Collections vs. Productions

[never giveup]

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I was just wondering what the difference in collections vs productions in dental offices run on percentage and how much offices tend to lose in nonpayment and having to hire collections agencies. Thanks!

 

[SeattleRDH]

It depends on whether the office requires payment up-front. Many do.

 

[eventualOMFS]

Many FFS practices do better than insurance-based, but it really depends on the practice.

Beware weird accounting practices. I've seen offices calculate collections after the insurance write-off. Example: procedure is typically billed at $1000; insurance adjusts billable amount to $875, and pays that $875. The office collections were really only 87.5% on that procedure...but I have seen some claim that the collections were 100% of the "insurance-adjusted billable amount". That doesn't mean squat, because it doesn't put any $$ in your pocket - it just makes the collections number look better.

 

[OceanDMD]

Many FFS practices do better than insurance-based, but it really depends on the practice.

Beware weird accounting practices. I've seen offices calculate collections after the insurance write-off. Example: procedure is typically billed at $1000; insurance adjusts billable amount to $875, and pays that $875. The office collections were really only 87.5% on that procedure...but I have seen some claim that the collections were 100% of the "insurance-adjusted billable amount". That doesn't mean squat, because it doesn't put any $$ in your pocket - it just makes the collections number look better.

What are you talking about? If you participate with an insurance, you charge their fee. If you collect the total thats 100% collections. The production is adjusted. Bottom line, production doesn't mean squat. Production doesn't pay the bills. 97% or better on collections is the benchmark.

 

[DrJeff]

As an EMPLOYEE you'd love to be paid based on production. As an EMPLOYER, you're generally only going to offer to pay someone based on collections. Since if the practice isn't collecting on what you're producing, what's the practice going to use for payroll??

 

[lacroix0818]

Collection is a kind of variety of products and products are the things that produce to be consumed.

 

[Edentulator]

What are you talking about? If you participate with an insurance, you charge their fee. If you collect the total thats 100% collections. The production is adjusted. Bottom line, production doesn't mean squat. Production doesn't pay the bills. 97% or better on collections is the benchmark.

This isn't true everywhere...In my area, if insurance doesn't cover the whole cost of the procedure based on the provincial fee guide, the patient is on the hook for the rest. The insurance companies don't determine the fee guide, the provincial dental association does. The only exception is for the government social service programs, which have their own set fee guide we have to follow and will basically yield almost no profit for the work done.

 

[OceanDMD]

This isn't true everywhere...In my area, if insurance doesn't cover the whole cost of the procedure based on the provincial fee guide, the patient is on the hook for the rest. The insurance companies don't determine the fee guide, the provincial dental association does. The only exception is for the government social service programs, which have their own set fee guide we have to follow and will basically yield almost no profit for the work done.

I am speaking of a PPO where you are under CONTRACT to accept the insurance plan's quoted fees. If no such contract is agreed upon, and some other "provincial dental association" determines the fees, this is something completely different. Apples to oranges. Regardless, the point of my post is collections % is based on the agreed fee (whether it be PPO or otherwise determined) and how much of THAT SAID fee is collected.

If a patient comes to my office and has a PPO plan where they can go out of network, and I do not take their PPO, they will still get reimbursement but are on the hook for MY fees.

 

[eventualOMFS]

What are you talking about? If you participate with an insurance, you charge their fee. If you collect the total thats 100% collections. The production is adjusted. Bottom line, production doesn't mean squat. Production doesn't pay the bills. 97% or better on collections is the benchmark.

I should have explained better. I'm saying that one practice was trying to get the best of both worlds...

Normal Fee: $1000
PPO-Adjusted Fee: $875
Collections: $850

You would likely state that you produced $875 and collections were 97% here. I would agree with that.

In the office that I am talking about, they called this production of $1000 and 97% collections...that fee adjustment just disappeared into thin air. This is what I'm referring to as shady. Sorry for any confusion.

 

[armydds]

I am speaking of a PPO where you are under CONTRACT to accept the insurance plan's quoted fees. If no such contract is agreed upon, and some other "provincial dental association" determines the fees, this is something completely different. Apples to oranges. Regardless, the point of my post is collections % is based on the agreed fee (whether it be PPO or otherwise determined) and how much of THAT SAID fee is collected.

If a patient comes to my office and has a PPO plan where they can go out of network, and I do not take their PPO, they will still get reimbursement but are on the hook for MY fees.

It's not unheard of people having to pay out of pocket to compensate for whatever the price you set for a procedure.

Example: Third molar extraction - your price is $300. You as the dentist and insurance company have agreed and set the price in your area based on a CONTRACT to be $250. Your price is still $300, patient pays $50 out of pocket.

 

[OceanDMD]

It's not unheard of people having to pay out of pocket to compensate for whatever the price you set for a procedure.

Example: Third molar extraction - your price is $300. You as the dentist and insurance company have agreed and set the price in your area based on a CONTRACT to be $250. Your price is still $300, patient pays $50 out of pocket.

This is out of network or traditional insurance.

Go read up on the differences between traditional insurance, PPOs, HMOs, Capitation . Specifically, what it means to be a preferred provider under contract, versus out of network.

 

[OceanDMD]

I should have explained better. I'm saying that one practice was trying to get the best of both worlds...

Normal Fee: $1000
PPO-Adjusted Fee: $875
Collections: $850

You would likely state that you produced $875 and collections were 97% here. I would agree with that.

In the office that I am talking about, they called this production of $1000 and 97% collections...that fee adjustment just disappeared into thin air. This is what I'm referring to as shady. Sorry for any confusion.

SO the office is inflating their production numbers, gotcha. We keep track of the production totals before write-offs and the actual write-off. I dont see why you wouldn't want to know how much you write off taking some of the POS insurance plans.

 

[eventualOMFS]

SO the office is inflating their production numbers, gotcha. We keep track of the production totals before write-offs and the actual write-off. I dont see why you wouldn't want to know how much you write off taking some of the POS insurance plans.

Of course you want to know all of the numbers.

My point is that you can't say "I produced $1 million and had 97% collections" if you ultimately only collected $850k. That claim implies collections of $970k.

Again, I think it's important to know all of the numbers...I was just warning the OP that, when job-hunting, claims of "we produce $x,xxx,xxx and have xx% collections" should ideally be substantiated with sound math.