How Smart Dental Billing Boosts EBITDA And Practice Health

Profit doesn’t come from working harder or cramming more patients into the schedule. Real profit comes from running your billing department like a business within a business—and using it to lift EBITDA, create predictable cash flow, and make smarter decisions across the practice.

We walk through a clear definition of EBITDA and why serious owners, lenders, and buyers use it to judge operational health. Then we connect the dots between daily billing work and big-picture results: coding accuracy as revenue capture, denial management as a cost-to-collect reducer, and AR velocity as the engine of cash strength. You’ll hear why sloppy billing erodes margins from both sides—less revenue in, higher expenses out—and how a systems-first approach flips that script with cleaner claims, faster payments, and fewer reworks.

From there, we get tactical. We outline the metrics that matter—first-pass claim rate, average days in AR, denial rate by payer, write-off trends, appeal success—and how to use them to forecast collections, control overhead, and plan staffing without panic. We dig into the definition of an unreasonable denial and share a practical escalation and appeal playbook that speeds recovery while protecting productivity. Finally, we make the case for a living billing manual: documented workflows for claim submission, clearinghouse and payer receipt verification, EFT reconciliation, and standardized follow-up so the whole team moves in sync.

If you’re ready to replace checklists with outcomes and turn billing into a true profit engine, this conversation lays out the path. Subscribe, share with a fellow office leader, and leave a quick review to help more practices build healthy, sustainable profitability.

Register for the March 1st LIVE event in Riverside, CA:

www.dentalbillingdoneright.com

Click on "The New Rules of Dental Billing"

Schedule a demo with MaxAssist to unlock scheduleing potential here:

https://maxassist.com/book-a-demo-fortune-billing/

Would you like to set-up a billing consultation with Ericka? She would love the opportunity to discuss your billing questions and see how Fortune Billing Solutions may help you.

Email Ericka:
ericka@dentalbillingdoneright.com

Email Jen:

jen@dentalbillingdoneright.com

Grab the Hygiene Billing and Coding Playbook Here:

https://stan.store/hygieneunlocked

Email Ed:

ed@dentalbillingdoneright.com

Schedule a call with Ericka:

https://calendly.com/ericka-dentalbillingdoneright/30min

Perio performance formula:

(D4341+D4342+D4346+D4355+D4910)/(D4341+D4342+D4346+D4355+D4910+D1110)

Delta Dental Locum Tenens Form:

https://www1.deltadentalins.com/content/dam/ddins/en/pdf/dentists/locum-tenens-form.pdf

Chapters

• 0:00 Tough Love On Billing
• 2:05 EBITDA Defined And Why It Matters
• 3:17 Billing As Operational Strategy
• 5:10 Coding Accuracy And Revenue Capture
• 6:10 Denial Management And Cost To Collect
• 7:25 AR Velocity And Cash Flow Strength
• 7:58 Predictability, Forecasting, And Metrics
• 9:43 Manager Mindset And Outcome Leadership
• 11:34 Documented Processes And Billing Manuals
• 14:41 Defining Unreasonable Denials And Response
• 16:23 Final Challenge And Listener CTA

Transcript

SPEAKER_00: 0:54

Hey friends, it's me, Erica, host of the Dental Billing Podcast. Today we're going to get into a bit of a masterclass. If you are an office manager or a biller who has never heard the term Evida, don't worry, by the end of this episode, I am going to make sure that you understand what it means and you're going to understand why it directly impacts how you run your billing department and why I am so firm about treating your billing department like a business within a business. So before we dive in, here's a little bit of tough love. If you don't think you have a billing department and you view billing as just an admin function, I can tell you right out the gate, you are losing money. Not maybe, not sometimes. You're just losing money all the time. And more importantly, you're losing the ability to turn your billing department into a true engine of profitability for your practice. And I'm just going to reiterate, if you don't think you have a billing department, my friend, you do. So let's get into it. EBITDA stands for earnings before interest, taxes, depreciation, and amortization. At its core, EBITDA is essentially a measure of operational performance, the practice's overall performance. And it tells you how well the business itself as a whole is functioning before we layer in things like financing decisions, tax strategies, or accounting. So, in plain terms, EBITDA answers this question. How profitable is this practice based purely on how it operates? So here's why I care so much about this and why you should too. EBITDA is the language of serious business owners, lenders, and investors. It's how practices are evaluated, valued, and compared. And whether or not you ever plan to sell your practice, EBITDA still is the clearest indicator of whether your business is actually healthy or just busy. So here's where billing comes in. When you run your billing department like its own business, you directly influence EBITDA, not indirectly, directly. Let's get into that. Your billing department should not be viewed as just a clerical department. It is not reactive and it's not just about sending claims and posting checks. So those at its core, the billing department, that's the main functions, right? But your billing department sits at the intersection of what I refer to as revenue integrity, cash flow velocity, and compliance risk. Basically, in a nutshell, this is not just admin work. This is operational strategy. And I want to break that down for you. Every dollar that is correctly coded, correctly documented, correctly submitted, correctly reimbursed flows into revenue. Revenue minus operating expenses is what ultimately drives EBITDA. So essentially, friends, when billing is sloppy, passive, undertrained, EBITDA suffers. When billing is intentional, strategic, systems driven, EBITDA improves. And this is why billing is a business within a business. A real business has systems. It has performance indicators. And most importantly, it has purpose beyond getting through the day, right? Like how many of us have just gotten through the day and said, I'll get to those denials later? I've been guilty of that. But I want to talk about how billing actually impacts EBITDA in real terms. First, we're going to talk about coding accuracy. Accurate coding is not about compliance alone, it's about revenue capture. When procedures are undercoded, miscoded, or not supported by documentation, you either are leaving legitimate reimbursement on the table or inviting denials and take backs. Have you guys heard about take backs? That is a real thing with insurance companies. If we don't understand what those are, we can be victims of these takeback strategies that insurance companies use. Both of those outcomes hurt EBITDA. So, secondly, we're going to talk about denial management. Denials are not just an inconvenience. We always talk about how insurance companies use denial strategies. Yes, they do, but we also have to be proactive and not reactive as a billing department because denials cause delayed revenue. And delayed revenue increases your cost to collect. The reworking of claims is cost in productivity. And that productivity, inefficient productivity, costs the practice. Because now to rework a claim, I think the stats show to rework a claim can cost a practice anywhere from$25 up to$100. And the longer the money sits in AR, the more labor it takes to retrieve it. And it's costing the practice and productivity. That labor is an operating expense. Increasing operating expenses can compress EBITDA. And when you run a billing department without a denial strategy, without escalation time frames, and without understanding what constitutes an unreasonable denial, you are eroding EBITDA from both sides. Less revenue in and higher expenses going out. I hope that that hits home. So thirdly, I want to talk about AR velocity. Fast, clean AR improves cash flow. Strong cash flow reduces the need for lines of credit, short-term borrowing, or financial band-aids that practices face when cash flow becomes an issue. That matters because while EBITDA excludes interest, real-world decision making does not. Practices with strong AR velocity operate from strength and not stress. So here's the part that most people miss. Billing doesn't affect EBITDA through collections, it affects EBITDA through predictability. When billing is systemized, leadership can forecast revenue more accurately. These staffing decisions become smarter. We're not hiring out of panic because we have such big and big gaps in staffing right now, right? And that's a whole other episode. But overhead becomes easier to control and growth becomes intentional instead of all over the place, right? Like if you were to look at growth from some type of charting, sometimes growth can look pretty messy. But when you have systems in place, and I'm specifically talking about the billing department, friends, I'm not talking about overall operations of the practice. I'm literally just laser focusing on billing and how it is affecting our bottom line, our profitability, the practice profitability. It is so important that growth is intentional and not chaotic. So this is why I'm so adamant about billing metrics. If your billing department cannot tell you its claim rate, average days in AR, denial rate by payer, write-off trends, and appeal success rates, then it's not operating like a business. It's operating like a task list. And I know a lot of billers that operate from checklists. And I'm a checklist person. I love checklists, but you should not be running your department based off of a task or checklist. And also, task lists do not drive EBITDA. Systems don't do. Systems do. So now let's talk about the role of the office manager and the biller in this conversation. You don't need to be a CPA to understand EBITDA, but you do need to understand how your daily decisions ripple upward into the financial health of the practice. When you allow underbilling because insurance won't pay anyway, quote unquote, that mindset directly impacts EBITDA. When you don't challenge inappropriate downgrades or you allow AR to age without structure, that impacts EBITDA. And on the flip side, when you understand that billing is revenue stewardship, friends, not just claim submission, you become a strategic asset to the practice. You're no longer managing work, you're managing outcomes. And that I'm a big proponent of managers overseeing work and managing outcomes, coaching their teams to better performance as opposed to doing the work, right? I have a whole episode on dental assistant to office manager. Go back, check it out if you want to hear my perspective on office management. When you are managing outcomes, this is an elevated perspective that I want you to adopt. Practices that reach seven-figure EBITDA don't get there by accident. They don't get there by hoping insurance behaves. They get there by understanding every lever that affects profitability and pulling those levers intentionally. If there is one thing I want to make very clear, billing is one of the most powerful levers in the practice. And this is what I want to leave you with. If you're running your department, your billing department, like an admin function, you are operating your practice below its potential. But when you run your billing department like a business within a business, you don't just improve collections. You improve predictability, you improve efficiency, you improve decision making. And that is how you build a practice with healthy, sustainable IBITA. Not by working harder, not by seeing more patients, not by operating smarter. That's the shift I'm trying to impress upon you right now. An elevation. And that's why billing, when it's done right, is not just about getting paid. It's about building a real business. I want to challenge you to look at your systems currently in place in your billing department. And I want you to think through what are your workflows? What is your process around over-the-counter cash payments? Do you have a written, well-trained process that everyone follows outside of just taking the cash and handing the patient a receipt and dropping it in some drawer in the front office? Do you have a process for follow-up that everyone follows? Do we have a standardized follow-up process after we submit a claim? Do we verify that the claim has been received by the insurance company beyond the clearinghouse report? You guys know some of these clearing houses are not always accurate. It will report that the claim was sent, but it doesn't confirm that the claim was actually received by the insurance company. So you have to go double check. Do you have a process of reconciling your EFTs? And friends, when I'm talking about processes, I'm talking about processes that live outside of your head, that have been documented, that have been the team has been trained around. It is important, and this is very important for those of you that have recently purchased a practice or you're going to start your own practice and you are going to contract with PPOs and whether or not you decide to take it, go in or out of network, this is important to understand. If you are going to have a billing department, you're going to do billing because you accept insurance money, you should have a manual for your billing department that tells your biller or individual who's going to be helping you in the billing department how you do business. You should never rely on someone to tell you how to run your billing department. And it's the same deal when you start a business. You start a business with a business plan, hopefully. Hopefully, you guys do. You start a business, and when you have people working in your business, you have an employee manual. Why do we have an employee manual? Because we want to tell our employees how we do business, how we conduct business, what is acceptable here. The same situation should be happening in your billing department. And all the processes, all of the workflows, the systems that we put into play should be documented and the team should be well trained so that we're all operating from the same space. We all understand what an unreasonable denial looks like. And once we know what an unreasonable denial looks like as a company, as an office, we all know what to do next. We don't have to go ask the manager. We should understand the process. So when we identify an unreasonable denial, and by definition, an unreasonable denial is one that the benefits are available to the patient, and we submitted a strong, valid claim with sufficient evidence proving dental necessity, but it was still denied. You guys know we all receive unreasonable denials and it can be time consuming. And this is where it starts to affect IBIRA in the productivity, in the rework, right? But if we're not all on the same page about what an unreasonable denial looks like by definition, and what we're gonna do next, we are going to create chaos rather than solution. So my challenge to you is this do you have documented processes and systems in place in order to run your billing department like a business within a business? Or do you have a reactive billing department? Because whether you think you have a billing department or not, you do. And for those of you that don't believe so, I can guarantee you're losing money. So with that being said, feel free to reach out to me and let's talk about what your billing department is currently doing, the potential it has, and any billing questions that you might have. If you found this episode helpful, friends, could you do me a favor and leave me a review so that more people like you can find this podcast? I hope that this brought value to your day, and I will see you in the next episode.