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Dental Revenue Cycle Management KPIs For A Successful and Healthy Dental Practice

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Most practices have goals and targets set for each year when it comes to their revenue collection. Structured plans are devised to ensure this goal is met. With all the steps involved in making a practice a successful one, it becomes extremely important to track the viability of these goals and any need to reform them. What better way to do this than tracking your Key Performance Indicators(KPI)?  KPIs don’t just enable you to identify areas of improvement, they also provide insight into possible future trends if you maintain the strategy already in place.

KPIs are facts, numbers, and metrics that provide insight into the efficiency of the dental RCM. They let the practice have an in-depth understanding of the various aspects related to their RCM. A practice that fails to assess their KPIs in RCM is operating blindly, as they have no early signs or warnings of any decline in the performance of the revenue cycle. Ignoring your KPIs is one of the most frequent causes of a lackluster revenue cycle.

Here are some of the important KPIs to make sure that your RCM is running effectively:

Days in AR

The days spent in AR show how long it usually takes your practice to get payment for services provided. This number aids in determining how successfully the practice is collecting payments and how efficiently it handles account receivables, thus shedding light on the flow of revenue at your practice. Ideally, it’s always better to keep your AR days within a 30-day benchmark, but never let them exceed 60 days. To measure the days in AR, you need to first consider a certain time period you would like to check. This could be the past month, past quarter or even the past year. Simply add the daily charges within this time period and divide it by the total number of days in the chosen time period. 

Net collection Rate

The net collection rate indicates what percentage out of the total payments due, is actually received by the practice. It shows how successful your practice is at collecting the payment owed to them. The net collection rate could reveal a great deal about your practice’s collection tactics and how you can modify them. A consistent low net collection rate indicates a deeper problem like internal ineptitude. As with Days in AR, the first step to calculating the Net Collection Rate is to decide on a timeframe. You then need to divide the total payments that you received within this timeframe by the payments that were expected or agreed upon. The Net Collection Rate is determined once this number is divided by 100. 

Bad debt

Bad debt is a common occurrence and is a part of having your own business or practice. Collecting patient payments on time may not always be easy but not all failure to collect instances need to be written-off as bad debt. A high percentage of bad debt is never good for your practice. Calculating the bad debt ratio will help your practice determine if there is a need to change the collection process or even if there is a need to change your approach in patient communication. To calculate your bad debt ratio, divide the bad debt written off by the total sales of your practice. 

Clean claim rate

Clean claim rate is the percentage of insurance claims that are submitted and successfully reimbursed at the first instance of submission. A high clean claim rate means faster payments. It indicates that the claims being submitted have a high quality of data. Measuring the clean claim rate helps practices monitor the effectiveness of the data collection process prior to claim submission. Rejected claims need a lot of time to resolve and involve additional work and cost to both the provider and the payor. 

 Denial rate

While denied claims can result in underpaid claims or no payments, they can also be remedied and sent back. However, making many appeals for rejections may result in additional fees and may reduce the effectiveness of the revenue flow. The denial rate can be calculated by dividing the total amount denied by the total amount submitted as claims. If the percentage is above 10, you may need to re-examine your eligibility and verifications and coding processes. 

There are several other KPIs that you can use to measure the effectiveness of your RCM like Point of Service Cash Collection, Revenue Per Patient Visit and Late charge rates. Understanding what your practice needs and ensuring the use of the right KPIs can go a long way towards maintaining a healthy RCM.

Why is Dentistry a Stressful Job?

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There is no profession that is a walk in the park, especially if you are running your own business. This applies to Dentistry as well. The difficulties and challenges associated with it make for a really stressful job. Much of the research conducted on mental and physical health of dentists points to how seriously stress and dissatisfaction affect their lives. Stress could be caused by multiple factors, from relationships with patients, working hours, time and scheduling pressure, technical issues, to job or income dissatisfaction.

A survey done by the British Dental Association in 2019 showed that out of the 2,053 respondents, a whopping 54.9% reported that they were experiencing high levels of stress related to their job and nearly half of this number claimed to not be able to cope with this stress. 

Why exactly is dentistry a stressful job? Here are some of the common reasons:

Uncooperative patients

Imagine dealing with patients who are uncooperative, demanding, and not satisfied with what you are doing. It is bound to have a negative impact on your mental health. Every day, dentists are forced to have a cheerful disposition, a cheerful smile and be a thorough professional even in front of downright rude and mean patients. Add to that, patients who do their own research and attempt at-home remedies instead of taking professional help and this creates additional work to undo damage that should not have been done in the first place. Heightened emotions, worry, stress, depression, and anxiety, all naturally build up without a meaningful outlet.

Impact on physical health

Physical labor may seem minimal in the case of dentistry. What anyone pictures when they think about dentists is someone sitting comfortably on a chair while looking into patients’ mouths. The reality is that sitting in the same slouched position while having to constantly hold your arms up and your head down can cause pain and stiffness. The shoulders, arms, neck and back bear the brunt of this. It requires prolonged periods of ensuring that precise work is done without any sudden movements. In fact, Dentistry is considered to be one of the most physically demanding jobs. If the practice is a successful one with a continuous flow of patients, it leaves no time for relaxed breaks, exercise or even a bit of stretching. 

Economic pressure

With the economic environment and increased competition, the possibility of establishing a financially robust practice has become challenging. Dentists could work 24/7 and still may only earn a nominal amount considering that most of the cash flow gets invested back into running the practice. Most dentists are forced to work even during lunch hours due to financial constraints. The low number of breaks that they get to indulge in leaves them completely exhausted by the end of the day. Continuous overtime work and a huge workload could lead to burn-out. 

Confinement or isolation

The work dentists do is confined to a limited amount of physical space. Most dentists spend all of their time working within this space. There is little or no contact with the outside world, which makes them isolated. This also means that they do not have the benefit of regular peer-support that is available to other healthcare practitioners. 

Time pressure

Dentists are forced to go through long hours of exhausting work, which takes time away from any kind of leisure or entertainment and leaves them drained. They need to provide their undivided attention to every single patient as their work involves precise movements to be made with small and delicate tools. As the day progresses though, mental exhaustion and stiffness from prolonged hours of staying in the same position can cause loss of focus. This could mean that the same work could take more and more time to finish as the day moves forward. Additionally, it is quite impossible to predict when urgent care may be needed. If emergency situations arise during a packed day on the job, finding the time to meet all the appointments becomes difficult. Regardless of how well appointments are scheduled each day, one emergency could hijack a whole day’s work. 

Stress of perfection

Dentistry is a profession where even the tiniest of mistakes could have a huge physical and financial impact on both the dentist and the patient. Every step in the procedures done by dentists needs to be carefully curated. In case there are any errors in the services, the problem needs to be rectified as soon as possible. All this must be done while remaining calm and composed so as not to affect the patients. Ensuring that every step of each procedure is done perfectly is a very common reason for stress among dentists. 

Dentistry is undeniably one of the most stressful jobs there is, but it can certainly be made less stressful by following a healthy professional and personal lifestyle. As a first step, separate your work from your personal life; take breaks if needed. Set up sensible working hours with much-needed breaks. Exercise does not always have to be about cardio or HIIT. Simple stretches in between patients or walking on a regular basis within the halls of the practice can also have a positive impact. Improving your working environment can also make a huge difference. Become less isolated and try to share your worries with your fellow colleagues. All this can make dentistry a little less stressful and easier.

A Healthy Denial Management System Within RCM

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The average claim denial rate has risen considerably over the past few years. This means that there is an increase in the number of payments getting delayed or unpaid, leading to a loss in revenue and disturbing a practice’s overall revenue flow. Practices often make the mistake of blaming insurers for claim denials, but it would in fact be a better use of time to analyze the denial management strategy that is being used. There are also times when they make the mistake of not following up on denied claims, leading to an additional loss of revenue.

What is denial management?

Denial management includes identifying and correcting registration, billing, and medical coding flaws through trend tracking in order to develop the best solutions for reducing the number of denials. It focuses on identifying the reasons for denials and developing solutions to either reduce the risk or avoid them entirely. It helps mitigate the chances for future denials, thus ensuring that a practice receives quicker payments and a steadfast cash flow.

What are the steps involved in denial management?

Identifying the root cause of denials

The real difficulty in denial management lies in identifying the root cause of most denials. Identifying the causes, especially the recurring ones, is really important for managing denials productively. Claim denials can happen for a lot of reasons, including late claim submission, duplicate claim submission, incorrect or missing patient data, services not covered by the plan, incorrect documentation, etc. Identifying the most common cause for denials will help the practice to take steps to correct the disconnect. 

Monitoring and tracking the denials

Another integral step in denial management is the monitoring and tracking of denials. It is important to have accurate records of the denied claims. This can be done according to the type, date of service, procedure codes used, patient name etc. Additionally, tracking can be done for each insurer that you file with. Maintaining the tracked date on the basis of time, source, number, and reason for denial can help with effective communication with the insurers. This aids in lowering the likelihood of future claim denials.

Managing denials

The next step is the actual resolution and the resubmission of claims. Managing the denials, however, is itself a multi-step process. It involves tracking all the denials, sorting through them to understand the different reasons for these denials and then creating a streamlined process to rectify them, if possible. The process then gets implemented and utilized each time there are denials and this needs to be done in as little a time as possible to avoid

Data Analysis In Revenue Cycle Management

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Revenue cycle management maintains and operates the financial health of a dental practice and the challenges of running a healthy revenue cycle can be plenty. From accurately entering claim data and information to securing reimbursement and payments, several steps are involved in managing the revenue cycle of a practice. Inefficient revenue cycle management can put your practice at risk, as it not only hinders your practice’s growth but also results in a negative patient experience. Finding a solution for your RCM-related worries can be like attempting to find a needle in a haystack if a thorough understanding of where those problems occur is not achieved. Practices need to dig deeper into their revenue management if they truly want to fix their RCM and get back on the track of profitability and security.

This is where data analytics comes in; it offers you an insight into how precisely your RCM is running and where the difficulties lie. It also provides insights into everyday operations and projections of future trends and functions. This helps to make data-driven decisions and correct issues even before they occur. Such data-driven insights are required on a variety of topics, from profitability to the intricate analysis of lost revenue.

Data can be analyzed in three ways:

Descriptive

Descriptive analysis basically gives your practice the answer to the question, “What happened?” This is the threshold that practices should begin with as it is the simplest to perform. It mainly involves gathering and analyzing historical data about your practice. This provides you with information on potential revenue leaks caused by problems with insurance carriers, internal operations and the like. 

Diagnostic 

Diagnostic analysis helps answer the question, “Why did it happen?” It basically unearths links between all the data collected and helps your practice pinpoint what led to the problem in the first place. Identifying the cause of the problem and any connections with other problems will help you take action accordingly. 

Predictive

Predictive analysis, on the other hand, provides your practice with an answer to the question, “What could possibly happen?” It takes the historical data collected, analyzes the patterns found, and then predicts future trends in the revenue flow of the organization. The practice can adjust its present revenue cycle billing method to reflect the trends identified from this analysis. This is also the type of analytics that a lot of practices use machine learning or artificial intelligence to perform. 

Prescriptive

Prescriptive analysis is the most advanced form of analysis and it answers the question, “what should the practice do?” It makes one or more recommendations based on collected data, allowing the user to consider the potential results of each suggested course of action. The accuracy of prescriptive analysis depends heavily on the accuracy of the earlier steps and hence can be the most difficult to perform. The end result, however, is of high import and is undeniably a powerful tool for RCM. 

From improving your practice revenue to creating a better patient experience, data analytics can benefit your practice in a lot of ways. 

Some of the main benefits include:

Reducing minor errors

Data analytics helps validate the data collected during the revenue cycle management process. It scrubs your data for any minor errors, and compares the collected data to the information from the insurance provider.

Understanding your RCM better

Data analytics helps your practice identify and breakdown its revenue cycle process, thus letting you understand your RCM better. It also gives your practice a clear picture of each step involved in RCM, thereby making it easier to identify any one that is not performed accurately. With this, you can finally assess and benchmark your RCM processes. You can now create appealing reports that provide a complete picture of the actual state of your revenue cycle. It becomes much easier to improve your practice’s profitability when you can identify the main cause of a trend that results in decreased profitability.

Determining key performance indicators

KPIs provide essential data on healthcare revenue. They keep a close eye on the claims processing to spot any errors and also assess the denial rates for improved reimbursements. KPIs are very important for the growth of your revenue cycle, and these KPIs can only be identified through proper data analysis. Only through a thorough data analysis can the trends in the revenue cycle and the areas that need improvement be identified.

Improving patient experience

With proper data analysis, patient payment collection can be made a lot easier, giving you more time to focus on patient care and treatment. Your patient experience can improve exponentially when you have sufficient data collected through data analysis and understand how payment collection can be improved without causing any inconvenience to them.

Reducing denials

You can quickly identify patients and insurance companies that have frequent denials and rejections by incorporating data analytics into your revenue cycle management. This helps your practice improve its revenue flow by lowering its denial rate. Additionally, with proper data analysis, you can easily identify the frequent trends in denials, thereby making sure that you don’t endure similar denials or rejections in the future. Thus increasing your claim acceptance rate.

Understanding the performance of your revenue cycle is crucial for the steady growth of your practice. Remember, it is vital to remain on top of trends and benefit from utilizing data analysis in its entirety. Data analysis can provide insights into your practice that can help you make better decisions, increase revenue, operate more efficiently, and improve patient care.

Create a Better Dental Huddle Checklist

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Daily huddles have been assimilated into the workings of several industries, including the oral health and dental industry. Practitioners see these huddles as a way to sync up first thing on a working day, organize the day’s tasks and provide an environment to bond. There are, however, several practitioners who find daily huddles unnecessary and ineffective. In several cases, this is, unfortunately, true. When huddles are conducted with no specific format or aim, they do tend to take up a lot of time and provide minimal to no value. The worst part is that most practices, if they fail on their first few tries, completely give up on the idea of a daily huddle. 

When done properly with specific goals in mind, daily huddles can boost productivity and morale. They can serve as an important performance indicator for a practice as they give insightful information about the impact of different strategies on the working and revenue production of the practice. They are meant to be short and succinct. The aim is to have the team/s aligned with the day’s goals and strategize for the day’s undertaking. 

Maintaining a checklist can help set up a huddle system that is pertinent to the practice.

Here are some of the important points that can be added to the daily huddle checklist.

  • A snapshot of the goals that must be reached and the methods for reaching them.
  • Targets that get met and how to improve them.
  • A comparison of the previous day’s actual collection against the projected collection or goal.
  • Updates and follow-ups on schedule modifications from the previous day.
  • Review of winning measures that help staff to attract more potential patients.
  • Discussion of challenges, difficulties, or confusions in the current day’s schedule and plans on how they can be sorted out.
  • Major procedures scheduled for the day.
  • New patients and special-needs patients.
  • Current day’s allotted emergency time. 
  • New and old patient’s details.
  • Necessary assistance with x-rays and other needs.
  • Discussions and confirmations of lab cases.
  • Results from post-op calls.
  • Overdue continuing care.
  • Financial information on the current day’s patients.
  • Patients that need X-rays or photos as per treatment guidelines. 

Daily huddles can benefit practices in a lot of ways. Here are some of the benefits of an effectively conducted daily huddle.

  • Helps in team collaboration and bonding
  • Prepares and inspires the team for the day
  • Can be used as a time-management tool
  • Helps identify any possible hiccups
  • Helps fend off any distractions
  • Can serve as a discussion and team interaction platform
  • Can be a platform to celebrate success

Daily huddles bring with it a variety of benefits. However, they can also become really boring and tiring, especially if there are a lot of topics being covered during one huddle. Each practice needs to prioritize and establish a system that works for them. It may take some time to create the perfect daily huddle system but in the end, it is sure to pay off.

Prioritizing “Days Sales Outstanding” To Get The Best Out Of Your Practice

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Consider a situation where you go through the entire claim cycle only to have it denied or not paid. Consider, also, instances where patient payments are significantly delayed. The time and resources used would seem to have been wasted and it would cause a strain on your practice, wouldn’t it? Now, you would have to contend with delays in receiving payments or worse, unpaid claims. Afterall, isn’t revenue the goal of your practice? Without a healthy revenue cycle, it would be next to impossible to provide the best treatment and care for your patients. How do you circumvent such a situation? We recommend using DSO.

What is DSO or days sales outstanding?

  Days sales outstanding (DSO) is an important metric which measures the average number of days it takes for a practice to collect the complete payment for services provided and is usually calculated on a monthly, yearly, or quarterly basis. The outcome of days sales outstanding is an important performance indicator to how well your practice manages its revenue cycle. Calculating DSO involves dividing the total accounts receivable for a certain period by the net credit sales. This number is then multiplied by the days in that period.

Day Sales Outstanding = (Accounts Receivable/Net Credit Sales) x Number of days

The ideal DSO for a well-managed revenue cycle is less than 45 days. A DSO of more than 90 or 120 days should be avoided as much as possible because it increases the risk of payments not being made. Maintaining a DSO that is neither too high nor too low can seem formidable but doing so can result in better cash flow.

What do the days sales outstanding do for your practice?

  • It shows the performance of your practice’s revenue cycle during a particular period.
  • It shows how quickly patients pay their payments.
  • It helps identify patients or insurance providers who are always late in paying their payments.
  • It helps you understand if you are moving in the right direction with payment collection.
  • It shows if your practice is achieving customer satisfaction.
  • It can act as an early warning sign for the management of your revenue cycle.

How can a standard DSO be maintained?

Have patient payment terms planned well

Make sure that your practice has well-planned payment terms which are neither too tight nor too loose. In general, a practice with more flexible payment terms has a larger DSO than one with extremely strict ones. Although strict payment terms can decrease DSO and increase cash flow, if the payment terms are too tight, chances are high that the customers will leave your practice and find one with loose payment terms. Having well planned patient payment terms helps in ensuring that no patients or insurance providers are at a risk of slow payment or non-payment.

Accurate claims documentation

It is of absolute importance to take the time and have your records accurate before submitting your claims. Practices in a hurry to submit claims are likely to make errors. Even minute mistakes can lead to huge losses for your practice. Any errors in it can cause claim denial or rejection, lengthening the payment process and increasing DSO. Always have accurate patient data and information. Establishing quality-check procedures prior to submitting your claims is a surefire way to reduce these errors. 

Do not overlook receivables

Overlooking receivables is a common mistake that practices tend to make. Just because your practice is making enough revenue doesn’t mean you shouldn’t pay attention to your accounts receivable. You never know how it will impact your practice in the long run. Observe and ensure that your practice gets paid for every service that it provides. Proper management of accounts receivable can help decrease the DSO.

Proper follow-up on claims

Submitting claims is not the last step to the claim cycle. Adequate follow-up is important in making sure that the claims get paid without delays. The longer it takes for the claims to be accepted, the higher the risk of claims going unpaid. In case your claims get rejected, remember to start the resubmission process as soon as possible for a faster payment cycle. A proper follow-up on claims helps your practice reduce its DSO, which makes faster reimbursements inevitable.

Stay focused and determined

Bear in mind that reducing your practice’s DSO doesn’t happen overnight. Making considerable improvements in your DSO and maintaining them overtime requires effort and, at least initially, hard work from your staff. It is, therefore, important to stick to the process and not lose focus. Setting goals and analyzing your previous DSO statistics can help in establishing a robust process, which eventually becomes a frictionless part of it.

On-time claim submission

Late submission of claims is a common reason for denials. Submitting the claims on time should be second nature to your practice, especially if you want to reduce the DSO. It could be your first step in reducing your practice’s days sales outstanding.

Partner with an RCM service vendor

Granted, reducing DSO requires some effort and diligence, which can add to the workload at your practice and for your staff. Your staff would most likely already have a lot on their plate and an increased DSO could prove fatal. This is one of the best reasons for you to partner with an RCM service provider. They provide your practice with skilled professionals who are efficient at clearing unpaid claims, submitting them on a timely basis, and helping you reduce the practice’s days sales outstanding so that your staff are left with sufficient time to focus on the practice.

Create A Great Patient Retention Strategy

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A lot of practices spend an exorbitant amount of time marketing for new patients. This seems logical as the more patients you get, the more your revenue, right? Not really. Sure, it’s great to have a lot of new patients but what is happening to the ones you already have? Are you spending sufficient time and resources on making sure that these patients are opting for your practice for their dental needs?  

The truth is that your efforts to bring in new patients will only be effective if you can successfully retain your current patients, keep them satisfied, and even happy. In this time of perpetual competition, changing insurance plans, and the intrusion of social media, it has become increasingly challenging for many practices to retain their patients. Patient loyalty is an intangible asset that leads to patient retention, and it doesn’t happen overnight. It takes time to grow and needs to be nurtured. Attracting new patients is important for the growth of your practice. However, not being able to retain these patients means that you are not gaining the full value of all your marketing strategies. Basically, the higher the patient satisfaction, the higher the patient retention, and consequently, the greater your revenue. 

Here are some of the best strategies or tips to retain your patients:

1. Focus on the best quality treatment

When it comes down to it, the quality of your dental service is what can speak volumes for your practice. Patients visit your practice to get the best treatment, and if they don’t receive quality treatment, they are sure to look for other options. Your priority, therefore, should be on providing quality treatment. Ensuring that you stay on top of new treatments and innovations in dental care will have a great impact on your patients remaining loyal to you. 

2. Provide an exceptional patient experience

Providing quality dental care may be a no-brainer but going the extra mile and providing value additions will go a long way to making a remarkable impression on your patients. Your patients have several options to choose from and it is quite easy for them to move from one practice to another. Creating a personalized dental plan, attention to detail on your patient’s preferences, initiating loyalty programs and holiday discount offers, early-bird offers, can all be catalysts for your patients to stay loyal to you. 

The ambiance that your practice provides can also have an impact on your patients. Consider upgrading your waiting area to make the ambiance feel warm and welcoming as opposed to being clinical. Simple things like providing ample parking areas can also have a huge impact on patient experience. 

Friendly, polite, and professional staff adds value to your logistical efforts. Train your staff periodically so that they are up to date on dental care and maintain professionalism even in touchy situations. Being approachable and returning phone calls on time are also aspects that your staff need to be aware of to make a positive impression on your patients. 

Additionally, you could also explore the feasibility of being accessible after hours. 

3. Establish a channel of communication with your patients

Establishing a transparent and continuous channel of communication is a crucial first step in patient retention. From registration to follow-up visits, there is a lot of information that needs to flow – back and forth – with your patients. This can include everything from giving them an idea of what to expect when they visit, the procedures they are likely to need, the patient responsibility, and right up to routines they can establish at home for better dental health. Establish your communication channels at the outset of your relationship with your patient. There may be a lot of information that a patient needs to plan out their dental care. Become a source for health-related information and help them reduce their information tracking needs. Over time, this practice will aid in gaining credence for your practice. 

4. Automate appointments, billing, and payment

One marketing strategy that can be utilized to positively influence your patients and build retention levels is to have a professional website set up. Your website can be a one-stop destination for your patients to get updated information about your services and dental know-how, book appointments and pay bills. Having an online appointment system available will allow them the flexibility of booking appointments at their convenience. 

The same goes for your billing and payment systems. An automated billing system ensures that your staff does not spend the bulk of their time working on billing for each patient’s visit and procedures. Providing multiple options for patients to make payments makes the process go faster for your patients and you. 

A Mobile app which allows for all these processes makes things go even faster and reduces the need for backend management by your staff. 

5. Reduce overbooking and wait times

Overbooking may be an accepted practice in the hospitality industry, but it may not fly well with your patients. It leaves them frustrated as dental care is a necessity rather than a source of entertainment. Planning appointments carefully while keeping in mind the procedures that your patients may need will also reduce their wait times at your clinic. Waiting for extended periods of time for a service that they have booked for can be a legitimate reason for them to feel frustrated and will reduce their favor. By respecting their time, you are making them feel valued and cherished. 

6. Address concerns upfront

Have regular surveys done to give your patients an opportunity to be honest about your services and their experience at your practice. Something as simple as setting up an automatic survey can be just the right step to receive great input from your patients for improvements. This will give your patients an opportunity to raise any concerns they may have.

Of course, having surveys and feedback mechanisms in place would be pointless if you do not address concerns or implement feedback on time. Your patients should not feel that their voices are not being heard. Connect with them once the feedback has been implemented and let them know of the changes you have made to make them feel extra special.   

Keep a check on reviews that your patients leave on review sites and social media as well. Address any concerns that they may have and thank them for leaving their feedback on these sites. 

Remember, every interaction is an opportunity, especially considering patients are walking testimonials for your practice. Your existing patients become your source for new patients.