Dental revenue: 5 factors that will make or break the cash flow of your practice

Dental revenue at your practice is what keeps your dental office operationally and financially healthy. It’s the gas in the car. It’s what pays you and your team, ensures you have great equipment, and keeps a roof over the head of the practice.

And there are several factors that may keep your dental revenue flowing or bring it to a screeching halt. 

DCS is a full-service dental billing solution. We work to help dental practices thrive and achieve financial success. Through the past 10 years of providing revenue solutions for dental teams, we’ve seen what helps and what hinders your cash flow. 

In this article, we are sharing 5 factors that affect your dental revenue cycle. When you know what is causing your revenue to fluctuate, you can easily evaluate each factor and see where you might need to adjust in order to improve your patient and insurance collections. These factors that affect your dental revenue cycle include: 

• Your billing processes
• Your in-network write-offs and courtesy adjustments
• Your patient service levels
• How (and if!) you renegotiate your in-network fees and balance your provider fees 
• Your marketing efforts 

But let’s get specific and dive in.

1. Your dental billing processes - claim submission and patient balances

This one can’t come as a surprise. Obviously, your billing processes are what keep the dental revenue cycle wheels turning. 

Each step of the dental billing process depends on the previous step. Therefore, each part of the process needs to be completed efficiently and accurately. There are two major sections of your billing process. Both are your direct sources of revenue: Insurance companies and patients. 

So let’s address each one and how they affect your dental revenue. 

How efficient is your dental insurance claim submission process?

It’s common for dental teams to be resistant to change and get stuck in their ways in how they  submit their insurance claims and have the mindset of, “this is the way we’ve always done it.”

But an efficient insurance claim submission process has a huge impact on your dental revenues. If you’re reading this and thinking, “my unpaid insurance claims are a constant source of stress” or “my insurance aging report just keeps growing because I don’t have time to dedicate to it” it’s a sign to change the way you handle claims submission. 

Have a dedicated billing expert that has a proven system in place to devote their time to your insurance claims to see your insurance revenue grow. The key here is to make sure they are a dental billing expert with an efficient system in place. 

As an owner or manager, you will need to closely oversee their progress and measure their success. Many owners and managers are not proactive and are too busy to closely watch over their employee’s progress and then become reactive when the checkbook gets low.

Related: Compare the costs of hiring an insurance coordinator vs hiring a dental billing service here. 

Consider automating your patient billing 

Automated patient billing will decrease the time and money you lose by trying to call patients about their balances. 

Collecting from patients is a challenge, but it’s crucial for your dental practice revenue. By automating your patient billing system, your team won’t have to follow up with patients about their payments and continuously explain why they owe a certain amount. It’s done automatically, and the patients will see their full breakdown in the patient billing software.

This will help make your patient billing process more efficient, leading to a better dental billing process, and resulting in increased patient revenues. 

2. Your insurance write-offs: how much do you typically write off at your practice?

The write-off is the difference between your standard fee and the in-network negotiated allowed fee. This is the amount that you will not be collecting from the insurance and the patient for the treatment you provided for the patient.  It is essential to track this lost income to ensure you are still making a profit as an in-network provider. Minimizing your insurance write-offs will help keep your practice healthy and your practice overhead manageable.

Your insurance write-offs come from lack of:

• Insurance payment (denied claims that you’ve given up on due to no time to appeal)
• In-network fee tables that are outdated or not re-negotiated
• Overutilization with DMO/CAP and Medicaid patients
• Claims that are not paid or ignored with timely filing rules hit

Reduce your write-offs by submitting accurate claims and never give up on them when working your insurance aging report. We get it, spending time on the phone with insurance trying to get a claim paid isn’t ideal, but it has to be done for the sake of your dental insurance revenue. If you don’t have time to spend on claims like this, consider outsourcing your claims process to a billing company.

Related: Write-offs at the dental office: do’s and don’ts of writing off payments

3. Your patient care and service levels - Conversations surrounding insurance and experience at the office

Your patients and their payments are the other half of your source of revenue. So how they are treated at your office is paramount to your cash flow. 

Not only do patients want to have an overall pleasant experience at your dental office, they also want no surprises with their dental bill. It is vital that your office has the time to understand the patient’s insurance plan and limitations. 

Understanding the plan is the first step in showing a high level of patient service. Patients will appreciate it if you take the time to help them understand their treatment, insurance, and financial arrangements. They need an understanding of the following:

• The cost of the treatment 
• How their insurance may contribute to their procedure
• Their estimated amount due 
• Use a printed and signed treatment plan documenting the estimated patient payment that is due at the time of treatment and the financial options you offer (credit card, financing, cash, check, etc.)

This will result in a pleasant experience for them too, creating a better, more trusting relationship with you. 

Are you taking time to inform patients about their dental insurance?

Getting paid by patients should be done by having conversations with each patient about their dental coverage before their treatment. 

This means you have already performed insurance verification, have their benefits printed out, and show them in person how much you estimate the out-of-pocket treatment may cost them, and how much insurance is estimated to cover. 

Taking the time to do this will ease the tension of collecting from your patients because the expectation is set before they receive their bill. Remember to emphasize that their out-of-pocket estimate is just that: an estimate and they are responsible for any amount the insurance may not cover.

So if their actual bill ends up being more or less, they at least were given a ballpark figure and know how their insurance coverage works. This will greatly improve their dental experience because you were honest and had the time to have a real conversation with them. 

When this happens, patients will come back and recommend you to their friends and family. New patients keep your schedule full and improve your practice revenues.

4. The balancing of your current fee and renegotiation of your in-network fees

Part of a dental leader’s annual responsibilities should be the evaluation of practice fees and in-network fees. 

Some dental professionals are under the impression that you can’t negotiate your fee schedule. That’s not true! Of course, you might hear “No” from the insurance company, but that doesn’t mean you shouldn’t try every year.

Review your in-network plan, gross production, write-offs, net production, and income generated by each plan.  

When was the last fee update you received? Contact the in-network provider relations department to re-negotiate your top 25 to 50 procedure fees or consider outsourcing a professional fee negotiator. Most in-network providers try to keep their insurance write-offs no higher than 20% to 28% depending on the practice's total overhead. 

When you’re negotiating your fees, you’re deciding what you should charge patients for treatment at your practice. This obviously affects your revenue. So come to your negotiation with facts and reports. 

Calculate the following before your negotiation: 

• Average number of new patients on the in-network plan 
• Gross production
• Insurance write-offs 
• Net collections generated by each new patient using your software reports 

Additionally, you should print your current practice's ADA/fee schedule to run a fee comparison between the full fee schedule and the proposed PPO fee schedule.

Consider an annual rebalance of your full practice fee. The in-network plans will rarely give you an increase in your fee if your fees remain low or if you bill out the reduced fee on your claim. 

Make sure your fees are balanced to the 75th to 85th percentile for General Dentists and specialists are 85th to 95th percentile. Always bill your full fee to the insurance carrier and not the reduced fees! This will help you get appropriate fee increases from your in-network plans. 

There are many places you may purchase a fee survey by zip code from and consultants to advise you on how to properly balance your fees.

Get paid what you deserve - it never hurts to ask. 

5. The marketing efforts of your dental practice

You are an oral healthcare provider, but you’re also a place of business. And every business needs a marketing strategy. 

We’re not saying you need to hire an agency or anything like that. But consider revamping your website to make it as user-friendly as possible. Post on Facebook, Instagram, and LinkedIn regularly to give people a better idea of your dental practice’s culture and values. 

Keep your Google listing updated and remember to ask your patient for a Google review. Have a QR code or link to the Google review site on the back of your business card and tell them you appreciate having them as a patient. Let them know if they have friends or family who need a dentist, and you would welcome them into the practice. Don’t forget to positively respond to reviews - whether they are positive or negative.

These marketing efforts will make a huge difference in your revenue by drawing in new patients and helping to retain your current ones.

Easy dental revenue doesn’t have to be a pipe dream – see it as a reality with RCM (revenue cycle management) services

There are many factors that affect your dental revenue. But you will take back control of your dental revenue by elevating each one of these factors. 

By optimizing your billing process, reducing your write-offs and adjustments, automating your patient billing, increasing your fees, renegotiating your in-network fees, and marketing efforts - you’ll see your dental revenue thrive. 

DCS is a dental billing friend that will help with each of these factors that affect your revenue. Our revenue cycle management services ensure you get the cash flow you deserve to provide an amazing dental experience. 

Learn more about our RCM services by scheduling a call with one of our experts.