What Variables Affect my Office Collection Percentage?

What variables affect my dental office collection percentage?

At the end of the month, do you find yourself questioning “Why am I pocketing such a small amount?” or “I know we had a great month, where is the money going?” There are so many variables that affect why you may not be collecting as much as you think you should be. Today we will be going over how variables such as copays, contracted rates, adjustments, and insurance write-offs go into your collection percentage, and ultimately affecting your total take-home collections. 

What is the Collection Percentage and how do you calculate it? 

Before we dive in, let’s break down what the collection percentage is and what goes into that calculation. Your office’s collection percentage is calculated by dividing total collections by net  production. Net production includes adjustments and insurance write offs. 

 Collection Percentage = Total Collections/Net Production

To provide an example, if your total collections came to $100k and your net production was $110k, then your collection percentage would be 90.9%. 

100,000110,000 = 90.9%

As always, it is the office’s goal to try and collect at least as much as you produce. The desired range you would want your collection percentage to fall in between would be 90% to 98% (98% being the goal).

In the example above, you can see that the total collections pretty much aligns with your net production, but there is $10k in question that you might possibly have the chance to collect on a portion of that. 

The Collection Percentage allows your office to see what your profit margin looks like. It also can reveal any areas where your office can be improved. At the end of the day there is only so much you can do to collect everything you would like to. But, there are so many opportunities to make sure you are collecting absolutely everything that you can. Keep reading on to see how you can make sure you are collecting 100% of what is rightfully yours. 

What variables affect collection percentage?

1. Insurance write-offs 

This is a variable that weighs heavily on your office’s collection percentage. An insurance write-off is work that you performed on a patient that you won’t collect money for. If a patient is in-network with your practice, the insurance company dictates how much your office can bill for each treatment and procedure.

For example, you may charge $1,000 for a root canal at your office, but Jane Doe’s insurance only allows you to charge Jane the contracted rate of $800 for that procedure. Leaving you to write off that difference of $200. Unfortunately, the insurance company dictates the rates affecting the collection percentage. But this is a perk for the patient to receive a discount for being in-network. 

2. Adjustments

 Adjustments are a smaller bit that goes into the Collection Percentage. Even still, small adjustments little by little can make a huge difference. Adjustments include your “no-show no-call” fee or “same day cancellation” fee. Basically anything extraneous that would be charged to the patient outside of their various treatments.

This could also reflect discounts such as a 55 and older discount, a new patient discount, or any membership style discounts (should your office participate in either of these). Nonetheless, these adjustments can add up. 

3. Copays

One of the more simple variables that can significantly affect your office’s collection percentage is the collection of copays from the patient at the time of their visit. If your office does not collect co-pays from patients, that can impact your collection percentage more than you think.

A big bulk of what can be collected, comes from the patient themself. Collecting a copay from the patient at the time of their procedure or treatment allows you to capture a significant chunk that greatly and positively impacts your collection percentage. 

For example, you could have $120,000 in total collection but only pocket $90,000. That is a significant amount to be losing. But this happens to many offices. This gap between 120,000 and 90,000 isn’t made up on missing copays alone. There are other variables that go into it.

How do I get copays from my patients?

However, collecting a copay is just one more way you can boost your collections. Check out a helpful tip list below for easy ways to collect copays from your patients: 

1. To avoid any upset patients and keep a positive relationship with them, communication is key.
2. Communicate ahead of time when your patients make their appointments that there will be a co-pay or service fee.
3. Your dental office is responsible for setting the fee per procedure. Mostly it is a calculation based on the cost of the services of that visit. If the patient is only there for a routine cleaning and oral exam, a small co-pay may suffice. Some offices don’t collect co-pays for the routine cleaning and exam.
4. However, for the more costly procedures and treatments such as dental implants or veneers, a co-pay is essential to making sure your office is collecting everything possible from the patient up front. 
5. Have someone, such as your front desk staff, in the office looking over the schedule for the next day and calculate the copays. That way when the patients come in the next day for their treatments or procedures, you will have the co-pay already calculated and  ready to be charged to the patient.
6. Or you can have a chart breaking down procedures and what the co-pay would be for each procedure so your front desk staff can quickly and easily locate how much and charge the patient accordingly. 

How to collect 100% of what is rightfully owed to your office

While eAssist cannot be physically in the office with you to help collect your copays each day (although we wish we could be!), the Success Consultants on our platform offer top of the line support to help you collect every last penny that can possibly be collected. These Success Consultants are experts in the field and stay up to date on insurance policy updates including contracted rates. They are there to make sure all remaining balances are then collected from the individual patients. Thus providing your office with 100% of what is rightfully owed to you. Leaving you with the peace of mind that your collection percentage is in good hands. Schedule a  chat with our team below to learn more about how eAssist can help you identify any pain points and boost your collections!