Financial Management, Dental Insurance, and Skills Marketing Flashcards
Accounts receivable
several systems are available to assist a dental practice in managing finances, including an accounts receivable system.
Accounts receivable is used to manage all money owed to the practice for professional services. Types of accounts receivable systems include:
Pegboard accounting : example of a pegbord day sheet with individual section noted. The document labeled “B” is an illustration of a black patient ledger card that would be used when completing the day sheet.
Computerized accounting: computerized accounts receivable management system.
Financial Management Tasks
Financial management of the office is the responsibility of the entire practice. A dental practice is a business. The dental assistant needs to know accounting practices, fees, and the responsibilities of payment and collection. These skills make the dental assistant a valuable asset to the management of a practice. The business assistant is responsible for maintaining complete, accurate, and up-to-date records, including the following:
- Financial records for billing and collection procedures
- Financial planning
- Declarations of money earned to federal and state agencies Two aspects of financial management are accounting and bookkeeping. The business assistant may also be asked to complete the tasks here:
- Ask the patient to complete a registration form that will include the patient’s address, telephone numbers, place of employment, responsible party, and insurance provider
- Obtain a patient’s credit report, which details the financial profile of the patient
- Present the patient with fee information when services are rendered
- Make financial arrangements detailing how the patient will pay for services, including a contract for payment plans, if necessary
- Manage different sources of data
Accounts Receivable Elements
The format for accounts receivable includes various iteams:
Charge Slips: Change slips are used to transmit the financial information between the treatment area and business office.
Daily Journal Page: The daily journal page is a record of all transactions for the patients seen each day. It includes the name of each patient, the charges, the payments received, and any adjustments to the account.
Walkout Statement: A walkout statement is similar to a receipt but includes not only the payment made, but the remaning account balance as well.
Patient Account Records
The financial account for patients should include the name of the responsible party and payment information, including the following:
- Methods of payment (cash, check, credit card, insurance)
- Details od the payment, such as whether services were paid for in full or are being paid for in installments
- How much of the payment was covered by dental insurance
End-of-Day Tasks
End-of- Day tasks include daily proof of posting and bank deposits.
At the end of each day, listings on the daily journal page are compared with the appointment book to be certain that all patient visits have been entered. In addition, the total amount of money recorded for receipts is compared to the total amount of money actually received to ensure the two figures match. If the numbers do not match, the mistake can be caught early and addressed immediately.
Bank Deposits
Bank deposits should be made once per day. The amount of the receipts should match the amount of the deposits. The deposit slip is an itemized list of the cash and checks taken to the bank to be credited to the practice’s account. The slip must bear the practice name, address, and account number.
It’s also important that the bank deposit slip follow specific guidelines, such as the following:
-Must be legible
-Must list the total amount of cash being deposited in a single entry
- Must list checks separately
Collections
The accounts receivable report shows the total balance due on each account, plus an analysis on the age of the account. This report helps manage collection efforts. All collection efforts must be handled tactfully.
The Fair Debt Collection Practice Act outlines a variety of illegal activities, including the following:
1: Telephoning the debtor at inconvenient hours
2: Threatening violence or using obscene language
3: Using false pretenses to get information
4: Contacting the debtor’s employer, except to verity emlpoyment or residence
Collection follow through
efforts to collect overdue payments should progress according to a specific timetable.
When placing a collection call, you should follow certain protocols, including following:
- specks only to the person responsible for the account
- never leave message that could be misundertood, reveal confidential information, or be considered damaging.
30 days: A statement including financial arrangements is send.
60 days: A second statement is send, accompanied by kind, printed collection message or a telephone call.
75 days: Another telephone call is made and an amiable collection letter is send.
90 days: A third statment is send with stronger collection letter, nothing that the account will be turned over to collection agency for actions.
105 days: A telephone call is made stating, unless the account is paid by a specified data, the account will be tured over to collection agency for action.
120 days: The account is turned over to the collection agency.
expenses and income
Accounts payable includes money that is owed by the practice, expenses, and overhead that represents the actual cost of doing business. Types of overhead include fixed overhead and variable overhead. Fixed overhead refers to business expenses that are constant over time, such as rent or mortgage, utilities, insurance, and salary. Variable overhead refers to expenses that occur irregularly, such as dental and business supplies, independent contractor fees, lab fees, and equipment repair fees.
Income includes both gross income and net income. Gross income is the total of all professional income received. Net income is the gross income minus all practice-related expenses.
Disbursements are payments of bills. Major expenses are paid by check. Minor expenses can be paid with petty cash. Either way, it’s important that the practice keep records of all bills paid.
When the practice receives a shipment, the package includes a packing slip. An invoice for the shipment is usually sent separately. Regular suppliers also send monthly statements. The practice must carefully check shipments to make sure they contain the items on the packing slip. Invoices should be checked to make sure they are correct and then should be paid promptly. Monthly statements must be compared to invoices and payments to check for accuracy.
Considerations when ordering supplies
special circumstance need to taken into account when ordering supplies. Consider these situation
-Back order: back ordered supplies are not immediately available for delivery with the order.
-Ordr exchange, return, or replaced due to a variety of factors. Sometime orders come n incorrectly or are damaged.
Dental supply budget
The dental office supply budget must be considered part of inventory management and allow for the purchase of various items and equipment
Consumable supplies: supplies that are used up as part of their function. For example paper procduct and printer ink is used up daily.
Disposables: items that are used once and then discarded. Gloves and masks are used up during patient care.
Expendable items: materilas of relatively low cost that are used in a short time. IT is importnat to distinguish between expendable and nonecpendable items because there are tax consequences for each . the dental office accountant will establish clear cut categories for all items.
Nonexpendable items: smaller pieces of equipment or instruments that will eventually be replaced.
Major equipment: larger and movre expensive pieced of equipment.
Paying accounts
Accounts can be paid in monthly disbursements or twice-a-month disbursements. Before checks are sent to suppliers, the charges should be verified and the dentist should approve payment.
Some shipments require cash on delivery (COD); in other words, payment is due at the time of delivery. Dental offices usually set aside petty cash to reimburse employees for small expenses.
The business assistant also needs to be familiar with check terminology, such as the following:
* Check: A draft, or an order, on a specific bank account for payment
- Payee: The person named on the check as the intended recipient
- Maker: The one from whose account the amount of the check will be withdrawn
- Check register: A record of all checks issued and deposits made to the account
- Nonsufficient Funds (NSF): A check that is returned to the payee because not enough money is in the checking account
Payroll
When processing payroll, keep in mind that complete and accurate employee records must be kept at all times. A separate payroll sheet should be maintained for each employee. This sheet must have the employee’s full name, Social Security number, address, and number of income tax exemptions claimed.
Each employee’s total, or gross earnings must be determined. Certain payroll deductions are then subtracted from those gross earnings, including the following:
- Income tax withholding, including state and federal
- Federal Insurance Contributions Act (FICA), which is also known as Social Security
- Health-or life-insurance coverage
- Contributions to a personal savings plan
- Contributions to a pretax retirement plan After all deductions are subtracted from gross income, the result is called “net” pay. Payroll is calculated as Gross Income - Deductions = Net Pay
Dental Insurance
Dental Insurance is a plan that provides a patient with financial assistance toward the cost of dental care. A person can obtain insurance in two ways:
- From the patient’s or spouse’s employer a a benefit through a group plan
- As an individual
Dental plans involve a number of parties, including the following:
- Patient/subscriber: The person receiving the treatment
- Group: The union or employment organization that has negotiated dental insurance as part of it’s benefits package
- Carrier: The insurance company that pays the claims and collects the premiums
- Provider: The dentist who renders treatment to the patient
Insurance Benefits
Insurance companies vary in how they calculate payments for dental services. However, some common payment methods exist:
- Usual, customary and reasonable (UCR) fees
- Schedule of benefits: A list of benefits available under an insurance plan (not related to the dentist’s actual fee schedule)
- Fixed fee: An established fee for any treatment received by the patient
With regard to the schedule of benefits, The patient usually is responsible for paying the difference between the amount paid by the insurance carrier and the amount the dentist actually charges for the service. The insurance carrier’s schedule of benefits is a list of fixed specified amounts it will pay toward the cost of a covered service.
With regard to fixed fees, the dentist must accept the amount paid by the carrier as payment in full and might not bill the patient for the difference.
