The Top 4 DSO Struggles of 2019

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Recent changes in the dental industry created opportunities for large dental organizations to emerge. As we work with large groups and dental service organizations, or DSOs, there are trends and common challenges emerging as well. Identifying and solving these problems ensures the long-term health and wealth of the organization. There are four key challenge areas.

1. Acquisition of practices with differing philosophies, systems, and protocols (or lack thereof). Change is always difficult. Whenever anyone does a job in an established way for any length of time, even minor alteration to the routine can be disruptive. Imagine having to do everything at work differently, starting today, with the added uncertainty of your employment status on top of that! Such a paradigm shift can be overwhelming. Common reactions from staff include defensiveness, dramatic reductions in productivity, and outright rebellion, all of which can make retention of personnel difficult and make a challenging transition even more problematic. Buyers don’t want to lose manpower, so they try to change as little as possible. On the clinical side, the dentist can supervise the clinical team; while there may be some adjustment required in this arena, dentistry and dental hygiene are what they are so the impact on staff is likely to be relatively minimal (still a challenge!) when compared to that of administrative staff. It is here where the real challenge lies. Supervising and directly evaluating a whole new team and individual members is difficult.

Take the dental biller or front desk staff, for example. If a claim is not on file because the demographics were incorrect, intake by the front desk was incorrect. If more information was needed, the biller did not send complete documentation, processing is held up and payment is delayed. If you didn’t call the insurance in the first place and do not know a claim is held up, lack of follow-up means accounts receivable gets farther behind and cash flow is held hostage. By implementing metrics specific to administration performance by dividing the job into daily tasks based on workload, this can be streamlined, measured, and monitored. What is needed is a live feed of metrics that can be viewed by management, at a bird’s eye view, of all the offices and accounts receivable management. Outliers can be easily identified, and the issues zoned in on, followed with solutions and corrective actions.

Dental billing is divided into five main components:

a. Benefits verification and setup of insurance in your system

b. Clearance of daily electronic claims submission and rejection

c. Claims management and follow-up from the weekly claims AR report

d. Regular, daily EOB and EFT entry as checks come in and EFTs are deposited

e. Patient balances managed from weekly AR report

Daily work on these areas with proper monitoring in larger organizations helps management identify the workload and establish goals for completion, then gauge progress. Each of these areas is again subdivided by productivity reporting. No business operates without regular, documented determinations of whether or not routine tasks are accomplished; in dentistry we need to monitor not only the clinical team, but the administrative team, in detail.  For example: the daily e-claims are subdivided into: amount successfully sent, amount rejected and corrected, amount rejected could not be corrected. Each of these numbers tells a story of someone’s performance.

Another example is reporting on the unresolved claims research during claims management. The claim management can be subdivided into specific categories:

  • claim not on file demographics are correct (tells you that there is electronic claim service issue) or claim not on file demographics where incorrect (this tells you that the front office intake of information is inadequate),
  • claim on file requesting more information (tells you that whoever is submitting claims is not submitting attachments and/or enough supporting documentation), and
  • claim paid but EOB not entered (tells you that the office is behind in EOB entry and therefore if the claim is still unresolved patient balances will be also behind as you do not normally send a statement unless the claim is resolved.

2. Growth happens faster than manpower and talent that can handle within the revenue cycle. There is a dearth of skilled dental billers in the industry due to lack of professional schooling and incomplete training by predecessors on the job. Admittedly, there has been a lot of change in the industry as well, so anyone caught between changes in the needed skillset will be behind from the get-go, but habitual mistakes, incomplete knowledge, and work ethic issues are passed on if not nipped in the bud. Building a solid revenue cycle team is, by itself, enough of a challenge. Building a team further as new practices are acquired is much more difficult. If a DSO promises to be the financial watchdog of practices but struggles within the revenue cycle as an individual practice might, the scale of the problem is larger. Statistically, human error accounts for 5% of business revenue loss. When a practice handles $100,000 that’s $5,000, but if the DSO grosses $10 million, that’s a whopping $500,000 loss. Typically, Fortune 500 companies hold regular motivational seminars to build up their manpower. DSOs are novices at this kind of large-scale thinking and should adopt the practices of successful big businesses, especially when it comes to manpower morale and enthusiasm. A good example is the Everything Counts series of books and seminars by Gary Ryan Blair.

It is unfortunate that some organizations have millions in accounts receivable. The fact is that 50% of that AR is guaranteed insurance money, since the insurances are under contract to pay if you send a clean claim in a timely manner. The dental industry complains about their AR problems are caused by insurance companies, however, that is not entirely true. When you sign a contract with insurance companies, you agree to the given fees, therefore, you can build a successful financial business plan knowing the allowable fees. The issue is that this money is not paid by insurance when it is produced clinically, because of manpower not because the insurance would not pay it. The dental insurances play delay tactics, that is true, but for the most part if you follow the benefits verification plan outline of frequencies, maximums, and exclusions, you know up front what to expect and what you will get paid on. Again, your team may chose not to follow the benefits verification plan they verified and can create claim denial and a bill for the patient. Large groups HAVE to standardize operations and create live monitoring of tasks performed by the administration team. Email here for more statistics. 

3. Lack of a sound ‘franchise model,’ including universal billing systems and protocols. As practices are acquired, often there are no templates, systems, and protocols for the team to follow. When these are simply adopted from previous owners and carried into the new organization, there is disparity between the general operations of different practice locations. It is very difficult to manage people that are individually making daily decisions—often the wrong ones—which have a profound financial impact on the DSO.

For example, one practice collects nothing at time of service, while the second one does, and the third collects only on larger procedures. Another practice follows the estimated portion from benefits verification, while the first does not do benefits verification at all. For a supervisor or manager of several locations this is a disaster waiting to happen. Another example is one practice sends claims daily, another does it twice per week. One practice knows the rejections report and works it diligently, while the other one has never seen it before, so those claims go to no-man’s land and are not on file when you follow up.

An overall, streamlined and clearly defined dental billing system must be adopted by the entire organization and implemented at each individual practice. One issue is that many people are just learning the mechanics and fundamentals of dental billing. As dentists, we were never taught that in school. However, there is training available.

By adopting and maintaining a systematic approach, including detailed tasks broken down (similar to that of a franchise) which will occur in every office owned by the DSO, we create a clear standard. It can be trained systematically, measured, and modified when industry conditions make it necessary. For example, we will verify benefits three days prior to the appointment. This includes running eligibility checks and performing a full breakdown by calling insurance on new patients, emergency patients, and patients that changed insurances. The sheet will be scanned to a patient’s digital chart and we will use this information to create our estimations per appointment and collect whatever amount we establish to be collected in the agreement at time of service. We will send electronic claims daily and clear all rejections prior to leaving for the day; if the insurance is not an electronic payor, we will fax the claim and avoid mailing at all costs. Snail mailed claims get eaten by the mail goblin—at least that is what the insurance company says.

4. Networking and IT setup for practice management is cumbersome, with weak tracking and analytics overall. The dental industry is still lacking good dental practice management software that is set up for large practices. Some are making headway but have a real problem with operations that have various independent contractors and multiple tax IDs used under one license. Also, in general, we are lacking the live integration with dental insurances similar to the medical insurance model. There are a few companies attempting this but we are years away. This would help with paid claims EOB entry and accounting patients ledgers for claims paid, as well as denials or requests for additional information. It would be amazing to have this information integrated right in the dental software and not third parties that require the team to remember to look for this information.

The alternative that is adopted is that various individual software from each location are networked into one server that is tapped into by the revenue cycle. This is a work-around rather than a permanent solution, and connectivity problems cause a decrease in productivity and increase in IT cost. When dental billers have to log in and get kicked out ten times per day due to the network setup, delays cause a disruption of focus and loss of time, as IT has to work on the systems to reinstate connectivity repeatedly.

Overall, there are a lot of issues one must deal with when building a large group practice or DSO management group. As an industry, we are still learning, and in some areas we lag behind woefully, but there is a lot one can do to minimize disruption and build a reliable, lucrative, successful practice network.

Written by Dr. Dorothy Kassab. Dr. Kassab is a practicing dentist in Syracuse, NY; a graduate of the Suny Buffalo Dental School. She is the President, and CEO of Dental Claims Cleanup, LLC. Her team will take your accounts receivable and move it right into your bank account! For years Medical Practices have contracted with third party firms to handle their billing, insurance, and accounts receivable. This third party system permits your highly trained staff to concentrate on patients and quality of care while efficiently managing your dental practice. With today’s social media reviews, your practice can’t afford costly negative remarks. The fact is that your team might be wonderfully skilled but they don’t have time to chase insurance and patients for payments. The other fact is the accounts receivable needs to be worked consistently. Most dental practices do not have the manpower to stay on top of the ever-rising accounts receivable. This, in turn, leaves the Dentist owner unpaid. There are many reasons why A/R gets out of control. Dr. Kassab’s series of Live CE webinars will train your staff and implement systems correctly to avoid costly mistakes and depreciated accounts receivable in the future.

Dr. Dorothy Kassab’s contact information:
Dental Claims Cleanup
1810 Erie Blvd
Syracuse, NY 13210
800-652-3431
www.dentalclaimscleanup.com

 

 


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