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Net Collection Rate (NCR), once hailed as a beacon in Accounts Receivable (AR) management, now feels like a relic of the past. In the realm of Accounts Receivable (AR), relying solely on NCR—which measures the percentage of billed amounts collected—is like bringing a spoon to a knife fight. While it provides some insights, it falls short of capturing the full picture.

NCR shows the percentage of AR collected compared to what was billed, but it doesn’t tell you everything. How much of your AR is outstanding? How fast is your team collecting payments? What percentage of your expected amounts are being collected from the payor? Are you adjusting write-offs? These questions demand answers beyond the superficiality of NCR.

Forget the one-dimensional approach; let’s dive into the AR trifecta: the amount, the speed, and the quality of collections. It’s not just about the percentage of your production being collected; it’s about the cold, hard cash still hanging in the wind. Because let’s be real, too much open AR can spoil the pot faster than you can say “write-off.”

Amount of open AR: This dimension focuses on the total outstanding balances owed to the DSO or practice. While metrics like NCR give an idea of the percentage of AR collected compared to the amount billed, they don’t provide insight into the absolute value of AR outstanding. High amounts of AR can lead to cash flow issues and potential write-offs. Managing this dimension involves strategies to reduce the overall outstanding balances and ensure timely payment from patients and insurance companies. The AR Ratio (AR Ratio = AR / Net Production) provides a clearer picture of how efficiently the practice is managing its accounts receivable relative to its production.Ex. The impact of having $200K in open accounts receivable (AR) is significantly different for a practice with $1 million in revenue compared to a practice with $2 million in revenue.

Speed of Collection: Time is of the essence when it comes to AR. The longer outstanding balances remain uncollected, the greater the risk of non-payment. Days Sales Outstanding measures the average number of days it takes to collect payment after providing services. However, it doesn’t fully capture the efficiency or timeliness of the collection process. Efficient management of this dimension involves implementing practices to expedite the collection of payments, such as streamlining billing processes and following up on overdue accounts promptly.

Quality of Collection: Beyond merely collecting payments, the quality of collections is crucial. Claim yield is a metric used to measure the percentage of claims successfully reimbursed, indicating how efficiently the practice is managing its billing and collection efforts. A high claim yield suggests that the practice has effective billing practices in place, minimizing revenue leakage due to denials or underpayments. Managing this dimension involves optimizing billing processes, reducing claim denials, and maximizing reimbursement rates from insurance companies.

While each dimension provides useful insights alone, it’s crucial to understand how they work together to improve AR management.

Finding a Better Way with InsideDesk

InsideDesk is like the perfect recipe for DSOs and dental practices struggling with managing their AR. It goes beyond just looking at NCR and helps us understand the whole picture. With InsideDesk, a DSO or practice can monitor their open AR, track their payments, and ensure they are receiving the correct amounts.It’s like having a trusty sidekick that helps us stay on top of your finances.

In conclusion, while NCR serves as a basic benchmark for AR performance, it falls short in capturing the complexities of dental AR management. By considering the three-dimensional nature of AR — amounts, speed, and quality of collection — practices can gain deeper insights and drive sustainable financial growth.

When it comes to dental claims, not all are created equal. Understanding the nuances of filing claims and the ability to close claims in a timely and efficient manner can make a significant difference in maximizing their value. But how much is your claim really worth?

What is Dental Claim Yield and Are You Measuring It?

To understand the true value of your dental claims, it’s essential to grasp the concept of claim yield. Claim yield refers to the ratio of the total amount collected from insurance payors to the total amount expected. Essentially, it measures how successful you are in converting production into collected revenue.

What Affects Claim Yield?

Several factors can influence claim yield. Aging Accounts Receivable (A/R) is one factor. As claims sit unpaid for longer periods, they become less likely to be reimbursed fully, if at all. Also, as unpaid claims age and time passes, it’s much easier for those unpaid claims to fall off our radar. Additionally, incorrect coding, wrong codes, missing attachments, and bad submissions can all contribute to a decrease in claim yield by leading to claim denials or underpayments. Delays in filing can complicate matters further, making it harder and more time-consuming to gather necessary information such as updated patient insurance details or clinical narratives. Thus, timely filing is crucial for optimizing claim yield and ensuring efficient revenue cycle management.

How Much is it Costing You?

“You can’t manage what you can’t measure.” This adage holds true when it comes to understanding the financial impact of your dental claims. InsideDesk offers a solution by delving into your system, pulling your fee schedules, and matching them with the reimbursements received from payors. By doing so, InsideDesk helps you understand your claim yield accurately.

To see the real costs of claim yield over time let’s take a look at the graph below. The difference between a claim being closed in less than 30 days from date of service vs a claim being closed in 180+ days is 28% reduction to the reimbursement. This is the importance of instituting an efficient process for quickly addressing and resolving claims, thereby maximizing financial returns.

*Claim yield refers to the ratio of the total amount collected from insurance payors to the total amount expected.

One solution to recoup lost claim yield is transferring unpaid insurance balances to the patient. But put yourself in the patient’s shoes, imagine receiving a statement six months after visiting the dentist. You’d likely question the delay and validity. The longer it takes to present a remaining balance post-visit, the lower the likelihood of payment.

In conclusion, there are a number of KPIs that are used today to measure the health of your dental group. Optimizing your processes to maximize your claim yield is one of the most important factors in ensuring growth and sustainability. By understanding claim yield, identifying factors affecting claim yield, and measuring its impact accurately, you can take proactive steps to enhance your DSO’s financial health.

In recent years, an increasing number of general dentists have integrated orthodontic treatments into their practices, driven by advancements in technology and patient demand. While this shift offers benefits, it also poses challenges in managing orthodontic dental claims efficiently.

Orthodontic treatments traditionally fell under the scope of specialized orthodontists. However, with more general dentists offering orthodontic services, there has been a growing need for efficient management of orthodontic dental claims. This is where InsideDesk’s Orthodontic workflows come into play, offering a comprehensive solution to streamline the entire orthodontic claim life cycle.

Managing orthodontic claims is critical due to the complexity of billing and reimbursement. Unlike routine procedures, orthodontic treatments involve extended durations, multiple phases, and specialized appliances, making navigating codes, insurance policies, and documentation challenging without structured workflows.

Additionally, detailed documentation and communication are vital for orthodontic treatments. Any discrepancies or delays in processing claims can lead to payment delays, billing errors, patient dissatisfaction, and financial losses for the practice. InsideDesk’s Orthodontic workflows minimize such risks, ensuring accurate and timely claim reimbursement while maintaining patient trust.

InsideDesk’s Orthodontic workflows offer automation and advanced technology to simplify orthodontic claim management This enhances accuracy, expedites claim processing, and improves the overall patient experience. With InsideDesk, DSOs and dental practices can optimize efficiency and focus on what matters most, patient care, ultimately driving practice success and patient satisfaction.

As we step into 2024, DSOs are faced with a landscape marked by great uncertainty. The effects of the Great Resignation and Great Recession are still felt, making this coming year both challenging and full of potential. Despite this, one thing is clear: DSOs need a solid strategy for steady growth.

The Great Resignation and Economic Uncertainty

In the last few years we witnessed a seismic shift in the job market, as employees across various sectors sought new opportunities, leading to what has been coined the “Great Resignation.” The dental industry, too, felt the impact, with staff turnover rates reaching unprecedented levels. This trend is likely to persist into 2024, posing a significant challenge for DSOs in terms of talent acquisition and retention.

Moreover, the lingering effects of the Great Recession continue to cast a shadow over the economy. Inflationary pressures, supply chain disruptions, and fluctuating consumer confidence levels are just a few of the variables that will shape the business landscape in the coming year. DSOs must remain adaptive to these economic shifts to ensure sustained profitability and success.

Continued Emphasis on Same Store Growth

While uncertainty may be the prevailing theme, one constant for DSOs is the continued emphasis on same store growth. This involves optimizing the performance of existing dental practices, rather than solely relying on expansion through acquisitions. In an environment where resource allocation is critical, InsideDesk can provide invaluable insights to fine-tune operational efficiency and enhance revenue streams within existing practices.

In times of uncertainty, having a reliable partner can make all the difference. With a proven track record of delivering insights and strategies tailored to dental revenue cycle management, InsideDesk brings a level of transparency and understanding that is unparalleled.

Transparency in Data-driven Decision Making

By centralizing PMS, Payor, and User data InsideDesk leverages cutting-edge analytics and data-driven methodologies to provide DSOs with a clear and comprehensive view of their revenue cycle operations. Through detailed performance metrics and KPI tracking, DSO leaders can make informed decisions that drive growth and profitability. This transparency ensures that every action is grounded in empirical evidence, mitigating the risks associated with uncertainty.

Understanding the Unique Needs of DSOs

InsideDesk recognizes that the dental revenue cycle has its own set of challenges and complexities. We offer claims management solutions that address specific pain points. Whether it’s aggregating claim data into a single dashboard to increase team productivity, or automating claim responses and payment information to reduce your Days Sales Outstanding (DSO). With a team well-versed in the nuances of DSO revenue operations, we can even assist with live training and continuous support through education and visual representation. InsideDesk is equipped to provide actionable recommendations that yield tangible results.

Foresight for a Resilient Future

In addition to addressing immediate concerns, InsideDesk takes a forward-looking approach. By analyzing market trends, consumer behavior, and emerging technologies, InsideDesk helps DSOs position themselves for long-term success. This foresight allows DSOs to proactively adapt to industry shifts, ensuring they remain competitive and resilient in the face of uncertainty.

As DSOs brace themselves for the uncertainties of 2024, InsideDesk emerges as a trusted partner in their journey towards sustainable growth. By offering transparency, understanding, and foresight, InsideDesk empowers DSO leaders to make informed decisions that will shape the future of their organizations. In a year marked by ambiguity, InsideDesk provides the clarity needed to not only survive but thrive in the evolving landscape of the dental industry.

Dental Service Organizations (DSOs) play a pivotal role in the modern dental landscape, managing multiple practices to provide efficient and comprehensive care. In this context, the choice between open and closed architecture for practice management software becomes even more critical. This decision significantly impacts the scalability, efficiency, and integration capabilities of DSOs. Understanding the nuances of open and closed architecture is crucial for making an informed choice that aligns with the unique needs of Dental Service Organizations.

Defining Open and Closed Architecture

Before we delve into the specifics, let’s establish a clear understanding of open and closed architecture in the realm of dental practice management software.

Open architecture refers to software systems designed to seamlessly integrate with third-party applications. It offers flexibility, enabling easy interoperability with various tools and technologies. In the context of DSOs, open architecture allows for streamlined communication between different practices and their specialized tools and software.

Closed architecture, on the other hand, refers to software systems that are more self-contained and less adaptable to integration with external applications. In this model, the software is often optimized to work efficiently within its own ecosystem, potentially limiting interoperability with other tools.

Advantages of Open Architecture for Dental Service Organizations

1. Interconnectivity:

Open architecture empowers DSOs to seamlessly integrate various software solutions across their network of practices. This promotes a cohesive workflow, where patient information, billing data, and other critical elements can be shared effortlessly.

2. Customization and Adaptability:

DSOs often have diverse sets of practices, each with unique requirements. Open architecture allows for customization, enabling the tailoring of software to meet the specific needs of individual practices within the organization.

3. Scalability:

As DSOs expand and acquire new practices, open architecture systems provide the flexibility to integrate different systems and technologies. This scalability ensures that the management software can grow along with the organization.

4. Future-Proofing:

In a rapidly evolving technological landscape, open architecture systems are more likely to adapt to emerging tools and technologies. This future-proofing ensures that the DSO remains at the forefront of dental practice management.

Advantages of Closed Architecture for Dental Service Organizations

1. Consistency and Control:

Closed architecture systems offer a controlled environment, which can lead to enhanced consistency and control over the software ecosystem. This can be particularly appealing for DSOs that prioritize standardized processes.

2. Security and Stability:

Closed architecture systems are often optimized to work seamlessly within their designated environment. This can result in enhanced security and stability, which is crucial for safeguarding sensitive patient information.

3. Simplified Implementation and Support:

Closed architecture systems are typically pre-configured and ready to use, which can lead to a smoother and faster implementation process. Additionally, dealing with a single vendor for both software and hardware can simplify troubleshooting and support.

Making the Right Choice for Dental Service Organizations

When it comes to choosing between open and closed architecture for dental practice management software within a Dental Service Organization, several factors should be considered.

For DSOs Prioritizing Integration and Flexibility: If seamless integration, customization, and scalability are paramount, an open architecture system is likely the better choice. This approach aligns with the diverse needs and growth potential of Dental Service Organizations.

For DSOs Emphasizing Control and Security: On the other hand, if standardization, control, and security are top priorities, a closed architecture system may be the more suitable option. This can provide a stable and secure environment for managing multiple practices.

In conclusion, the decision between open and closed architecture in dental practice management software is a pivotal choice for Dental Service Organizations. By carefully weighing the specific needs and priorities of the organization, DSOs can make an informed decision that sets the foundation for efficient and effective dental care across their network of practices. Remember, what works best for one organization may not be the ideal choice for another, underscoring the importance of a tailored approach to software selection.

Ultimately, open architecture isn’t entirely open, and closed architecture isn’t entirely closed. When deciding, lean into interoperability and full access to your data. In a rapidly evolving technological landscape, more choice fosters competition, drives innovation and better outcomes. In summary, choosing between open and closed architecture in dental practice software is crucial for Dental Service Organizations. By considering the specific needs of the organization, DSOs can make informed technology decisions for efficient dental care and scalable support. Keep in mind, what works for one organization may not be the best for another, highlighting the importance of personalized software selection.

The dental industry is constantly changing, and Dental Service Organizations (DSOs) have become an increasingly efficient model for providing non-clinical functionality to dental practices. DSOs want to be efficient and profitable, so they have to decide whether to centralize their operations or keep them decentralized. In this post, we’ll talk about centralization, when it makes sense, and the pros and cons, using examples related to RCM.

Is It Time to Centralize?

The decision to centralize should not be taken lightly. It requires careful consideration of various factors, including the size and growth rate of the DSO, the number of practices under its management, and the geographical spread of these practices. Here are a few indicators that suggest it might be time to centralize:

Scalability Challenges: As a DSO expands, managing multiple decentralized practices becomes increasingly complex. Duplication of efforts, inconsistencies in processes, and lack of effective oversight may hinder growth. Centralization can help streamline operations, ensuring scalability and consistent standards across all practices.

Inefficient Resource Allocation: If your DSO is struggling with inefficiencies in resource allocation, centralization can bring about significant improvements. Centralizing functions such as submissions, claims follow up, and posting allows for better utilization of resources, economies of scale, and cost savings.

Standardization and Quality Control: Maintaining consistent standards of billing practices is crucial for successful cash flow of a DSO. Centralization enables standardized protocols, training programs, and quality control measures across all practices. This ensures that all AR is dealt with in a timely and consistent manner that maximizes collections.

Benefits of Centralization:

Streamlined Operations: Centralizing administrative functions brings efficiency and reduces redundancies. By consolidating resources and streamlining processes, a DSO can save time and money. FTE (full-time employee) costs are some of the highest that affect the bottom line for a DSO. Centralized billing functions facilitate smoother operations, fewer employees, and enhance productivity.

Improved Standardization and Training: Centralization allows for the implementation of standardized protocols, policies, and training programs. This ensures that every team member follows best practices, delivers consistent work, and adheres to department requirements. Training can be more structured and comprehensive, leading to a higher level of professional development for staff members.

When to Centralize:

The decision to centralize should be guided by a thorough analysis of the DSO’s specific circumstances. Factors to consider include:

Organizational Maturity: Centralization is often more suitable for mature DSOs with a stable foundation, strong processes, and a clear intent for centralizing functions. Trying to centralize too early in the growth phase can lead to unnecessary complexities and challenges.

Technological Infrastructure: Robust technology infrastructure, including reliable communication and information management systems, is essential for successful centralization. Consideration of investment in these systems should precede or accompany the centralization process.

Leadership and Management Capabilities: Effective leadership and management play a vital role in the success of centralization. DSOs should assess whether their leadership team possesses the necessary skills and experience to drive and manage the centralization process effectively.

Drawbacks of Centralization:

Change Management: Centralization often necessitates a significant shift in organizational structure and culture. Resistance from decentralized practice teams may arise due to concerns about loss of autonomy or fear of disruptions in established workflows. Managing this resistance requires effective change management strategies and open communication channels.

Initial Investment and Transition Period: Centralization involves upfront costs associated with technology infrastructure, staff training, and potential consolidation of personnel. Additionally, transitioning from decentralized to centralized RCM processes may cause temporary disruptions, requiring careful planning and coordination to minimize the impact on cash flow.

Example: Transitioning from decentralized billing systems to a centralized claims follow up process requires upfront investments in software, hardware, and staff training. While the long-term benefits are significant, the initial costs and transitional challenges should be considered.

Conclusion:

Deciding whether to centralize your dental DSO’s operations, particularly in the context of RCM, requires a thoughtful assessment of your organization’s specific circumstances. Centralization can bring numerous benefits, including streamlined RCM operations, economies of scale, and improved compliance. However, it is essential to weigh these advantages against the potential challenges and drawbacks, such as resistance to change and upfront investments. By carefully evaluating these factors, you can make an informed decision that aligns with your DSO’s goals and growth trajectory.

Like a kid in a candy story, Doctors today have their choice of dental group “flavors”. You have DSOs (the “S” can be support or service, and there is an apparent difference), DPOs, Group Practices, PE backed, VC backed, or even privately held. The great equalizer is that they are all businesses at the end of the day. The only way they continue to operate is by bringing in enough money to cover their expenses, which allows them to invest in more staff, equipment, space, or additional offices. A DSO is a business, all businesses aim to be profitable through effective revenue cycle, thus all DSOs are revenue cycle companies. Revenue cycle management is challenging, but it doesn’t have to be thanks to technology. How is your DSO leveraging technology to improve your business?

Leveraging Technology

Revenue Cycle Management for most DSOs is intertwined and has many feedback loops to previous steps. Offices must deal with both patient and insurance AR, but for this article, we’ll look specifically at insurance AR. For simplicity purposes insurance AR can be broken down into four steps: Verification and Submission, Posting, Claim Follow-up, and Claim Analysis. Each of these steps is laborious and time consuming. There has historically been a lag in the dental industry with adopting technology. However, in the last 5 years the growth of dental groups and DSOs who find themselves requiring efficiency and visibility at scale to be successful has been a driver of change. At the same time there has been an exit of RCM talent in dentistry post-Covid that has driven a boom in the desire and need for technology as a resource multiplier. There are several companies that offer solutions to each of these steps, and some solutions are more straightforward than others. The state of technology in the RCM space is just starting to get off the ground but anticipate big leaps in the coming years.

Insurance Verification/Eligibility of Benefits

The first step in the revenue cycle process is tedious, time consuming, and the data you’re trying to pull isn’t always accurate. The benefit verification process is crucial to effective treatment planning and delivery, as well as informing patients accurately on their payment responsibilities. You need strong processes in place to make sure you’re collecting patient balances before they leave the office because it becomes increasingly difficult to collect once they leave. The process to verify insurance and get a complete breakdown of benefits, for most offices, involves phone calls, faxes, or visiting payor portals. One of the most common solutions to this “people necessary” task is to outsource the work. A third-party company has entire teams dedicated to making these phone calls to insurance companies or getting the data from the payor portals. There are several companies that use technology to help automate these manual steps. Most allow you to set schedules, so you can get the verified patient eligibility and benefit levels a few days before they’re scheduled to come in. These technologies save time by eliminating the looking up of data or encountering miscommunication with an insurance agent. As mentioned before, the providers of this information is a current limiting factor, but it’s slowly getting better through layers of data.

Posting

In an ideal situation, you have successfully submitted your claim with all necessary attachments and correct codes. The next step in the payor AR revenue cycle is the posting and closing of claims. Now your office must go through the remittance process and make sure the insurance payment matches the check/EFT/VCC deposit that’s in your bank account. Once you’ve confirmed those numbers match, you then go back to your practice management system to match the potential bulk check portion to the specific claim it belongs to, post the payment, and close the claim. This process requires a lot of back and forth between multiple systems, and additional opportunities for accounting errors to occur. While there is technology available it is a young technology in dental and the automation of posting can become complicated with DSOs with factors like: how they set up their banking structure and legal entities which can lead to additional errors. It’s one of the reasons why there’s such a low adoption of EFTs in dentistry compared to medical. Once the technology can overcome these complexities it will be beneficial in the posting process.

Claim Follow Up

Oftentimes claims are denied or only partially paid because they might be missing supporting documentation, attachments, or codes might be inaccurate for treatment performed. It is even common for there to be a data issue causing denial, or inability of a payor to accept/process the claim on their end. The average office has a Clean Claim Rate of 60%, which are claims that are paid on the first submission without additional intervention from your team. That means that 40% of your total claims submitted need additional attention, which can be a significant amount of collections outstanding. This is revenue that cannot be ignored, so the claim follow up team is usually the largest, both in size and FTE cost for a DSO. These team members log into their PMS, print out an “aged AR report”, go line by line on that sheet to see which patients/claims are still outstanding. Then they have to manually go to each individual payor portal, type in name, date of birth, date of service to try and find the claim. Once they find the claim, they open it, download the EOB, and figure out why the claim was not paid out in full. They have done all the research just to figure out what’s going on, now they still have to go fix the claim data, add the additional x-ray, or attach the requested narrative and go resubmit that claim again. This time inefficiency compounds at scale when there is one person handling 5 offices. Technology, like that provided by InsideDesk, helps to automate the labor intensive and time-consuming part of this process. Team members working aging no longer have to spend time printing out aging reports, visiting nearly as many portals, or making as many phone calls to figure out the status of a claim. The automation of these tasks allows them to close claims faster, get paid sooner, and paid at 100% of what’s owed. While this technology has a proven foundation to be beneficial, it is quickly advancing to provide more data and deeper insight.

Analytics

The final step in your RCM process should be to analyze your internal processes. The ideal progression is smooth and fast from accurately verifying benefits to cleanly submitting claims, getting claims processed, paid, and posted within a 10–14 day period. While this is a typical timeline for “clean claims”, there are numerous opportunities in this process for things to stall or derail completely. It’s not enough for DSOs to only understand what has happened, but what is currently happening? The reality is it’s extremely difficult to know this today. The data is housed in 2-3 different places, which means pulling in multiple data sources, attempting to centralize, standardize, and manipulate to be able to process through a pivot table. There isn’t an easy way to quickly understand why your claims are being denied, at which offices, for which specific payors. InsideDesk’s analytics provide multiple data connections, which provides a streamlined way of centralizing and presenting actionable data to senior leaders.

The process of getting paid by insurance is simple, but it’s not easy. DSOs are realizing the necessity of technology, as a resource multiplier, as a key part of their RCM solution. They’re starting to understand not only the importance of RCM as a core function, but also that many of the traditional tools don’t provide what they need as they continue to scale. As RCM continues to be an important focus for DSOs looking to scale, the conversations also will evolve into deeper partnerships between dental groups and tech companies to provide the highest value products with scalable functionality.

A Fresh Look at RCM

Revenue Cycle Management (RCM) is gaining momentum like few things have in the dental industry in the last few years. COVID-19, inflation, and an economic slowdown have all contributed to a much higher level of understanding and focus on revenue cycle management in the Dental space. DSOs and dental groups are realizing the importance of this function within their organizations as the primary engine for cash flow and a critical lever to deliver scale. As they are taking a deep dive into their business, most are realizing that they are completely blind to several key performance and operational metrics within their own revenue cycle. To complicate matters, it can often be the case that a DSO maintains and operates more than one flavor of RCM support model at the same time. At scale this becomes hard to keep track of and more groups are finding the value in specialization over generalization of tasks. When it comes to selecting the right RCM model, it does depend on the stage of growth and the nature of the support services that work best with the provider partners. Perhaps, the right approach is a process, powered by technology and automation, that moves with a DSO over time vs. a one size fits all approach.

One RCM Model to Rule Them All

As DSOs adapt and grow, they are trying to figure out which “model” is the best to use as they structure their teams. If you keep things In-house, then you’re opting to go through the process of hiring, maintaining staffing, education, and training. You have the ability to manage processes, but how easily can you measure the work being done by 50 employees at 50 different offices? The limiting factor to both in-house models, centralized or decentralized, is people. Skilled RCM workers who can be efficient and effective immediately do not grow on trees. It can take anywhere from 3-6 months minimum for someone to understand all the nuances that go into submitting claims with correct codes and attachments, the best way to work aged claims, or how to expedite your posting and collections process.

The solution for some DSOs and dental groups is to Outsource some, or all of their revenue cycle, to a group that has a team of “experts”. There are dozens of outsourced billing companies that can handle a portion of your revenue cycle, i.e., working aged claims past 90 days, or all of it from verification to posting. While there are plenty of benefits to giving away the headache of making any of the above decisions, it will come at a cost. More importantly, can you verify their effectiveness, or track how efficiently they’re working for you?

The New “Centralized” RCM Team

Every DSO is faced with the decision of which RCM model they want to build their business on. For some groups it becomes paralysis by analysis as they try to plan long term for their growth, and the cost of pivoting from one model to another seems overwhelming. In the end nothing gets done, nothing changes quickly, and revenue continues to be untraceable with no clear understanding of where improvements are needed.

The best solution might be a “yes” to all models. You’ve probably identified positives from each of the different RCM team structures. As a DSO continues to grow and scale, there are inherently several functions that benefit from “centralization”. The word centralize, as described above, typically brings about a connotation of a team in the same building. While this was true just a few years ago, the age of work-from-home possibility is turning the phrase on its head. Centralization of an RCM team moving forward means we can reimagine the possibilities and combinations. You may have the front office focus on patient intake data entry, patient balances, and claim batching, as they are closest to each of these tasks. Then you might have a team of billers, some working in an office and others working from home, who review and submit claims, follow up and manage claims to Payers, and post payments once processed. This team may focus specifically on claims under 90 days, and their goal is to get insurance payments processed and posted quickly. This ensures that if there is any remaining patient balance, then the office has the highest likelihood of collecting. You might utilize a third-party billing company for any Payer AR over 90 days. These claims might take longer to collect or be associated with difficult/slow Payers where it would be worth the money to let someone else handle and collect your dollars. Ultimately you could mix and match who handles what part of the revenue cycle, but there is a place for each “model” to have an effective place in the entire process. Now the last challenge is how do you centralize a decentralized workforce?

Challenges of “Centralization” and the Necessity of Technology

While the new centralized RCM team is a compilation of multiple teams, this presents obvious challenges for tracking and managing each of the moving pieces. The problem is that today all of the tracking is done manually via Excel, Google Sheets, and in many instances by printing and writing on AR sheets. There are too many moving pieces of data that involve separate software (20 offices on Dentrix, 8 offices on Open Dental, 4 on Eaglesoft, etc.) and reports that must be manually manipulated to figure out what’s going on. You could move everyone to one practice management system, but now you’ve entered a potential change management nightmare. All of this manual work up front to aggregate and manipulate data means that by the time it gets to someone that can make a decision, the data might be weeks or even a month old. Leaders can’t be expected to make effective decisions when the information they have isn’t up to date. The solution? Technology. The new centralized team needs a platform that every team member, regardless of location, can work out of – a tool that provides accurate and transparent reporting that’s easily accessible by all. While most RCM tech is just starting to get off the ground, DSOs utilizing companies like InsideDesk are seeing a 51% increase in RCM team productivity, a 34% increase in AR collection speed, and a $65,000 increase in cash flow per office. These are the measurable increases in efficiency and realized revenue that are possible with the new “centralized” RCM team.

We frequently have conversations with DSOs about revenue cycle performance, metrics, and KPIs. The dental revenue cycle generates mass amounts of useful data which can sometimes seem overwhelming and difficult to organize. However, if you believe the noted management consultant Peter Drucker who said, “You can’t improve what you don’t measure,” then where and how do you start? For any DSO, starting with these five baseline metrics is a great foundation to find simplicity on the other side of complexity. Data is your friend.

Percentage of A/R Greater than 90 Days

Aged receivables exist in every DSO and practice. Calculating the % of receivables over 90 days is an important indicator of the overall health of your RCM because, while some claim failures are inevitable, too high a percentage in the 90 day plus range can be a sign of more systematic and serious resourcing or billing challenges. It’s human nature to deal with the easy claims first, but allowing an unpaid claim to age drastically reduces the chance of receiving any payment at all. Even if the balance is ultimately transferred to the patient, patients will struggle to remember and not feel compelled to pay for a procedure months after a visit. This metric is becoming increasingly more important as out-of-pocket costs rise, so keep a close eye on it.

Ideally, less than 15% of your receivables should reach this age, but the lower the better. The cost to collect increases over time, and the longer you allow your accounts to age, the less likely it is you will recover them and the more it will cost you to do so.

Clean Claim Rate

An ounce of prevention is worth a pound of cure. A clean claim is a claim that flows from submission to collection without needing additional involvement from the RCM team after the first submission. Clean Claim Rate gives your team visibility to problems that are causing claims to require resubmissions, like mistakes in patient registration information or claims failing to meet a payer’s requirements.

They say, “you never have time to do it right, but you always have time to do it over.” Slow down, and focus on clean submissions, clean claims is the #1 way to reduce revenue cycle workload and increase collection speed, the best groups average over 70% in clean claims.

Collection Days

Collecting what is owed entirely and quickly is what all RCM teams aspire to. Tracking your collection days, the difference between the payment date and date of service, can help you improve your cash flow by identifying and fixing problems in your billing and collections processes that are causing delays in payment. By reducing your collection days you increase the amount of money you collect in a given time period, which can have a significant impact on your overall cash flow. For example, if you are able to reduce your collection days by 10 days and you collect an average of $100,000 per day, you’ve increased your cash flow by $1,000,000.

Ideally, you want to be able to turn over your A/R in less than 30 days. Top performing teams can collect open A/R in less than 15 days though this metric will vary by payer mix as well.

Denial Rate

Your denial rate is the percentage of insurance claims that are fully denied by the payers. There are a couple of possible variations to this metric as it can be calculated both at the claim level but also at the claim line level. Let’s focus on the claim level. This metric validates the effectiveness of your pre-billing processes, especially your insurance eligibility and benefit validation process. A low denial rate indicates that your revenue cycle processes are working well and you are preventing as many mistakes from happening as possible. Keeping an eye on this metric could alert you to claim pre-billing verification opportunities, submission issues, or sometimes credentialing issues that could dramatically affect your revenue and cash flow.

The best performers have an average claim denial rate below 5%, but many DSOs and practices are regularly over 10%.

Claim Yield

The final baseline metric your practice should be regularly monitoring is Claim Yield. This measure represents what the payer paid against the expected fees. For example, if your practice collected 70 claims with a total expected amount of $10,000 and received only $6,000 in payer payment, then the claim yield would be 60%.

A high claim yield indicates that the organization is able to successfully collect payment for a large percentage of the claims it submits. On the other hand, a low claim yield may be a sign of problems with the organization’s billing and collections processes, such as incorrect coding, inadequate follow-up on unpaid claims, incorrect fee schedule, or other issues that may be causing claims to be denied. By tracking claim yield and identifying areas for improvement, organizations can optimize their billing and collections processes and increase their overall revenue.

Ideally, every claim you submit for payment would be paid at 100% but we know that isn’t the case. Best practices dictate that your Claim Yield should be greater than 90%, industry best performers can achieve up to 95%.

Starting with a solid understanding of these five key metrics will give you confidence troubleshooting, allocating your time and resources, and put you and your RCM team on a path to continuous improvement. Monitoring them consistently over time will help ensure that your RCM results are stable, reliable, and hopefully optimized.

The State of Dental

As we head into 2023, DSOs are quickly approaching the crossroads of a perfect storm formed by COVID, The Great Resignation, and a looming recession. How groups handle the next 12-18 months will, in large, determine who comes out on top, and who is swallowed up. The economics driving this shift is due in part to rising inflation and the cost to borrow. Debt is becoming more expensive and riskier for DSOs to continue the explosive growth they’ve experienced over the previous 18 months. A primary vehicle for increasing cash flow has been to add practices to a DSO’s portfolio, but as the winds of change blow, a buzz word floating around the DSO space is “same store growth.”

Recession and Same Store Growth

Same store growth, as it pertains to a dental office, is the primary focus on maximizing efficiencies and increasing cash flow compared to the previous year. There are many aspects of an office to look at to accomplish this: optimizing your supply procurement, utilizing AI to diagnose treatment more often and accurately, and converting more patient calls to appointments. While all aspects of an office should be looked over with a fine-tooth comb, for most offices revenue cycle optimization is the largest source of untapped cash flow.

Importance of RCM

Revenue Cycle Management, RCM, has gained traction from a buzz word to a realized crucial function at the office and DSO level. Anywhere from 60-90% of an office’s patients have some level of dental insurance coverage. This means that most “production” will not be paid by the patient, but that the office will be submitting a claim for insurance payment. The tracking of claims, payments, and outstanding balances due from insurance or patients is the management of an office’s revenue cycle. Unfortunately, this process today is quite manual, time intensive, and difficult to track for a single office. RCM becomes exponentially more difficult when you are dealing with 10 locations, or 50 locations. There are very few tools or reports available within a practice’s management system that allow for the tracking or working of these claims, and it’s made especially difficult when multiple systems are used across an organization (i.e. a few offices on Dentrix, Open Dental, or Eaglesoft). When you look at and understand the steps required to manage and follow up on claims, it’s not surprising that most offices struggle to keep up.

Tools and Solutions

The saying goes, “you can’t manage what you can’t measure.” This is what leaders are thinking, and currently are looking for new technology as an answer. There are companies, like InsideDesk, that are turning the tables, and providing RCM data that finance and operation leaders have been looking for. While the analytics and insights are powerful, it’s only half the solution. InsideDesk also provides a platform to help RCM teams become more effective and efficient, at a time when the cost of labor is at a premium. Automation of tedious tasks like EOB collection and claim statusing allow team members to work more claims per day. The daily guided claims list prevents time wasted from printing out AR reports or creating cumbersome excel sheets. These tools allow offices to increase cash flow, and senior leaders to track progress at a time when “same store growth” is becoming top of mind for all.