Built to Get Paid Series - The Foundation (Part One)

Your billing should not feel like a surprise every month. When collections swing up and down, it’s rarely because “insurance is just hard” it’s usually because the foundation was never built correctly. I walk through the core projects I use to make dental billing predictable, measurable, and strong enough to support growth, not just survive the next slow week. 

We start where the money actually begins: UCR fee positioning. I explain why raising fees by a random percentage can backfire, how NDAS market percentile data helps you choose an intentional fee strategy, and how Fair Health can help you spot check codes using real claims trends. From there, we move into employer research so you stop signing PPO contracts based on guesswork and start aligning with the plans your patient base truly carries. Then we do the math most offices skip: fee schedule analysis that compares reimbursements to UCR and shows your real write off risk by procedure. 

Next, I zoom out into business model strategy: traditional in network PPO, a hybrid out of network approach with key plans, and the realities of fee for service based on local demographics and discretionary income. To make all this usable, I share how to build a billing command center, clean up practice management setup with clear write off and adjustment categories, and tighten procedure mapping and coding structure so compliance and revenue meet in the middle. If you want your dental revenue cycle to run on data instead of stress, hit play, then subscribe, share this with your office manager, and leave a review so more practices can build billing that actually gets paid.

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Perio performance formula:

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Transcript

Predictable Billing Starts With Structure

SPEAKER_00 1:10

Hi friends, welcome back to another episode of the Dental Billing Podcast. If you are new here, welcome. And if you are a longtime listener, thank you from the bottom of my heart for the support that you've shown this podcast. Today I want to start this episode by saying something I think you really need to sit with. I am a firm believer that if you want your billing to be predictable, you have to treat your billing department like a business within a business, not something you look at when collections feels off a business. Because when you treat it like a business, you start operating differently. You start looking at the data instead of going off of that feeling. You start seeing patterns instead of reacting to slow collections. And you start making decisions based on numbers, not noise. But here's the truth: when you pick up on patterns a lot faster because you're looking at the data, the business is just going to feel stronger. Every business, every single business, is only as strong as its foundation. So if your filling feels a little unpredictable right now, or if your numbers feel like a surprise every month, it's not because insurance is difficult. It's because something in your foundation was either never built or it was built wrong. So today we're going to slow this all the way down and walk through what the foundation actually looks like, at least according to my framework. And I'm going to warn you, this is not light work. This is where real decisions are being made. And everything I'm about to walk you through, I want you to start thinking of as a project, because there's nothing about billing that is a task. Everything is a project, not something you squeeze in between patients. I really, it really irks me when I hear someone say something like, I'm a multitasker. I check patients in, I do billing, I post the payments, I work on AR. But the reality is our brains were not made to multitask. What you're actually doing is switch tasking, and you're probably making errors that you wouldn't have made had you not been able to just sit and focus on the billing. It always makes my spidey senses go off. And I'm almost positive if I looked at AR for an individual who is a one-woman show or one-man show, there's going to be a mess in the AR. Because even though you are able to, capable of working that AR and reducing it to healthy numbers, you're not able to if you're multitasking, because working AR requires focus. Creating claims requires focus. Hosting payments, friends, that really requires focus. It all requires your undivided attention if you want your billing to feel predictable. So I'm going to warn you right now, some of or all of what we're going to talk about is probably something you need to address within your billing department. As I mentioned in last week's episode, which was the introduction to this series, Built to Get Paid, we are going to go through the six pillars of our billing department framework. And this framework has been implemented in hundreds of dental practices all over the United States. This is not theory, this is the actual process. And as much as I would love to get into all of the things in each pillar, I'm going to get into the major projects that we go through with our clients. And I hope that this either confirms that you set your billing department up properly or encourages you to maybe redo it. So, with that being said, we are going to start with project number one. We start with your UCR fee. And I'm going to be direct here. Most of you have no idea where your fee actually sits in your market. You may think that you do, but a lot of you don't. You either set your fees when you opened your practice and never touch them again, or you increase them every year based on a percentage that feels reasonable. And I hear this all the time. We increase our fees 3 to 5% every year. My question to you is based on what? Because if that increase is not tied to real market data, you're either underpricing yourself or you're creating a gap that shows up in your write-offs. This is where EndOS comes in. Endos stands for National Dentist Advisory Service. EndoS is not a guessing tool. EndoS is pulling actual provider fee data within your GeoZip code and breaking it down into percentiles. So now you can see where the 50th percentile is, the 70th, and now you can make an intentional decision where your practice sits. Do you want to be average? Do you want to be above ad above average? Where do you want to position yourself? That decision should be tied to your business model, not a random increase. Now let's connect this to something that most of you are feeling, but not measuring. Talking about your write-offs. A healthy, well-structured practice should not be writing off more than 40% of their properly positioned UCR fee. Okay, let that sit with you for a second. We start with positioning your UCR fees first so that now we can measure our write-off percentages. We don't want to measure our write-off percentage before we know that our UCR fee is in the 80th percentile for your geographical zip code. But I'm gonna be honest with you, most of you, because I've done this for hundreds of offices, most of you are writing off closer to 60% of your very low UCR fee. So initially, when I take a look at a practices billing department, I will pull the suggested 80th percentile based on EndOS. And then I will pull your UCR fee and usually, and then I will, and then I will calculate the write-off percentage. And the write-off percentage with a UCR fee that is in the 30th percentile for that zip code is gonna get worse. It's gonna go down even further when we position our UCR fees to the suggested 80th percentile. So do you see where I'm going? Your write-offs need to be calculated after you know that your UCR fee is in the proper percentile for your zip code. And you have normalized not understanding this. I think a lot of practice owners have accepted it as just being a part of the network, whatever PPO network that is. But it's not just the network fee being low, it's your fee setup that was never set up properly. Your UCR fee is too low, your write-off percentages will always look worse. And if it is not aligned with your market, your entire financial structure is off because you didn't take the time to do the research. And this research has to happen annually, friend. Will go up or the percentiles will change, and that could mean that you you do need to increase your fees maybe 5%, but you don't want to guess. You don't want to do that based on a feeling, you want to do that based on data. So there is another tool besides EndOS that I do use as well, and that is called Fair Health. But I use Fair Health, Fair Health differently. Fair Health aggregates claims data from insurance carriers. So it shows what is being billed and reimbursed in your area. It's helpful for spot checking a fee. Say there's a procedure that is not listed on a fee schedule. I will go to Fair Health to get an idea of what the fee should be for that procedure. It's again helpful for spot checking, but it's not the same as End DOS. EndOS is where I build my strategy, and Fair Health is where I go to spot check a code here and there. Let's move into project number two, what I consider one of the most critical and skipped steps when one is starting a practice. And you would think that this wouldn't be related to setting up your billing department, but it is one of the most critical, in my opinion. And that is gonna be employer research. And I want to say this clearly: this step is everything to your practice. Everything. And most doctors don't do it. Not because they're chi, not and not because they don't care, but because they don't realize how critical it is. And they just start signing contracts. What we do instead is we ask who are the largest employers in this area? Not who do we think and not who we've heard of. Who actually employs the people that are going to sit in our chairs? Then we ask, what insurance are those employers offering? Because that is your patient base. That is where your market is. So let me ask you a real question. What good is going in network with Delta Premier if nobody in your area, the large employers, are offering Delta Premier? It doesn't matter how great the fee schedule looks if there's no volume attached to it. It does nothing for you. So this is where Google and now ChatGPT become a very important part of our process in the research that we do in understanding the large employers closest to our practice. So for some of you that are in saturated markets, you're in a metropolitan city, that could be a large amount of large employers like the Home Depot, Target, Costco, you know, all of these large employers and understanding and aligning your practice with what insurance they are offering to their employees. Now, when you do this step, you got to get it dialed in. So we're gonna research large employers, then we're gonna find out what they're offering. It's okay to pick up the phone and call HR and talk to someone in the benefits department. They want people, they want offices to be reaching out to them so that they can send their employees to your practice. So we're gonna reach out, we're gonna find out what plan is being offered, but also within that plan, which ones specifically are they offering? Because as you know, Delta has Premier, PPO, DPO. What if we think it's Delta Premier, but most employers are offering Delta PPO? And it's that's an example. Cigna has different plans within their within their wheelhouse, right? So not only do you want to find out which insurance company those large employers are offering, but you also want to find out which plan they're offering, right? And then you want to align yourself. Contract if you decide to go in network, then you can align yourself with the right plan so that these patients, these potentially new patients can find you. So don't just go based on the highest fee schedule. I see a lot of doctors that do that, dentists that do that, and they end up on the losing end of that because what good is going in network with a plan that is not being offered in your area? So those are the steps that you're gonna take. And you can keep track of all of this on a spreadsheet. I do have a spreadsheet that we use, and it helps to keep this project on track. Now, project number three is fee schedule analysis. Now we got to do the math. So once we know which plans actually matter, now we can pull the fee schedules. And this is where we slow down and do the math that most practices never do. We look at what are you getting paid for your top procedures? What is your potential write-off percentage for each one? And how does this compare to your UCR fee? Because this is where decisions should be made, not when you're frustrated about how little you get paid for a crown. This is where we use data that's right in front of you to make the best decision as far as participation status goes, right? Like, are we gonna participate with this network or not? Project number four is business model strategy. Now, this is where we zoom out because all of this feeds into one bigger question. And that is what kind of practice are you building? And I'm going to walk you through the three models we evaluate. Model A is the traditional PPO in network PPO practice. This is the most traditional model. You go in network, you get exposure, you get volume, but you are accepting lower reimbursement. And here's the part that nobody talks about enough. Some of these networks are easy to get into and very difficult to get out of. So once you're in, you're locked in. Model B is the hybrid model. And this is my favorite model for most practices. And I'll explain what I mean by most practices in a second. This is where strategy really comes in. You stay out of network with most plans, but you stay in network with key players like Delta or Blue Cross Blue Shield. You still accept insurance, you still submit claims, and now you're able to balance bill to your UCR fee. Now, let me clean something up for you. Being out of network does not mean you can do whatever you want. If you are depositing insurance dollars into your bank account, you are still bound by state and federal guidelines. The only difference is you are no longer restricted to the contracted fee. This is why I call it the hybrid model. You're functioning like a PPO practice, but with better reimbursement. Now, what's the trade-off, right? Like you're probably thinking, okay, well, what's the catch? You may not be listed in directories. You are going to need to lean into heavier marketing because you are not going to be listed in those directories as the in-network offices are. So you may have to ramp up on more advertising. Model C is the elusive fee for service. Everyone wants this, but not everyone can sustain it. This is the most desired model of all. Patients pay up front, you submit claims as a courtesy, and the check goes directly to the patient or to the subscriber, I should say, because you do not accept assignment of benefits. I mean, that sounds great, right? Patient's going to pay your full UCR fee right up front, and you bill as a courtesy, truly as a courtesy. Because if you're billing to survive, friends, you better go take that plaque down in your waiting room that says we do billing as a courtesy. No, you don't. You do billing to survive because 90, over 90% of offices are literally being run by your PPO contracts. So that old school plaque that's been up there that says we do billing as a courtesy, if you are a PPO or hybrid office and you're accepting insurance money, friend, take that down. Just take it down. All right. When I said not every area can support this, now we got to look at things like median household income, home ownership, education levels, family structure, age, presence of affluent families. If your area does not support discretionary spending, fee for service is going to be a struggle. And I'm going to say this plainly. What good is a fee for service business model if you're always going to be broke? Because if the patients can't afford to pay upfront and you live in a very blue-collar area, fee for service is not going to be the, I'm not saying it can't be done. It's just a slower way to grow your practice. And those are the three business models that we look at as we start to build out your billing department. And again, this stuff gets overlooked in the beginning. What happens is you open a practice and everybody's focused on new patients. And I'm not saying that you shouldn't be. Absolutely you should, but we are seeking new patients to come through the front door and we're letting the dollars walk out the back because we did not build out strategy, right? So do you see that each of these projects within the first pillar of the framework, the foundation, build upon each other? Now we're going to go into project number five, and it's going to be the demographic validation. Match the model to the market. Now we validate everything because your business model has to match your market. Well, it doesn't have to. It means you don't have to do any of this, but it should. And if you're looking to scale or create a scalable business, then you're definitely going to want to match your business model to the market because this is where a lot of offices go wrong. They build what they want instead of what the area can support. And then they wonder why it's not working. So we want to make sure that our demographic research and our business model match. Okay, that's project number five. Project number six. This is a very important yet overlooked step as well. It's the what I refer to as building out the command center. Now we take all of this information and we centralize it. This is called your billing command center. I like to use Google Workspace, and every single project gets its own folder, UCR analysis, and all the research that went into that goes into that folder. Employer research, insurance participations, demographic research, business model strategy. Because if this information is fragmented, you cannot make informed decisions. So your command center is starting to get built out. Project number seven is practice management setup. This is where the data becomes power. Now we move into your practice management software. And this is where we start building visibility. One of the biggest upgrades you can make inside of your practice management software is creating specific write-off categories or labels, not just the generalized insurance adjustment. I want to see Delta Dental in-network write-off, Cigna in network write-off, Aetna in-network write-off. We can track exactly how much each insurance plan is costing you. Now I'm going to do a spin-off here. I have heard of offices being totally okay with the write-off because they're receiving a good amount of new patients through these networks. So they consider that write off their marketing spend. So if that's you, then you can look at this and think how much money am I spending on new patient acquisition based on the write off percentage? And this Is where decisions about staying in network or going out of network become strategic because right now most offices make that decision based on what they get reimbursed for a crown or it's an emotional decision. Now you can base it on data. And I want to encourage you in this step to also think through all of the types of adjustments you're going to be making because we have the very general courtesy adjustment. Well, what does that mean? Courtesy to what? So try and get as granular as you can on creating these adjustment labels so that at the end of the year you can run a report that tells you how much you gave away in adjustments to the patients, right? So a write-off is the difference between your UCR fee and your contracted rate. That's a write-off. An adjustment is something you're going to do to a patient's account. So we have our professional courtesy, we have family, friends and family, but try and get a little more granular so that at the end of the year, we can really see where our money went. And this is where bigger decisions can be made. Try to stay away from anything general. Like if there should be nothing that says miscellaneous adjustment, that that is just not acceptable. So you can call it whatever it is appropriate for your practice, but just make sure that it's dialed in so that you can make a better decision at the end of the year and really see where your money went. Project number eight is procedure mapping. This is where the money hides. Now we get into the part most of you never slow down to do mapping your procedures. We start very broad, right? So we're gonna start with just a quick brain dump of tell me, just ramble off, doctor. I just want you to ramble off all the procedures you think we're gonna do as we start this new billing department. Or you can run a report. If you're an existing practice, you can run a report that will tell you, you know, your top 40 procedures because it's usually like 30 to 40 procedure codes that make up the majority of the practice income. You're gonna have your one-offs here and there, but in this step, when we're mapping out procedures and how we're gonna code them, I start with a very zoomed out brain dump. And I just say, okay, tell me all the procedures. So you can start with exams, x-rays, cleanings, crowns, so just very broad, right? And so now when we go to zoom in on let's start with exams, you're going to do comprehensive exam, no perio, comprehensive exam with perio, you're going to do recall, no perio, recall with perio. So how do we map those and code those interactions so that we can get better reimbursement for the things that you are already doing? We are not padding code so that we can pad claims. That is not what we're doing here. We are simply mapping out how to code every interaction we're having with the patient. And again, this is going to go into a folder inside of Google Drive, and we are going to keep it in our command center. And if we ever need to go back and reference it, we can go back and reference how we mapped out our procedures. Now, once we map out all of the procedures, right? So we specifically dialed in on exams, we dialed in on x-rays, we dialed in ancillary services, we dialed in on sleep services, we we dialed in on everything. Now we have all of that mapped out. Project nine is to create the explosion codes and give compliance some structure. Now we build structure into your practice management software. We create coding bundles, we define what gets billed, we what never gets billed, we add flags, we ensure diagnosis codes are attached because this is where compliance and revenue meet. We create do not bill on the codes that we don't want placed on a claim form, right? So, and yes, there are codes that you're not gonna place on a claim form. And I'm not gonna get into that in this episode, but I want you to see how each of these projects built build upon each other. And it is all in an effort to then dial it all into your practice management software, really understanding which fee schedules should live in there because too many times I look into someone's system, and I will see, I think recently we had an office that had like 1100 fee schedules in it, and they only really needed four. And we cleaned that up for them and they have been so grateful. It's a matter of understanding your practice management software and also your team understanding your practice management software because it's great that you find someone with experience, but if they don't know your system, they can unintentionally make a mess. So, fee schedule management is something that you want to get set up from the foundation the right way, but you also want to make sure that you know how to manage it because all of what we just talked about requires maintenance. And some of these projects need to be done every single year. And also in the command center, here's the expiration date for this project, and here's the renewal date for this project. And the renewal date represents the date that we need to revisit that project because your UCR fees need to be revisited every year. And you can get your Endos fee analysis every single year, but put it in your command center to do so. Let it become something that slips between the cracks and you did it in 2017 and have not done it since. And I hear that all the time. I'm not sure why fee schedule management, specifically UCR fee schedule management, gets overlooked when it is the bloodline to the practice. This is your financial base. So make sure that you have your projects outlined in your command center. And if these projects need annual review, then put a renewal date in the command center, but also put it on your calendar. I believe every office manager should have a practice calendar, and that calendar should be tied to the many projects that they have within their role. And that leads me to wrapping this episode up. Before I get to that, I didn't even give you everything within the foundation because I just I don't think we would have time to go through all of that. But if you're listening to this and realizing I've never done half of this, that's your answer, my friend. That's why billing doesn't feel predictable yet, because predictability is not about working harder, it's about building correctly. Okay, so next week we're gonna get into the roles map. Because even with the best foundation, if no one owns the work, it falls apart. So we're gonna talk about the different roles within a billing department. And it's up to you to decide who's gonna own that role. But we need to define what roles are required for your size of a billing department. I will see you next Tuesday.