How to Handle Old Balances in Your Dental Practice

Old balances can be a significant headache for dental practices. Left unchecked, they can snowball into major cash flow issues and impact your financial health. Whether it’s uncollected patient balances or outstanding insurance claims, tackling old balances efficiently is crucial.

In this blog, we'll share a proven strategy inspired by a real success story from a dental practice that faced a $2 million AR problem. With the right systems and consistency, they managed to regain control and boost their revenue.

The Challenge: $2 Million in Outstanding Balances

One practice reached out to us because their over 90-day accounts receivable (AR) had ballooned to $2 million. They admitted they had no handle on billing, resulting in thousands of unaddressed accounts.

This is where the Dental A Team stepped in, implementing a structured approach to resolve the issue, improve collections, and ensure this problem wouldn’t recur.

How to Handle Old Balances

Step 1: Break Down the Workload

Facing 5,000 outstanding accounts can feel overwhelming. To make it manageable:

1. Set a Realistic Goal:
   Break down the number of accounts into daily targets. For instance, with 5,000 accounts to tackle over 60 working days (3 months), this means working through about 83 accounts per person per day if you have a team of three.

2. Prioritize Accounts:
   Start with the largest balances and oldest accounts. Address the high-value claims first, as they will have the biggest impact on cash flow.

Step 2: Implement Consistent Weekly Check-Ins

Accountability is key when tackling old balances. Set up weekly meetings with the billing team to:

• Review progress on the number of accounts tackled.
• Identify roadblocks and brainstorm solutions.
• Adjust targets as needed to stay on track.

The Dental A Team ensured consistent check-ins to keep the billing team focused and accountable.

Step 3: Utilize a Billing Calendar

To streamline efforts, the practice implemented a billing calendar. This tool helps organize tasks such as:

• Insurance follow-ups
• Patient balance calls
• Statement distribution

By scheduling tasks efficiently, the practice prevented team burnout and ensured consistent follow-up.

Step 4: Engage the Whole Team

Collecting old balances isn’t just the billing team's responsibility. In this practice, everyone was involved:

• Front Office: Collected outstanding balances at check-in and check-out.
• Clinical Team: Made sure treatment plans and estimates were accurate.
• Billing Team: Followed up on high-priority accounts and handled tricky insurance issues.

Step 5: Make Payment Convenient

One major barrier to collecting old balances is the inconvenience of traditional payment methods. To combat this, the practice:

• Implemented online payment portals.
• Trained staff to collect payments at the time of service.
• Made sure patients were aware of their balances when they arrived.

Having multiple payment options made it significantly easier for patients to pay, reducing outstanding balances more quickly.

Step 6: Tackle the Remaining Debt

Once the most collectible balances were addressed, it was time to handle bad debt.

1. Send Statements:
   Sending one to three statements can result in surprising collections, even on old debt.

2. Make Personal Calls:
   A simple call reminding patients of their balance and offering convenient payment options can yield results.

3. Strategically Write Off Debts:

   • Balances under $20 were written off to simplify accounts.
   • Accounts were marked accordingly to ensure patients settled outstanding debts before receiving new treatments.

Results: A Transformed Billing System

After a year of consistent work, the practice successfully reduced the $2 million AR to manageable levels. They wrote off only about $50,000 after extensive efforts to collect what they could.

Most importantly, the practice adopted a sustainable billing system to prevent recurrence, including:

• Real-time payment collection
• Monthly AR reviews
• Team accountability and training

Key Takeaways for Your Practice

1. Consistency Wins: Weekly check-ins and structured follow-ups are crucial.
2. Break It Down: Set realistic targets and work through accounts systematically.
3. Engage Your Whole Team: Billing is a team effort—don’t leave it solely to the biller.
4. Modernize Payments: Make paying easy with online options and in-office collection.
5. Don’t Fear the Write-Off: At a certain point, focus on clearing your books and moving forward.

No matter how big your AR problem is, there’s hope. With consistent effort, strategic prioritization, and team involvement, you can tackle old balances and establish efficient systems to prevent them from piling up again.

Need help managing your practice’s finances? Dental A Team is here to support you. Schedule a call to get started!

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