Outsourcing Dental Billing: A Strategic Move for Profitability?

Dr. James V. Anderson

Dentists should consider outsourcing typical office tasks to increase productivity and cash flow. The perception of having to pay for an outside service when it should come from within the practice is an outdated myth worth busting. Studies show that outsourcing can decrease total accounts receivable by 75% in less than a year. If you follow the money in your dental practice(s) to the profit and loss reports, you will find the number of total adjustments made to your accounts and wonder where did that money go?

Insurance adjustments or write-offs due to PPO contracts is an area few dentists understand and chalk up as necessary losses. Dental business team members need more time to negotiate PPO fee raises which will increase cash flow. If the team cares for the patients, they don’t have the patience, the hours, or the expertise to accurately manage the revenue recovery for their practice(s). Misinformation abounds on how to make correct adjustments or if an adjustment is necessary; hence the easiest way is to write it off.

Do your deep dive and look into it carefully. From experience, typically, you are writing off or adjusting off monies that, by all rights, should be in your bank account. The varying dental software programs produce reports that can demonstrate these figures. Data entry skills can alter these figures significantly, enough to hurt you seriously; data entry must be done consistently and correctly. Outsourcing to an expert team helps your team learn the best data entry and report management practices.

Most of us need assistance with making changes, even if they are for improvement. We often feel secure in the “old ways” because we know what to expect. Change your expectations!

The following compares the pros and cons of outsourcing to help you decide what is best for your practice situation.

The pros of outsourcing your dental billing:

1. Increase income/decrease expenses
   By speeding up the payment process by sending daily clean claims and accurately posting insurance payments to patients' accounts. Depending on the billing company, outsourcings have proven to decrease their expenses by 35%.
2. Increase cash flow
   By ensuring accountability for decreased accounts receivables. A dedicated team of billers should provide a practice revenue report as you need it, whether daily, weekly, or monthly.
3. Fraud prevention with another set of eyes on the posting and accounts.
4. Ensures that “clean claims” are submitted daily, resulting in quicker claims payment.
5. Increase time for patient interaction at the desk. Outsourced teams do the insurance verification and claim appeals and sit on the phone for hours to clear a claim so that your lines are not tied up with insurance outbound calls. The internet, dental software, and HIPAA-compliant VPN connections offer remote work options without disrupting the flow of patients through the office.
6. Lower labor costs
   Ensures claims and accounts will be worked during staff vacations and staff turnover. According to Indeed.com, an in-house insurance coordinator makes an average of $39,000 annually. Outsourced dental billers are usually paid from a percentage of collected dollars, much less than hiring a full-time insurance coordinator.
7. Lower hiring and training costs
   Outsourced billing teams are thoroughly vetted for their knowledge of your dental software program, insurance documentation, and coding skills before being assigned to your practice.
8. Increase time with patients and other administrative duties
   Outsourcing behind-the-scenes administrative tasks allows for more time to discuss treatment and build relationships with patients. Increase management time by transferring the unpaid accounts receivable to your outsourced billing team
9. Ensure compliance with coding
   Coding correctly has evolved into a powerful system for all dental practices. Outsourced dental claims billers are vetted to the latest CDT codes and proper documentation of claims and have the training to spot any issues in the misuse of codes. Adequate knowledge of coding and administration, particularly related to PPO contract provisions, allows an outsourced dental billing team to meet your goals efficiently and effectively.
10. Improved time to explain treatment to patients and obtain informed consent. According to the ADA:
    “Informed consent cannot be considered legally compliant if it has not included a dentist-patient conversation. While it’s acceptable to have a clinical staff member discuss treatment options and risks, the informed consent process requires that the dentist thoroughly discusses that information with the patient.”
    Due to time constraints, informed consent is often not obtained or obtained incorrectly in many practices.

The cons of outsourcing dental billing

1. There is a risk that the outsourcing company will be all talk and no action. For some, the proof will not be there when they said it would be.
2. May lead to reduced accountability for poor collection results/blame game of who is responsible.
3. Some dental billers may be less experienced than presented by the company. Some don’t know as much as the dental office personnel.
4. Poor communication and no personal daily face-to-face interaction with the team. Some dental billers are described as "ghosts" because they do not contact the practice team.
5. The dentist or management views the outsourced billing as something other than a permanent solution to their cash flow problems. Some offices may still believe that the office manager or other team members should perform insurance billing.

In summary: The impact on practice profitability:

In my opinion, the pros outnumber the cons. I truly believe that outsourcing dental billing may be what you are looking for to increase your profits and decrease your expenses. Additionally, the cons can be eliminated by communicating with your outsourcing company any concerns or complaints that you have so that changes can take place.

It's choosing the right company that will meet your practice's and your team's unique needs. Choose a company that has a positive track record for doing what they say they will do. Choose a company with thousands of happy clients and verifiable numbers to support their claims.

Today is the time to move your practice strategically toward profitability while lowering your stress and bringing you peace of mind.