Outcome 3 - Manage Financial Aspect

Question 1

What is accounts receivables in the dental office?

Answer 1

AR management is a crucial aspect of financial operations in a dental office. It involves tracking and managing the money patients owe the practice for services provided.

Question 2

Two main type sof Accounts Receivable bookkeeping systems in dental offices:

Answer 2

1. Manual Peg Board System
2. Computerized System

Question 3

What is the AR Manual Pegboard System?

Answer 3

This traditional method uses physical pegboards, cards, and ledgers to tract AR. Each patient’s account is represented by a card containing details of treatments, charges, payments, and balances. The pegboard is updated manually with each transaction, and accounts are reconciled periodically.

Question 4

What is the AR Computerized System?

Answer 4

In modern dental offices, computerized practice management software is the preferred choice for managing accounts receivable. This software allows for the electronic recording, tracking, and managing of patient accounts. It offers automated billing, electronic claims submissions, payment processing and customizable reports.

Question 5

What are the Advantages of Computerized Systems?

Answer 5

Efficiency - streamline processes, reducing the time and efford required for billing, invoicing, reconciliations

Accuracy - less prone to errors and inconsistencies than manual systems

Integration - can integrate with other systems and modules, such as scheduling, patient records, and billing creating a seamless workfow

Reporting - generates detailed reports and analytics, providing insights into practice finances, patient trends & revenue performance.

Question 6

What does Accounts Receivable mean?

Answer 6

The total amount owed to the dental practice, calculated by tallying the production, treatments provided, and payments received.

Question 7

What is Bookkeeping?

Answer 7

The process of recording financial transactions.

Question 8

What is Accounting?

Answer 8

Involves recording, categorizing, and summarizing financial and business records.

Question 9

What is the Balance?

Answer 9

The amount of credit or debit on an account.

Question 10

What are Charge Slips?

Answer 10

Documents used in the pegboard system to convey financial information between treatment rooms and the business office. Each slip details the treatments provided to a patient and their current account balance

Question 11

What is the Daily Journal Page?

Answer 11

A component of the pegboard system serving as the practice’s daily record of patients seen. It includes patient names, charges, payments, and adjustments.

Question 12

What is a Credit Balance?

Answer 12

An amount owed to the patient, often occuring when the dentist is paid in advance before treatment.

Question 13

What does Non-sufficient Funds (NSF) mean?

Answer 13

When a check is returned due to insufficient funds in the account.

Question 14

What are Receipts/Walkout Statements?

Answer 14

Reciepts confirm payment received for treatment on the same day, while walk out statements also display the current account balance.

Question 15

What is Daily Proof of Posting?

Answer 15

A day-end procedure ensuring all patient visits are accurately recorded and charged by comparing transactions in the daily journal with the appointment book.

Question 16

What does Professional Courtesy entail?

Answer 16

A discount extended to patients as determined by the dentist.

Question 17

What are Bank Deposits?

Answer 17

Itemized memos detailing cash and check payments to be deposited into the practice’s bank account.

Question 18

What are Monthly Statements?

Answer 18

Financial records are generated monthly and sent to patients, outlining their account balances and requesting payment.

Question 19

How are patient accounts organized?

Answer 19

By the resposible party, who agress to cover account expenses. Records track transactions and maintain current balances for statements, insurance claims, and collections.

Question 20

Advantages of Immediate Payment?

Answer 20

Patients pay in full during each visit enhances cash flow and reduces adminstrative costs. Cash, checks, and credit cards are accepted.

Question 21

What is required with cheque payments?

Answer 21

Identification is required

Question 22

What do Credit card payments require?

Answer 22

Credit cards are prefered by most but require a merchant account with associated fees. Charges are managed separately from daily deposits.

Question 23

What are Digital Wallets?

Answer 23

A secure, electronic payment method, linking bank accounts to smartphone apps for transactions.

Question 24

What is the Accounts Receivable Report?

Answer 24

This report provides an overview of outstanding balances on patient accounts and categorizes them based on the age of the debt. It helps track overdue accounts and guides collection efforts

Question 25

What Collection Efforts can be used?

Answer 25

Must be conducted tactfully, respecting patient goodwill and legal guidelines. Specifc actions, such as contacting debtors at inconvenient hours or using threatening language, are prohibited.

Question 26

Guidelines for Collection Telephone Calls?

Answer 26

Telephone calls can effectively collect debts as they provide direct contact with the debtor. Before making the call, it’s crucial to only speak to the responsible party and to have all relevant information, such as the exact amount owed and the payment due date.

During the call, it’s essential to remain calm and professional, even in the face of hostility or anger from the debtor. Any agreements made over the phone should be documented in the patient’s account ledger, and follow-up actions should be taken if promises are not kept.

Effetive collection management requires dillgence, communication skills, and adherence to legal guidelines to ensure the practice’s financial stability while maintaining patient relationship.s

Question 27

Who makes the final decision on turning accounts over for collections?

Answer 27

The dentist must make the final approval. The account is never turned over without it.

Question 28

Final Collection Options?

Answer 28

Collection agency
Small claims court
Collection follow-through

Question 29

What is a Collection Agency?

Answer 29

A collection agency makes additional efforts to collect the balance on an overdue account. The agency’s charge is a percentage of the amount collected and deducted before the balance is remitted to the dental office. Some attorneys also attempt to collect overdue accounts in exchange for a percentage of the amount collected.

Question 30

Small Claims Court for Debt collection

Answer 30

Another option is to take the debtor to small claims court. Sometimes, arrangements are made so that the business assistant, not the dentist, appears for the hearing. One drawback to seeking a small claims court judgement is that even if the court rules that the debtor must pay, it is stilll up to the practice to collect the amount of the judgement.

Question 31

What is Collection Follow-Through?

Answer 31

A sample collection follow-through timetable to be used to collect money is as follows..

30 days: regular statement, which is sent at the end of the month, is send within 30 days or on completion of treatment, with financial arrangements printed on the statement

60 days: 2nd statment, with a kindly printed collection message or a telephone call

75 days: Another telephone call and an amiable collection letter were mailed

90 days: a third statement with a stronger note or collection letter; often, this letter states that unless payment is made within ten days, the account will be turned over to a collection agency for action.

105 days: Another telephone call; in this call, the message could be “Unless the account is paid by the specified date, it will be necessary to turn the account over to a collection agency for action.”

120 days: if no payment has been made and promises have not been kept, the account is turned over to a collection agency for action.

Question 32

What are Expenses?

Answer 32

These are costs associated with running the dental practice and are often referred to as overhead. Examples include rent or mortgage, utilities, insurance premiums, and salaries.

Question 33

What are Disbursements?

Answer 33

These are payments made for expenses incurred by the practice, turning them into accounts payable.

Question 34

What is Fixed Overhead?

Answer 34

Consists of business expenses that remain constant, such as rent or mortage, utilities, insurance premiums, and salaries.

Question 35

What is Variable Overhead?

Answer 35

Includes expenses that fluctuate, such as dental and business supplies, fees for independent contractors, laboratory fees, and equipment repair costs.

Question 36

What is Gross Income?

Answer 36

The total professional income received by the dental practice.

Question 37

What is Net Income?

Answer 37

The gross income minus all practice-related expenses.

Question 38

What is the Role of a Certified Public Accountant? CPA

Answer 38

CPAs are often retained to handle major financial records, including annual profit and loss statements, tax returns, and government reports.

Question 39

Payment of Accounts

Answer 39

-Monthly disbursements involve sending payments to suppliers
-Cash on Delivery requires payment at the time of delivery
-Petty cash is used for small expenses

Question 40

What is a Commercial Carrier / Dental Insurance Company?

Answer 40

A profit-making organization that contracts with groups to offer dental plans.

Question 41

Who is the Insured / Beneficiary / Policy Holder / Subscriber?

Answer 41

The employee receiving dental coverage through their employer.

Question 42

Who is the Dependent?

Answer 42

The spouse and/or children of the insured.

Question 43

What is an Eligible Individual?

Answer 43

A person entitled to benefits under a dental plan.

Question 44

Who is the Claimant?

Answer 44

The person filling a claim for benefits, whether the policy holder or a dependent.

Question 45

What is a Premium?

Answer 45

The cost charged by the insurance company for dental coverage.

Question 46

What is the Effective Date?

Answer 46

The start date when insurance benefits become active.

Question 47

What is the Contract Year?

Answer 47

The 52-week period the insurance contract covers.

Question 48

What is the Deductible Amount?

Answer 48

The initial amount the insured must pay before dental benefits start, which can be a one-time or yearly fee.

Question 49

What are Approved Services?

Answer 49

Dental treatments are covered under the plan.

Question 50

What is Co-Payment / Patient Portion?

Answer 50

The portion of treatment costs the patient must pay after insurance coverage (e.g. with 80% coverage, the co-payment is 20%)

Question 51

What is Maximum Benefit?

Answer 51

The highest amount the plan pays towards dental treatment over a specified period.

Question 52

What are Exclusions?

Answer 52

Dental services not covered under the plan, such as treatments for pre-exisiting conditions.

Question 53

What are Limitations?

Answer 53

Restrictions on benefits for certain dental services, like the Least Expensive Alternative Treatment (LEAT) rule.

Question 54

What is Certificate of Eligibility?

Answer 54

Official proof of coverage required for treatments under government-sponspoed fixed-fee plans.