Hiring a dental insurance billing company should be fairly straightforward. Your practice performs dentistry, claims are submitted to the patient's insurance company, the insurance company processes those claims, and your practice gets paid the money it is legitimately owed. Obviously, there are quite a few steps involved in making that happen, but the final result isn't particularly complicated. You performed the dentistry. You need to collect the money.
The problem is that somewhere along the way, dental billing became defined by the individual tasks involved instead of the result those tasks are supposed to produce. Ask what a dental billing company does and you will usually hear some version of: we submit claims, follow up with insurance companies, work denials, post payments and work the aging report. Those are all perfectly legitimate functions, but none of them, by themselves, are a finished product. A claim can be submitted and never paid. Someone can follow up on that claim repeatedly without ever resolving it. A payment can be received and posted incorrectly. An aging report can be "worked" every week while the amount of old money sitting on it continues to grow.
When I train a financial coordinator, I define the product of the position as all money collected for services rendered by the practice. That definition matters because it gives the financial coordinator something much more useful than a list of duties. They certainly have duties, and quite a few of them, but there is a reason they are doing them. Their job is to ensure the practice collects the money it has earned and that the financial information on the patient accounts is accurate. A dental billing company should be looked at much the same way.
Dental insurance billing starts before the claim is filed
One of the easiest mistakes to make is to think dental insurance billing begins when someone submits a claim. By that point, quite a bit has already happened that can determine whether the financial side of the case goes smoothly or becomes a mess.
Before treatment, the practice should have the patient's insurance information and enough accurate benefit information to make a reasonable estimate of what the insurance company is expected to pay and what the patient will be expected to pay. That can include the deductible, annual maximum, percentage of coverage, frequency limitations, waiting periods, downgrades and other provisions that affect the patient's benefits. The practice also needs the correct subscriber and patient information because inaccurate information at the beginning doesn't somehow improve when it reaches the insurance company.
Another distinction that matters here is that the amount given to the patient is an estimate. The practice can verify the benefits and do the math correctly, but it does not control the insurance company's final payment decision. That doesn't mean the practice throws up its hands and tells the patient, "Who knows? Insurance is crazy." It means the practice is responsible for gathering the best information available, calculating the estimate correctly and making sure the patient understands what is being estimated.
This matters to dental billing because errors made before treatment tend to show up later as billing problems. If the patient's benefits were misunderstood, the patient portion may have been calculated incorrectly. If important insurance information was missing, the claim may not process as expected. If a plan limitation wasn't identified, the payment may be different from the estimate. Now the practice isn't simply dealing with an insurance claim. It may also be dealing with a patient who was told to expect one thing and is suddenly being asked to pay another.
That is considerably harder to fix after the dentistry has been done.
Filing a dental insurance claim is the beginning of the job
Claims obviously have to be submitted, and they need to be submitted correctly. A claim may require supporting information such as X-rays, periodontal charting, narratives or other documentation. The correct information and necessary documentation need to go with the claim so the insurance company has what it needs to process it.
A dental billing service that files claims is therefore performing an important function. The problem comes when claim submission is treated as though it completes the responsibility.
Imagine that 100 claims are submitted and several of them reject or cannot be processed because something is missing or incorrect. Technically, someone can still report that 100 claims were filed. That statistic might even look quite impressive on a report. It doesn't change the fact that several pieces of dentistry are still sitting there unpaid.
The financial coordinator's responsibility doesn't end with transmitting the claim. They have to know what happened to it. If information is missing, somebody needs to obtain it. If something was entered incorrectly, it needs to be corrected. If documentation is needed, it needs to be provided. The point is not to keep proving that the original claim was sent. The point is to get the claim into a condition where it can be properly processed.
That is one of the questions I would ask when evaluating dental insurance billing services. Don't just ask whether the company files claims. Ask what happens to the claims that don't go smoothly. The easy claims are not generally where you discover whether you have a good system.
Dental insurance follow-up should move the claim toward resolution
Insurance follow-up is another phrase that can mean almost anything.
Someone can look at a claim on a payer portal, see that it is still pending, put a note in the account and call that follow-up. There may be times when that is all that can reasonably be done at that moment, but repeatedly checking the status of something isn't the same as resolving it.
A financial coordinator should routinely review outstanding insurance claims and identify the ones that need action. The older a claim becomes, the more attention it deserves. The purpose of reviewing the insurance aging isn't simply to observe that the money is still missing. It is to determine what needs to happen next.
The claim may require additional information. There may be a problem with coordination of benefits. The insurance company may have denied it. The claim may have been submitted incorrectly by the practice. The payer may have processed something incorrectly. Whatever the problem is, someone has to identify it and take the appropriate action.
This is also where the responsibility viewpoint becomes useful because it prevents the office from automatically blaming the insurance company for everything that goes wrong. Insurance companies certainly create their share of problems, but sometimes the practice made the mistake. If we submitted something incorrectly, the productive thing to do is fix it. Being offended that the insurance company didn't somehow know what we meant isn't going to get the practice paid.
The reverse is also true. If the claim was submitted correctly and the payer needs to take action, the claim should continue to be followed until there is a legitimate resolution. Responsibility doesn't mean accepting every insurance decision without question. It means knowing what happened and doing whatever the next appropriate step is.
Denials and rejections need to be handled, not just recorded
A rejected claim and a denied claim are not the same problem, and treating them as though they are can waste an enormous amount of time.
If a claim has been rejected because something in the submission needs to be corrected, then the correction needs to be made and the claim needs to be resubmitted properly. If a claim has been processed and denied, the reason for the denial needs to be understood. Depending on that reason, the next step may be correcting information, supplying additional documentation or appealing the decision.
What doesn't make much sense is repeatedly resubmitting exactly the same information without addressing the reason the claim didn't pay. Yet this happens. The claim gets sent again, another note gets added to the account, and everyone feels as though something has been done. Something has been done. It just may not be anything that will result in payment.
This is why I care about the difference between activity and responsibility. Activity asks whether someone touched the account. Responsibility asks whether the problem preventing payment was identified and handled.
If you're outsourcing dental billing, you should know how the company approaches these accounts. When a denial occurs, who reads it? Who determines the reason? Who decides what needs to happen next? If the company needs something from your office, how is that communicated and how does someone make sure it is actually provided? These are the boring details that determine whether the claim gets resolved or quietly grows old on the aging report.
Payment posting is part of the financial control of the practice
Eventually the insurance company pays, and then the payment has to be posted correctly.
Payment posting sounds like one of the least exciting jobs in dentistry, which is probably because it is. Unfortunately, boring doesn't mean unimportant. If insurance payments and adjustments aren't posted correctly, the patient's account isn't correct. Once the account is wrong, every financial action taken from that account can also be wrong.
The payment needs to be posted according to the EOB. Applicable contractual adjustments need to be entered correctly. Any remaining patient responsibility needs to be accurate. If those things aren't done correctly, the practice can end up trying to collect money the patient doesn't owe, failing to collect money the patient does owe or carrying credit balances that don't accurately reflect what is happening on the account.
That isn't merely an accounting nuisance. Patients notice when you send them a bill for money they don't owe. They notice even more when they have to call your office and explain their own account to your staff.
Accurate accounts matter for exactly this reason. The financial coordinator is responsible not only for collecting money but also for making sure the financial information is correct. A dental billing company handling payment posting becomes part of that responsibility.
Your dental A/R tells you whether the system is working
One of the reasons I like statistics is that they are considerably less interested in excuses than people are.
You can have an insurance department that is incredibly busy. Everyone can be working hard, making calls, sending claims, answering messages and adding notes to accounts. That still doesn't tell you whether the financial system is producing the result it is supposed to produce.
Accounts receivable gives you a much better place to start.
A good goal is to keep total A/R at no more than approximately one month's average production, with three-quarters of a month's production or less being preferable. A monthly collection expectation of approximately 98 percent after applicable write-offs is also a good target. Those statistics give the practice a way to measure whether the money produced is actually being collected.
Insurance A/R and patient A/R should also be looked at separately because they require different actions. If an insurance balance is outstanding, someone may need to follow a claim, correct information, provide documentation or handle a denial. If the insurance portion has been resolved and the patient owes the remaining balance, the practice now has a patient-collection issue. Mixing everything together into one large A/R number makes it harder to see what actually needs to be done.
The age of the balances matters as well. A claim in the first 30 days is not the same problem as a claim that has been sitting unpaid for more than 90 days. Older accounts need attention, and the financial coordinator should be reviewing aging regularly rather than waiting until the practice suddenly needs cash.
Money doesn't become easier to collect because everyone ignored it for three months. I wish it did. That would make financial coordination a remarkably relaxing job.
Outsourcing dental billing does not mean you stop watching your money
There is an interesting tendency in business to believe that outsourcing something makes the owner no longer responsible for knowing whether it is working. It doesn't. If you hire an accountant, you still care whether your books are correct. If you hire someone to manage payroll, you still expect your employees to be paid. And if you hire a dental billing company, the fact that another company is performing the work doesn't make your accounts receivable belong to them. It is still your money.
The point of outsourcing is to have qualified people perform the work so you and your staff don't have to perform every function internally. It is not to become completely disconnected from the financial condition of the practice. That subject deserves its own discussion, and it gets one here.
A practice owner should still know the basic financial statistics. How much was produced? How much was collected? What is the total A/R? How much of it is insurance A/R? How old is it? Are collections keeping pace with production?
You do not need to personally spend your afternoon calling insurance companies to obtain those answers. In fact, if you hired a billing company and you're still doing that, we have probably missed the point somewhere. But you should be able to look at the results and determine whether the system is functioning.
What a dental billing company should be responsible for
Different dental billing companies offer different scopes of service, so I don't think every company has to perform every financial function in the practice. One company may handle claims and insurance follow-up while the practice retains payment posting. Another may handle posting as well. Insurance verification may be included or may be a separate service. The exact division of labor can vary.
What cannot vary is clarity about responsibility.
If the billing company assumes the practice is handling a problem and the practice assumes the billing company is handling it, nobody is handling it. That is how claims quietly move from 30 days to 60 days to 90 days while everyone involved remains under the impression that somebody else is taking care of them.
A good arrangement clearly establishes who is responsible for each part of the process and what happens when something requires action from the other party. If the billing company needs an X-ray or additional information from the practice, there should be a way to communicate that. If the practice needs to make a decision, somebody needs to know that the decision is pending. If a claim remains unpaid, it should continue to have a next action until it is resolved.
This doesn't require a complicated philosophy. It requires somebody to be responsible for seeing the problem through.
The difference between performing tasks and producing a result
Suppose you hired someone to mow your lawn and, at the end of the month, they proudly told you they had started the lawn mower 37 times. That is certainly evidence of activity. You might still want to look outside.
Dental billing should be judged the same way.
The number of claims submitted, calls made, accounts touched and notes entered can be useful information. Those actions are part of doing the job. They are simply not the final measure of whether the job is being done successfully.
The practice performed the dentistry. The appropriate financial arrangements were made. The claim was filed correctly. Problems with the claim were identified and handled. The insurance payment was received and posted correctly. The remaining legitimate patient responsibility was identified and collected. The patient's account accurately reflects what occurred.
That is a completed financial cycle.
How to evaluate dental insurance billing services
If I were evaluating a dental billing company, I would spend less time being impressed by a long list of services and more time finding out what happens when something doesn't work.
Claims that are filed correctly and paid without a problem are wonderful, but they don't tell you much about the quality of the follow-up system. Find out what happens to a rejected claim. Find out what happens when a payer asks for additional documentation. Find out how denials are handled and how old insurance balances are identified. Find out how frequently the aging is reviewed and how problems requiring action from your practice are communicated.
I would also want to know what information the practice receives about the results. If your dental billing is outsourced, you should still be able to determine whether collections are where they should be and whether A/R is under control. You shouldn't need blind faith and a cheerful monthly email telling you everybody worked very hard.
Most importantly, make sure you understand exactly where the company's responsibility begins and ends. If a service only submits claims, that's fine as long as everyone understands that claim follow-up belongs to somebody else. If the company handles claims through resolution, make sure you understand what that means in practice. The danger isn't necessarily a limited scope of service. The danger is a responsibility that nobody realizes has been left uncovered.
The point of dental insurance billing is to get the practice paid
Dental insurance billing is not glamorous work. It involves details, repetition, follow-up, accurate documentation, correct posting and a willingness to keep looking at a problem until you understand what is preventing it from being resolved. None of that makes for a particularly exciting cocktail-party conversation, but it has a very direct effect on whether the practice collects the money it has earned.
Every unpaid claim represents dentistry that has already been performed. The practice has already paid the staff who helped deliver it. It has already used the supplies, occupied the chair and incurred the expenses involved in treating that patient. Allowing the money to sit indefinitely because somebody technically completed their assigned task doesn't make much sense.
That is why I come back to responsibility when I look at dental insurance billing services. I don't particularly care whether someone can prove that a claim was submitted if nobody noticed that it never got paid. I don't care how many times an account was "worked" if the actual problem was never identified. And I certainly don't want a patient being chased for an incorrect balance because nobody bothered to make sure the account was accurate.
A dental billing company should be very clear about the functions it performs, and the practice should be equally clear about the functions it retains. Between the two of them, every part of the financial cycle needs an owner. Once that is established, the individual tasks have a purpose rather than becoming a collection of activities everyone can point to while wondering where the money went.
You performed the dentistry. Getting paid for it should not be the mysterious part.
A lot of what you produce doesn't become money until an insurance company says so. That's not a part of your practice to leave to whoever has a spare minute. Book a consult.
