Dental Insurance Write Offs Or Not?
Dental insurance write offs are tricky. And require the dental front office team to be on their toes! As this is an area where we can easily make mistakes. For those who create the dental office financial agreements and maybe the treatment plans, this can be where the fun begins! So, before we even enter our procedure codes, there are some decisions to make. Do we want to enter our office fee in treatment plans and in posting charges? Or do we want to enter the insurance contracted rate instead?
We have choices! Which is fabulous! But it is important to take a look at how both of these can affect our daily functions. And to make informed decisions in order to avoid surprise! So, let’s take a look at how these two different fee entries affect the dental practice and specifically the dental administrative team.
Dental Insurance Write Offs or… not?
There are a couple of ways to post treatment and charges in dental software systems. I’ve been told that the most popular way to do this today, is to enter the PPO contracted fee into the patient’s treatment plan and ledger. Offices who prefer this method report that they like this method because there is less room for error. And there isn’t a write-off to calculate. The treatment plans are correctly calculated. (Although downgrades are not part of the equation and are not calculated). But insurance payments are easier to enter without the math and more accurate. Unless of course, the wrong PPO fee has been entered. Or there was an unexpected change in the patient’s insurance. Which does happen! And that’s a whole other ball game!
My Preference: Post Office Fees To Patient’s Account
Here’s why! I personally feel that the office fee should always be the fee that’s posted to patient accounts. And all that follows is strictly my preference and my belief. So, take it for what it’s worth.
- I believe the patient should always know and see what the actual office fee is. I personally don’t want patients to ever think a discounted service they receive because of a contract with their insurance is an accurate reflection of the cost of treatment.
- What if the patient’s insurance changes and we don’t update the info or fees in their treatment plan? The wrong fees post! This has to be carefully watched.
- Although the insurance claim forms can show the office fee, the patient statement and ledger will show the contracted rate. The patient statements will show the contracted rate. So, as their insurance changes, they could see different fees for the exact same procedure. And if they are talking to their relative and comparing statements, they see more confusion!
- The dental front office must be on their toes as far as having the correct codes and fee tables entered. Any cross-confusion or mistakes could be just as bad if not worse than an adjustment error. This type of error could affect patients globally rather than just on one ledger.
There’s No Right or Wrong Here!
Bottom line is that both ways are fine. Just know that both ways require attention to detail. And neither of these methods removes the chances of human error from the equation. And as long as humans are involved, there will be human error. There are a couple of ways to reduce human error. Great calculations and then monitoring adjustments are the best!
Dental Insurance Write Offs Calculator
Calculating dental insurance write offs is only complicated when we don’t fully understand them. I recently received an email from a reader who explained she was new in the field. And trying to get her head around how to estimate co-pays and write-offs. She actually had it all figured out and was doing great! And by the way.. I love hearing from you guys! Keep the emails coming!! It gives me stuff to think about and write about.. and that’s always fun!!But she found my post about calculating insurance to be confusing. And it is!
Let me try to clarify. And this time I’m going to use write-offs in my example. So, let’s go! I’m going to show you with an Excel spreadsheet. You can download this insurance calculator here. It includes some brief explanation and an example. Download a copy of this calculator and use it in your own office! Please email me if you would prefer to have this sent to you by email.
File Name: PPO-Dental-Insurance-Calculator.xlsx
The numbers inside this spreadsheet are just examples. Plug in your own numbers and watch the magic! The formulas are built into the calculator. So, as long as you plug in the right numbers, you’ll get the right totals. At least, if it all downloads correctly! But even if it doesn’t, these are simple excel formulas. And you can create these calculators for your dental office team. And then anyone can generate the numbers they are looking for in no time!
Monitor Those Write-Offs
Managers and/or dentists need to monitor dental insurance write-offs too. Well, any write offs really! When I have worked in offices that contract with PPO insurances, I create spreadsheets for each individual PPO plan. Yes.. more spreadsheets! I know.. but trust me, you want this information! And once you get it all set up, it’s done! You just have to plug in the numbers. And the good news is.. you know what’s going on and can make informed decisions!
Determine your top billed codes. The reports you need will vary on your software. But find out what reports will give you the top 25 codes at least. Then you want to list those codes and office fee schedule next to the codes. Then in the column next to those fees, list the contracted PPO fee that you have. And in the final column, what the difference is between your office fee and the contracted fee is for each of these 25 procedures. You’ll become familiar with this more and more as you look at it. Which is always a good thing!
Calculate what your average monthly write offs are. And keep an eye on this number. If it seems too high or too low, check into it! Maybe do an audit or two on an account each week or each month. Depending on what you decide. Double check to make sure write offs and adjustments are right. If something seems off, it probably is. The challenge may be in finding where and why. So, the more familiar you are with all of these numbers, the easier the problem will stand out!
Help For Your Write-Offs & Adjustments
I’m here for you! If you or your team could use some help understanding PPO write-offs, contracted rates, usual and customary fees and even adjustments, let’s schedule a time to look this together!