’s important to have these numbers separate when balancing the deposit for each day.  You may think “money is money”, but it is especially important to know the source of the funds and whether all of your dental insurance EFTs received represent the correct amount expected.

Another question that dental managers often ask is:  How does the practice know when a payment has been deposited in the bank?”  There is no easy answer to this, since insurance companies all notify you, or don’t notify you, differently. When you’re setting up the EFT payments, it is recommended that you ask insurance companies how they will let you know that they’ve made a deposit.

Taking the guesswork out of reconciling dental insurance EFTs

With the huge number of incoming payments, deposits, and need for reconciliation, your staff might end up feeling like full time accountants during tax time. The eAssist Dental Solutions accounting platform provides comprehensive EFT reconciliation for your practice, as well as a number of exclusive benefits to improve your dental revenue cycle management. Created by dentists for dentists, we understand the potential risk of unreconciled accounting. We can help with:

• Preventing embezzlement risk
  Embezzlement is a real concern for dental practices, and without accountability and financial transparency, how can you be sure your money is going to the right place? Our platform reduces this risk by adding a checks and balances system for your office, as well as an unbiased set of eyes on your most important assets
• Properly redistributing funds
  If an insurance provider incorrectly applies funds to the wrong account, our team identifies the inaccuracy and rectifies it
• Transparency in reporting and revenue
  We don’t hide your finances from you. Instead, enjoy the transparency that comes with daily and weekly report analysis, as well as an open line of communication
• Remove the burden of finances from your staff
  We all have a job to do, and yours is to take care of patients while we balance the books. Keep your patients happy and chairs full through the peace of mind eAssist can bring

Don’t waste time only to lose money through inaccuracies or insurance provider error. With dental insurance EFTs coming into you practice every day of week, it is imperative that you are staying profitable and not losing funds to financial mismanagement. Schedule a consultation with a Business Development Specialist who can help your practice achieve the financial success it rightfully deserves.