Let’s talk about one of the most vital signs of your practice’s health: your collections rate. Are you consistently collecting what you produce? Or does your growing Accounts Receivable (A/R) report feel like a constant source of stress, representing thousands in hard-earned revenue that’s just out of reach?
You’re not alone. Many dentists are frustrated by the gap between their production and their collections. But it doesn’t have to be that way.
This isn’t just about “trying harder” to collect money. It’s about implementing a robust, system-based blueprint. Today, we’re defining what a high collections rate truly is and breaking down the non-negotiable front office systems you must master to achieve it. This is your actionable plan to get your collections to 98% or higher and ensure the money you work so hard for actually makes it into your bank account.
Defining the Goal: What Does “Good” Look Like?
Before we build the system, we need to define the target.
- The Collections Goal: 98% of Adjusted Production. We’re not talking about gross production. Your adjusted production is your total production minus necessary insurance write-offs. This is the amount you genuinely expect to collect, and your goal should be to capture at least 98% of it. The only gap should come from rare instances where an insurance claim is unexpectedly denied and you’re unable to collect the full balance from the patient.
- The A/R Goal: Less Than 50% of One Month’s Average Collections. A high collections rate can sometimes mask poor back-end systems if your A/R is simultaneously ballooning. A healthy A/R should be well under one month’s average collections. Hitting under the 50% mark is the gold standard we should all be striving for.
The Foundation: Ironclad Financial Policies
Achieving these goals starts with your front-end policies. The ideal practice operates on two simple principles:
- Pre-collect for major treatment.
- Collect at the time of service for everything else.
My preferred method for pre-collection is to tie it to chair time. You can explain it to patients this way: “Anytime we reserve an hour or more of the doctor’s time specifically for you, our policy is to handle the financial arrangements beforehand. This allows us to focus entirely on your care on the day of your appointment.”
While offering in-house payment plans can sometimes increase case acceptance, be aware that it makes hitting that 98% collections target incredibly difficult. The moment you become the bank, your A/R will grow and your collections percentage will likely fall.
Ready to build an elite collections system? Watch the full breakdown here.
The Engine: 4 Non-Negotiable Back-End Systems
With strong front-end policies in place, your success hinges on the consistent execution of your back-end systems. This is where most practices fail.
1. Daily Insurance Billing
This is basic but essential. Claims must be submitted within 24 hours of the procedure. Every single day, a team member must be responsible for checking the rejected claims report from your clearinghouse, fixing errors, and resubmitting them immediately.
2. EOB Posting (Within One Week—MAX)
This is the single most critical trigger in your collections cycle. The Explanation of Benefits (EOB) is where you discover what insurance actually paid. If your EOB posting is lagging, your entire collections process is delayed. This is a non-negotiable rule: EOBs must be posted within one week of receipt. The moment an EOB is posted and a patient balance is revealed, that account enters Day One of the patient billing cycle.
3. Weekly Patient Billing Cycles
The moment a patient balance exists, the clock starts.
- Day One: The patient receives their first statement. Today, this is best sent as a text or email with a convenient payment link. Pro Tip: Include a short, personalized note explaining the balance (e.g., “Hi Mrs. Jones, looks like your insurance covered a little less than we estimated. This is your remaining portion.”). This small touch prevents confusion and frustration.
- Weekly Statements: Do not wait a month. Every week, your team should run a report of patient accounts with balances over 30 days old and contact them again. After 90 days of consistent communication, the account must be escalated to a more serious collections status.
4. Disciplined Insurance Aging
This is the most common failure point in dental offices because it’s tedious work. You must be disciplined.
- Work the 30-Day Report: At the beginning of each month, your team should actively work the report of all unpaid claims aged 30 days or more.
- Proactive Patient Communication: If a claim is denied and you are resubmitting it with doubt about its success, give the patient a heads-up. A simple call to let them know they might be responsible for the balance if insurance denies it again softens the blow and improves your chances of collecting later.
- Have a Hard Cutoff: At some point (90 or 120 days), you must stop chasing the insurance company. If a claim is definitively denied, zero out the insurance portion, transfer the full balance to the patient, and immediately move them into Day One of your patient billing cycle. The faster you do this, the higher your chances of getting paid.
The Owner’s Role
If you, the owner, consistently implement and inspect these systems—pre-collecting, daily billing, prompt EOB posting, and disciplined weekly patient and insurance follow-up—you will achieve elite-level collections. But the moment you stop paying attention, these systems will begin to falter, and your bottom line will suffer.
Take an honest look at your practice. Where are the cracks in your collections system?
