Articles By Fred

“Is it a good idea to have an associate work in my practice for a time before selling the practice?”

When a dental practice creates enough demand from patients for more doctor hours, it’s a good idea to think about what direction to take regarding the future of the practice. In one sense, referring out treatment to specialists that the doctor doesn’t enjoy providing makes room for patients who are committed to the treatment the doctor enjoys. On the other hand, bringing on another doctor to fulfill the unmet demand for dentistry can help the practice grow and ultimately position a new doctor for a partnership or transition.

It’s very important here to note that the practice must sustain enough demand for dentistry for two doctors; it isn’t enough to suggest that just “bringing on an associate” is a good idea when there isn’t enough business to keep one doctor busy every day.

From the associate’s perspective, working in a dental office as an employee or independent contractor is necessary in order to earn a living as it may not be feasible, for whatever reason, to purchase a practice right away. As it is with the employer, making sure there is enough demand to fill a full-time schedule for all parties involved is the key. Often times, an associate dentist is introduced to the practice when the demand does not justify a full-time position. The result is a disappointed associate who may not stay and seek work elsewhere.

Another point of view is that of a dentist who may wish to work in a practice before making a decision about purchasing. On the surface, this seems to be a reasonable request, but what are the benefits to the owner or the buyer, and what are the risks?

From the buyer’s point of view, he or she would prefer to become knowledgeable about the day to day operations of the practice, how patients who frequent the practice are treated, and business systems and philosophy of the practice, to see if these characteristics match his or her ideals. In addition, the buyer may wish to learn if he or she is like-minded with the employees working in the office. The buyer may also wish to learn about the range of procedures performed in the practice and whether or not he or she is capable of keeping up with the pace of the owner who is more often than not more experienced and skilled. Finally, the buyer may want to know if he or she is matched well to the socioeconomic profile of the patients of record.

On the other hand, the seller may want to learn more about the personality of the buyer and determine if he or she can manage the practice. A question in the seller’s mind may be, “Can this buyer generate the production and resulting income necessary to meet the current expenses and the debt required to purchase the practice?” It’s also a good idea for the seller before the sale to train the buyer on the unique characteristics and business systems of the practice to help assure the quality of services delivered in the past continues.

Both points of view are important to each party in a practice purchase or sale, however, the risks are much greater for the owner and may have a significant negative impact upon the practice value. For example:

1. Patients and staff may be unnerved by the sudden arrival, and departure, of the associate dentist, and some patients may even choose to go elsewhere as a result.
   1. With a specialty practice, the referring doctors may abandon ship and begin to refer to other specialists due to the change in practitioner.
2. The owner is required to explain to patients, or referring sources, that he or she will be resuming the care of the patients in the practice. This in most cases results in a loss of income while the owner and staff are burdened with the task of damage control - explaining the short-term change of practitioner.
3. The owner may have reduced income hours while feeding patients to the buyer to form the impression that the practice is busy. In uncertain economic times, decreased patient flow can only be spread around so much.
4. Marketing and introductions of the new associate dentist may have to be retracted, causing more suspicions or questions from the community of patients and / or referring doctors.

It may be necessary to consider such a transition plan when, for example, a specialty practice located in a remote area has few other buyers to seriously consider purchasing the practice. All this being said, working as an associate to buy-in is not recommended for the aforementioned reasons; the risks are too great to the seller.

“I feel as if my team is well-versed in patient payment arrangements, but I know we could do better. Sometimes, patients aren’t clear about how they can pay for dental services and that they have options available to them that may help them move ahead with needed treatment without creating a financial burden. What would you suggest to make sure we are ensuring a high case acceptance rate and getting paid for services?”

Great question; and of course a timely inquiry in these economic times. Patients are looking carefully at the value they receive for their dollars spent; in any place – dental office, clothing store, auto dealership, etc.

In my experiences recently while working with dental offices, the issue about patient payment for services continues to be a relevant topic. Most dental team members understand the fundamentals of a good patient payment system, and in most cases they do a fine job of getting patients to pay.

Once in a while, I come across an office that boasts excellent statistics on patient payment; but something’s wrong. The office isn’t growing, patients are not accepting treatment, and the doctor and team are frustrated. This occurred recently in a client’s office where the office was solid, but case acceptance was down, production was down, and cash flow was thin. Looking deeper into the situation, I found a payment system that had done okay, but was missing a few key elements. Once in place, case acceptance picked up, the practice was productive once more, and cash flow was beginning to roll all over again.

So what was the deal? The office had become too strict on payment arrangements, they were not using a written financial policy that once was in place and had served the practice well, and the team had lost the edge with their verbal skills.

Back to the drawing board? Maybe not.

Throw the baby out with the bath water? Not yet.

Get back to basics? Yes, now we’re talking!

If it hasn’t been done recently, re-visit the patient payment process in your practice. The key here is to make sure all the resources you have available are being used with great communication skills so that patients will say “Yes!” to treatment and money doesn’t get in the way.

Dental patients across the country are service savvy. They want to be sure their investment in healthcare provides them with the benefits of good oral health: looking good, feeling good, having strong teeth and gums, and enjoying their natural teeth for a lifetime.

Imagine for a moment how many hours of continuing education was logged during 2008 that covered clinical care, treatment methods, and materials? Now, how many hours were recorded on business related courses regarding communication skills and systems development for patient payment arrangements?

Often overlooked is the need to keep up with the changing marketplace regarding payment. It’s not a surprise to me that, on occasion, some offices lose the edge and their mainstay systems such as patient payment arrangements may begin to hinder practice growth.

Studies conducted in practices recently show a similar pattern than in years past: dental consumers continue to pay for approximately one half of all dental treatment out of their own pockets.

In today’s economic climate, unless patients know their options to pay for services, they may choose not to go ahead with treatment. In fact, sensible payment options and good communication skills will help the patient make informed decisions that will lead to enhanced case acceptance. Moreover, if you haven’t re-visited your payment options during the last year, your payment systems may not be sensible in these days and times.

Back to Basics!
Three simple ground rules will help your practice cope with these changing times. Follow, or re-visit if the case may be, these rules diligently; make them the foundation upon which you build your payment systems. In this way, you can experience payment success in your practice.
Ground Rule #1: “Discuss Fees Prior to Treatment.” Patients should be informed of all fees, and specific arrangements should be made for payment before any treatment begins.

Ground Rule #2: “Don’t be a bank.” When patients are allowed to pay for their care over an extended period of time, you are actually loaning them money! And, you run the risk of alienating a patient; they may not return to the office knowing they owe money and haven’t been diligent about paying.

Ground Rule #3: “We will provide a variety of payment options.” “Not paying” is not one of them!. It is a reality that, while people generally want the best possible care, they often need some form of financing. The best way to solve this problem, without breaking Ground Rule #2, is to provide a variety of payment options for your patients.

What kinds of payment methods are available? Of course it’s preferred to have payment in full for services rendered. But for those hard to manage situations, here are some back-up methods.

Offer a cash courtesy for treatment paid for in advance. This is a great way for patients to save money, and a way for the practice to secure payment. An added benefit to the practice is patients tend to keep appointments for which they have already paid! Be mindful however, of insurance contracts that require proper documentation of discounts or courtesies.

Make better use of major credit cards as a payment option. One approach, which could be used more, is the process of spreading payments out over time using a signature on file for credit cards. There are forms available that provide structure to this system. But exceptional presentation skills must be used with this payment option. Consider this type of language when presenting credit card debiting:

“We have a great way for you to handle payment for your treatment. So that you don’t have to pay for the services all at once, you can make payments over time, interest free. All we need is your permission to debit your credit card once a month for an amount we agree upon and only for the amount of services provided. That way, you can have the dental treatment needed to get well, and you can make payments over time. Which credit card would work better for you, MasterCard, VISA, American Express, or Discover?”

Offer this to patients who have established themselves in the practice and have a track record of timely payment and attendance; that is, people who regularly pay well and keep their appointments.

In all cases, it is important to make sure your patients know you accept payment by credit card, and they can make payments over time with their credit card. Tell them! Don’t rely on a sign at the front desk or a note on the billing statement. Use good old face-to-face communication.

Use a dedicated healthcare financing company for patients in need of financing. Here, you receive payment up front, and the patient can make low monthly payments. A definite win-win for the patient and the practice. Again, make sure the verbal communication skills are at the forefront. Please, use words that highlight the benefits the patient will receive when using an outside finance company; such as:

“We have a wonderful way for you to handle payment for your dental care. The good news is, you don’t have to pay for your treatment all at once, you can make payments over time, and it’s interest free!”

It’s strongly advised, in either of the case of credit card debiting or using an outside finance company, to inform the patient of what their monthly payment will be. For example,

“We can split that up into four payments of $750 each. Which credit card would work for you, MasterCard, VISA, American Express, or Discover?”

And,

“If you use the six-month interest free option, your monthly payment will be $250 per month. When would you like to get started with your treatment?”

Here’s where a simple, straightforward, one page written financial policy which explains the various payment methods you have elected to accept in the practice comes in to play. With this tool, describe the various payment methods in a positive manner, and be sure to describe the benefit the patient receive under each option:

“We’re very excited about helping you get well and become as dentally healthy as possible. We have a variety of payment options to choose from, let’s go over them and you can decide which would be best for you.

You may handle payment by pre-paying for services; we offer a pre-payment courtesy of 5% when payment is made before treatment begins; your savings would be $500.

Or, you may choose to use a major credit card, we accept MasterCard, VISA, American Express, or Discover.

For our patients, upon approved credit, may be able to make payments over time, interest free, for up to six, 12, even 24 months.

Which of these payment options would work best for you?”

Use these recommendations (and the Written Financial Policy I have included) to build payment systems that work for your patients. Work on the verbal communication skills mentioned here as times have changed. Dental offices must re-visit systems in the practice regularly to make sure the system is serving the practice; especially during changing economic times. In the final analysis, patients deserve the very best care you can deliver, and you deserve to be paid!

We realize that every person’s financial situation is different. For this reason we have worked hard to provide a variety of payment options to help you receive the dental care needed to enjoy a healthy and confident smile with respect to your budget.

DENTAL INSURANCE:

We are happy to file the forms necessary to see that you receive the full benefits of your coverage; however we can make no guarantee of any estimated coverage. Because the insurance policy is an agreement between you and the insurance company, we ask that all patients be directly responsible for all charges. Please know that we will do everything possible to see that you receive the full benefits of your policy. If for some reason your insurance company has not paid their portion within 60 days from the date of treatment, you are responsible for payment at that time.

PAYMENT OPTIONS:

Cash or Check
We are happy to offer a pre-payment courtesy for all treatment paid in full prior to treatment.

Credit Cards
For your convenience we have made arrangements to accept payment by MasterCard, VISA, American Express, and Discover.

Payment Plans
Creditworthy patients who have extended treatment may be eligible for financing. We will work closely with you to customize a plan to suit your needs.

Our goal with each of our patients is to help them enjoy the benefits of good oral health. With proper care, they may be able to have strong teeth and gums, a healthy and attractive smile, and keep their own natural teeth all their life.

“I read the article by Erin Raden in Inscriptions, “Dental Practice Act Summary of Changes” in September 2008. From what I understand, if I provide a discount or fee reduction as a courtesy or promotion, I might need to change the way I submit insurance claims when I’m contracted with an insurance company as a participating provider. What is your take, and your recommendation?”

First, let’s get the disclaimer out of the way: I am not an attorney, and any information provided in this article is not meant to deliver legal advice.

>>WHEW<< Glad that’s done! Now, down to business.

I’m very familiar with the article, and thanks Erin for bringing these changes to our attention. Sad truth is that most dentists aren’t as familiar as they should be with the laws governing the profession. Since her article was written, I’ve casually surveyed dentists as recently as early March at the Western Regional Dental Convention and found that an overwhelming majority was surprised to know about the changes. Specifically, Section 191 Definitions, regarding “Irregularities in Billing”; take a look from Erin’s Summary (I’ve underlined some of the words for reference later in this article):

“Irregularities in Billing” defines the submitting of any claim, bills, or government assistance claim to any patient, responsible party, or third party payor for dental services rendered that is materially false with the intent to receive unearned income and as evidenced by any of the following:

• (a) Charges for services not rendered.
• (b) Any treatment date that does not accurately reflect the date when the service and procedures were actually completed.
• (c) Any description of a dental service or procedure that does not actually reflect the actual work completed.
• (d) Any charge for a service or procedure that cannot be clinically justified or determined to be necessary.
• (e) Any statement that is material to the claim and that the licensee knows is false or misleading.
• (f) An abrogation of the co-payment provisions of a dental insurance contract by a waiver of all or part of the co-payment from the patient if this results in an excessive or fraudulent charge to a third party or if the waiver is used as an enticement to receive dental services from that provider. This subdivision does not interfere with the contractual relationship between a third party payor and a licensee or a business entity registered with the board.

These changes to the Dental Practice Act regarding “Irregularities in Billing” impact Arizona dentists in several ways, and I’d like to point out a few that are important when it comes to advertising, discounts, and abrogating, or forgiving, the co-payment. As I indicated in the first part of this article with words that were underlined and in bold print, one cannot submit an insurance claim that is materially false with the intent to fraudulently receive unearned income.

The first few sub-paragraphs, (a) through (e) are specific enough so as not to be confusing, I trust. Just a quick example will help shed light on the subject matter of these first few items.

A patient arrives at the office in mid-December with four upper anterior teeth that are to be treated with full coverage crowns. Due to the yearly maximum benefit, the patient may ask that the dentist restore two teeth prior to the first of the year, and the other two after the first of the year. The dentist may recommend that in order to match the teeth with the proper shade and provide the best possible treatment, all four teeth should be restored at the same time. Treatment proceeds, all four teeth are prepared, and in an attempt to help the patient financially, the treatment for two teeth are billed to the insurance company at the preparation date prior to the end of the year, and the treatment for the other two teeth are billed on the seat date after the first of the year.

This is an obvious billing irregularity, as the insurance claim forms submitted do not reflect the treatment provided and the fees charged on the dates of service.

Now, let’s deal with the real meaty stuff in sub-paragraph (f). “Abrogating”, or waiving, all or part of the co-payment while under contract with an insurance company, and submitting a materially false claim with the intent to fraudulently receive unearned income will get a dentist into trouble.

Delta Dental of Arizona provides examples of non-compliance with their Participating Dentist Agreement to be:

• Misrepresentation of dates of service, services performed or fees changed on a claim form submitted to Delta Dental
• Misrepresentation of usual, customary and reasonable prefiled or charged fees on a confidential fee listing form
• Waiver of part of all of applicable contract copayments and deductibles
• Discounting of fees – agreeing to schedules lower than the dentist’s filed fees with Delta
• Dental (submitting full fees on claims to Delta Dental)
• Other activities involving claim forms or fee data which results in inaccurate information being submitted to Delta Dental which can cause actual or potential detriment to Delta Dental or a Delta Dental subscriber

Delta goes on to further inform dentists that they must indicate any discounts given to the patient clearly on the face of the claim form or in the notes field of the electronic claim. The discount must be applied so that the net fee submitted to Delta and the net fee charged to the patient are both reduced. The dentist may offer patients discount coupons for services or procedures. However, the claims submitted must reflect the discounted fees. Regularly offering discounts or coupons can affect the usual fee. Failure to disclose discounts or the use of coupons is one of the unacceptable billing practices reviewed during the claim verification process. Failure to disclose discounts or coupons can result in overpayments that are recoverable. If a claim form is intentionally submitted without disclosed discounts or coupon use, it can be considered a fraudulent attempt to gain overpayment of benefits.

An example given by Delta Dental on how to disclose patient discounts on claim forms is this:

Suppose your usual fee for a complete maxillary denture is $1000, but you offer a patient a $100 discount. There are two ways to indicate the discount on the claim form. You must use one of the following:

1. State the discounted amount of $900 in the box 31 fee section.
2. State your usual fee of $1000 in the box 31 fee section and use the Remarks Section to identify the discount amount of $100.

The Arizona Department of Insurance was a great resource of information regarding these issues and Insurance Fraud. Yes, Insurance Fraud is a crime, a class six felony that can mean 10 years in jail and a maximum fine of $150,000.

A person who commits either of the following “with the intent to injure, defraud, or deceive an insurance company,” is guilty of a felony. The most common types of insurance fraud include claim fraud, premium fraud, and vender (or provider) fraud. Incomplete or inaccurate information on a claim form or application does not necessarily represent insurance fraud. For insurance fraud to exist, four key elements need to be present:

1. Intent to defraud: The person(s) must intentionally and deliberately deceive the insurer(s).
2. Knowledge: The person(s) must have knowledge that what they are doing is wrong, or is a false statement of fact.
3. Misrepresentation: The person(s) creates or assists in making a false impression that leads the insurer to pay a claim.
4. Reliance: The insurer would not have paid the claim but for the misrepresentation.

Let’s jump back into the day-to-day operations of the dental office. Here are three examples to show what this all means:

Example #1: Pre-Payment Courtesy or Discount
My proven payment program, “Proactive Payment Systems” routinely recommends a pre-payment courtesy, or discount, for payment made in advance on major treatment. Let’s consider a patient who accepts treatment for several units of crown and bridge that total $3000. A pre-payment courtesy of 5% would provide $150 in savings to the patient if paid for in advance. Once the treatment is provided, normally, the insurance claim form is generated electronically with little effort and sent to the insurance company for payment. But Wait! You’re a Delta Dental contracted provider! Was that claim submitted to Delta Dental with the proper notation and fees regarding the discount? If you are to provide a discount as in this example to your patients, as a Delta Dental Provider, the claim must be submitted with notes indicating the discount provided; easy fix!

Example #2: {Direct Mail Piece} “New Patient Exam, Bite-Wing X-rays, and Examination - $49. Regular value, $155!”
(Note: There is no indication on the advertising piece that this is only available for cash paying patients; insurance patients are not specifically excluded.)

In this example, yes you are a Delta Dental provider, the patient arrives at the office for their new patient visit, and yes, they have Delta Dental insurance. The fee of $49 is paid, and the insurance claim form is submitted. OOPS! Was the claim submitted with the proper notation and fees regarding the discount?

Example #3: Professional Courtesy
In this example, you are not a contracted participating provider with any insurance company and a friend of yours, Bill, arrives at the office for his new patient examination, complete x-rays, and since Bill is healthy without any signs of periodontal disease, he has his teeth cleaned. For whatever reason, you elect to provide Bill a Professional Courtesy by reducing the fee $35 from the usual $235 to an even $200. Bill pays by credit card, bids you farewell, and off he goes. Are you in compliance? Yes. You provided services, charged a fee, and you received payment. The contract in this case is with the insurance company and the employer or patient, not the dentist. You are not obligated to submit a claim form; you may as a courtesy to Bill, and in fact would enter your usual fee for services rendered on the claim. Since you are not contracted with the insurance company, you may process payment from Bill and submit the claim normally. If you accept assignment of benefits, process the claim according to your normal and correct billing procedures.

A heartfelt dentist can have the patient’s best interest in mind, and on occasion, be pulled by their purse strings, yet acts of kindness could cause the practice to falter without knowledge of the laws that govern the profession.

If you contractually participate with an insurance company, read the contract! If you can’t find the contract in your office, call the Provider Relations contact at the insurance company, request your signed copy, and start a file. The ADA provides, as a member service, Contract Analysis. Contact AzDA here in Arizona for more information.

What is very important to note is that waiving or abrogating the co-payment is a non-issue if a dentist does not contractually participate with any insurance company. Yes, they must follow proper billing protocols; that goes without saying. But discounts, professional courtesies, are all in line when a dentist is not under contract.

Staying on top of everything that occurs in a dental practice’s day-to-day operations is time consuming. Fulfilling the professional responsibility to keep abreast of the legal parameters of the profession, unfortunately, is not always accomplished. By that I mean dentists stay current on procedures, materials, and techniques to keep patients in the highest level of oral health. As a result, the business side of dentistry often suffers. In that respect, dentists may not be aware of changes to the laws that govern their profession. From my experience, it’s not intentional, it just happens – for whatever reason.

Further, the Arizona Board of Dental Examiners, in particular Dr. Sam Palmer, indicated to me that an overwhelming majority, well over 95%, of complaints from people to the Board about dentists is not treatment based per se, but communications based; people don’t feel like they were taken care of properly as a person. Yes, this includes the ways in which billing and account administration is handled. The treatment provided is often not the basis of the initial complaint.

Generally speaking, most dentists and their staff do an excellent job of taking care of people, healing their dental conditions, billing properly, and creating a loyal following of patients in the community that refer other people for care. Some dentists are not as competent in their profession at taking care of people, and for this reason the laws are established to protect the public from harm.

Be proactive by staying in tune and be aware of changes to the laws that govern the dental profession. Make your team aware of the ways that could put the practice in harms way by incorrectly billing when contractually participating with an insurance company.

For more information, go to www.azleg.state.az.us/arizonarevisedstatutes.asp.