Salary and commission of associate dentists.

[the2thdoctor]

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As a new dentist to the Los Angeles area (I am not a recent graduate and have many years of experience but just recently moved to Los Angeles) I have questions about dental practice production, collections, how they calculate their revenue and how they calculate the salary of their associates.

I just recently started working at a practice and was given a calculation sheet for my production payment that seems wrong on many levels. I wish to share it here and have feedback from those more experience with this than I am. Here it is:

Patients seen: 67
New patients: 6

Productions: $36,691.00
Adjustments to Production: -$17,387.00
Net Productions: $19,304.00
Amount due to PPO write-offs: $16,214.00

Collections: $13,917.10
Cash: $370.00
Check: $4,125.30
Credit Card: $9,421.80
Net Collections: $13,917.10
Insurance Plan Collections: $0.00
Regular Collections: $13,917.00

Average Production
Per Patient: $288.11
Per Hour: $254.00

Month End Collection June 2015
Gross Collections: $13,917.10
Less 9 Days x $1,500.00: $13,500.00
Net Collection: $417.10
Net Collection x 25%: $104.28

Now, first there has been a mistake on this sheet. They state above that I have already been paid 9 Days x $1,500.00 when I have only been paid 9 Days x $500.00, which is my daily base rate.

I wish to understand how they can possibly go from a production of $36,691.00 to a Net Production of only $19,304.00. What could possibly lead to Adjustments in Production totaling -$17,387.00 ? This is a reduction of almost 50%. Can anyone help me understand this ? Am I being robbed here of my rightful salary ?

Thank you in advance.

 

[OhioDMD]

Welcome to the world of adjusted gross production. It is the amount the ppo insurance company allows irregardless of the office's fee schedule. That is where the $16,214.00 ppo write off is arrived. Where the other $1173.00 (17387 - 16214) comes from is not shown.
You office may also be running a promo (like Comfort's exam & Xrays for $19) that would lead to large write offs to production.

Not being privy to your employment contract and based on the above info I'll assume you are paid 1/3 of collections up to 500 per day (which is your daily base rate) and 25% of anything above 1500 per day, averaged per pay period. That would fit the above scenario.
If that is accurate and you are paid based on collections then the information you posted is correct.

Being that you only saw patients 9 days and have $0.00 in actual collections from your patients insurance companies should indicate that you will have better collection amounts in the future ( most ins lags 30-60 days from date of submission) hence higher bonus amounts that $104.28

Given the above make sure that payments are posted properly so that you are accurately credited and try to treat more patients with less ppo write-offs to increase your salary.

 

[browncrack]

Nine days at 2K average production is not livable anywhere in the country as an associate. Unless you get a portion of a capitation check or unless you can boost your adjusted production you would be better off in public health.

 

[the2thdoctor]

Welcome to the world of adjusted gross production. It is the amount the ppo insurance company allows irregardless of the office's fee schedule. That is where the $16,214.00 ppo write off is arrived. Where the other $1173.00 (17387 - 16214) comes from is not shown.
You office may also be running a promo (like Comfort's exam & Xrays for $19) that would lead to large write offs to production.

Not being privy to your employment contract and based on the above info I'll assume you are paid 1/3 of collections up to 500 per day (which is your daily base rate) and 25% of anything above 1500 per day, averaged per pay period. That would fit the above scenario.
If that is accurate and you are paid based on collections then the information you posted is correct.

Being that you only saw patients 9 days and have $0.00 in actual collections from your patients insurance companies should indicate that you will have better collection amounts in the future ( most ins lags 30-60 days from date of submission) hence higher bonus amounts that $104.28

Given the above make sure that payments are posted properly so that you are accurately credited and try to treat more patients with less ppo write-offs to increase your salary.

Thank you for your reply, OhioDMD. Really helpful evaluation and I appreciate your help.

I've decided to wait for another month or two to see how the insurance collections will affect the overall income at the end of the month.

In regards to treating more patients with less pop write-offs, it is unfortunate but I don't have a way to control that. Patients are assigned to me and I don't get to choose the ones I see.

Thank you again for your help.

 

[the2thdoctor]

Nine days at 2K average production is not livable anywhere in the country as an associate. Unless you get a portion of a capitation check or unless you can boost your adjusted production you would be better off in public health.

Thank you for your reply, browncrack.

Why do you think that 2K average production is not livable for an associate ? In this case what do you feel should be the minimum daily average production for an associate and why ?

For some time now I have been thinking that as an associate I should get a percentage of the capitation checks. In my practice I am the one who sees all HMO patients but when I get my production report I see a lot of patients listed with a dollar amount of $0.00 assigned to their names because they are HMO patients. This is not true since the office is getting a capitation check to cover these basic treatments. Do you and other dentists you know get part of the capitation checks paid to your dental office ? What is the average amount received by a dental office in capitation checks ?

Thank you again.

 

[Hatico]

the2thdoctor,
as far as I know, associate dentists do not get anything out of capitation.

 

[browncrack]

Typically you won't get a portion of a capitation check as an associate. You can negotiate for a flat rate per visit. Collectable production of greater than 3K daily average is what I would target. Hourly wage of $20 -30 for a hygenist daily would be 240/day. For that you need 750 collectable per day. triple this for ppo. I target more than 3k daily average collectable.

 

[browncrack]

I say this because you should get paid more than a hygenist due to the differences in nature of the workproduct. Owners will treat an associate like a hygenist. If you produce no more than a hygenist then you will get paid no more than a hygenist. Your job as an associate is to make the owner money while taking care of patients. Captitation checksize depends on the size of the population taken on. These are hard to make money on unless you are the owner and can get someone to provide the care for free/little expense. Patients will refuse non-covered treatment at a high rate or will get reassigned to the senior associate for out of pocket treatment leaving you with a treatment plan but no work. Capitated production means largely nothing except a supply budget. Non-capitated production is the golden goose. Do the work, and get paid for what you do. Capitation means someone already got paid for the work you are now doing for almost free.

 

[beannaithe]

. In my practice I am the one who sees all HMO patients but when I get my production report I see a lot of patients listed with a dollar amount of $0.00 assigned to their names because they are HMO patients..

I think this is where the $17k from your original statement is coming from. HMO usually means associate work for free on procedures for them. So you effectively took a $20k write-off for your month's work between PPO and HMO adjustments. You appear to be producing ~$4k/day (not collectable, but the number is good) based off your numbers which is a decent average. I don't know whether you're getting screwed by the owner because you're getting paid a day rate, which is better than nothing. If you were making outright collections with no base on an HMO plan, you would be getting screwed. Keep this job for as long as you need it, but jump the second you find something better.