To avoid Y2K cash-flow problems in the new millennium, one office no longer accepts assignment of dental claims.
Richard A. Huot, DDS
Analysts from PriceWaterhouse Coopers reported at a Wall Street Journal health-care summit that as many as 15 percent of insurance companies in the United States may have Y2K problems. Those problems could translate into denial of claims, and a serious interruption in the cash flow of your practice. Now may be the time to consider going "insurance free" by not accepting assignment on dental claims. At best, securing credit lines through your banker now is a smart way to be prepared to meet payroll and other expenses in case the checks stop coming from insurance sources at the beginning of the new year.
Over the last few years, our office staff noticed an alarming increase in reimbursement problems from insurance companies - delayed payment for no apparent reason and excessive paperwork requirements.
In July of 1998, our office decided that no longer would we accept insurance assignment, and we would direct the insurance companies to reimburse patients directly. At our May 1998 staff meeting, we plotted how we would go about doing this. First, we informed every patient coming in after June 1 of our new policy as they went to the payment counter. A sign also was prominently displayed in the reception area that, effective Jan. 1, 1999, we would no longer accept assignment of benefits. We tried to collect payment for the entire service, but explained to patients that we would collect only the copayment until Dec. 31, if they were not financially prepared for our new policy at the time of this visit.
On Jan. 2, 1999, a new sign was displayed in the reception area notifying patients that we were no longer taking insurance assignment. The effect on our production was minimal, our collections shot up, and there was a dramatic decrease in our accounts receivables. Of the approximately $12,000 left in the accounts receivables, well over half concerned insurance claims that we were still trying to get reimbursed on from November and December!
After four months on this new policy, we have not had one complaint from patients concerning delay of payment. We feel that insurance companies are going to be much more responsive when they are reimbursing the party who is paying the premium, which probably accounts for the minimal problems that occurred during this transition period. Makes you wonder why they weren`t so efficient prior to this, doesn`t it?
An added benefit is the reduction of staff hours spent on mailing and processing statements. In January 1998, our office manager had a total of 208 accounts with balances, and, after eliminating insurance-pending cases, we averaged about 100 statements per month. At the end of April 1999, our statement mailing was down to less than 40! In May 1999, we mailed a total of 24 statements.
The key link to this transition is the way it is handled by you and the staff. The following steps are vital to its success.
* Commitment from the doctor - Quite often, the biggest obstacle is you! If you have established a relationship over the years with your patients, they will not leave in droves overnight because you have changed your financial policy. Did they all leave when you insisted that they pay their insurance co-payment up front? Did they leave when you collected for all non-covered procedures at the time of services? Chances are your non-insurance patients always assumed that was your policy for all your patients.
* Commitment from the staff - The next big hurdle is to convince your staff that this will make their lives easier. The front-office personnel who handle phone calls from irate patients are your best "ambassadors" for this policy change. It is vital that all staff members are carefully informed about your policy in a staff meeting dedicated to this issue.
Put them at ease by providing articles and testimonials from other offices that have made the same move.
* Communication from your office to your patients - The most critical step is how you inform your patients of this change in policy. We do not recommend that you mail a letter to your patients. Your office will be deluged with calls, irate or otherwise, and it will hamper your front-office staff from explaining your reasoning behind this new policy in a comfortable setting. It is extremely important that everyone is "on the same page," and that your scripted responses are consistent with all staff members.
* Providing a patient-friendly way to direct reimbursement from the insurance company to your patients - Computerization of your office is a must, especially with software that is capable of instantly printing a claim form to hand to the patient on checkout. A pre-op X-ray should be provided for any procedures that may be reviewed, and supporting paperwork also should be included. We suggest that the patients bear the responsibility for mailing the form. Patients will be more likely to call the insurance company if they mailed the forms themselves, and realize that payment should have been made.
* Providing a clear way for insurance companies to be aware that you no longer are taking assignment - The simplest way to make companies aware that the patient is being reimbursed is to have a large stamp with red ink marked "Pay to the patient no assignment" made, and to use it in box number 20 on a standard ADA claim form.
Despite this, be prepared to have some checks come to your office. Your accountant is the best source as to how to endorse the payment over to your patients.
You will be pleasantly surprised and generally relieved when the implementation is completed, and your cash flow increases dramatically. Your clinical acceptance rate also will increase, since you can tell your patients what treatment is needed and that financial arrangements can be handled at the front desk. Acceptance of all major credit cards is a must, and the addition of a dental co-assignment of insurance money is a big step in positioning your practice for success in the new millennium.
Once you have overcome the initial hurdle, provided your patients and staff with a smooth and comfortable transition, and convinced yourself you have made the right decision, the benefits quickly will outweigh the minor inconveniences that will crop up along the way.