The AR Nightmare for Dental Practices is Growing. Here's How You Can Stop It.

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KaVo Kerr Team

The AR Nightmare for Dental Practices is Growing. Here's How You Can Stop It.

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One of the most crucial indications of success is collections, the gross amount of money your business brings in each year. Certainly overhead, insurance write-offs, discounts and staff salaries all play a critical role. However, the experts at SIKKA Software have been diligently watching and measuring this key metric.

Below are Sikka Software’s findings yielded from more than 13,000 practices over the last few years. As you can see, uncollected AR has grown at an alarming rate, although it did go down slightly in 2016. Is that a trend that will continue? It’s too early to tell.

Average AR per practice

  • 2011 – $85,692.16
  • 2012 -- $93,564.17
  • 2013 -- $104,780.78
  • 2014 -- $115,496.32
  • 2015 -- $124,180.70
  • 2016 -- $116,744.18

Average AR per practice above 90 days

  • 2011 -- $41,111.14
  • 2012 -- $48,579.92
  • 2013 -- $51,584.39
  • 2014 -- $52,571.54
  • 2015 -- $49,598.06
  • 2016 -- $47,736.21

Andy Cleveland, the “Dental Accounts Receivable Ninja,” says collecting at the time of service is one of the biggest ways that practices can battle their rising AR numbers.If you do not ask, you shall not receive,” Cleveland said. “Even when poorly implemented, this simple activity can move staggering amounts of bad debt down the road into your current cash column. Asking for payment is a mindset, a cultural expectation as well as a physical best practice. Your patients pay for everything else at time of service. Why do you allow your business to be excluded? It’s a choice that is always made. If you don’t make the decision and ask, the patient makes it for you and walks out without paying.”

Cleveland also said it’s important to bill patient balances consistently. Cleveland said daily is best. At a minimum, he believes it must be done on a monthly basis. “Any account on your AR depreciates daily regardless of the reason. This clock starts ticking as soon as the patient walks out the door,” Cleveland explained. “I have personally observed this alarming trend in patient billing. It’s an epidemic. Develop a protocol, a series of steps and consequences if a patient chooses to not pay and take the time to ensure these best practices are implemented systematically. If your patients are not consistently reminded and motivated, they will quickly forget and will move onto other perceived higher priority activities. Insist on having blocked times for your staff on the calendar to do this crucial activity.”

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