Collections


Found on the Collections Board, this metric will include Production Adjustments, Collections Adjustments, Source Data, and a Year Over Year Chart in the Menu icon. View definitions and additional information by selecting the Information ( i ) icon.

What is this?

Collections is the amount of money collected on the agreed-upon fees charged. Collections are usually lower than Net Production (the total amount the provider agrees to accept as payment) and it is certainly lower than Gross Production (the provider's total invoice amounts before insurance adjustments and other adjustments). A dental practice reports its collections on the income statement. This metric includes the following data points:

  • Collections is the amount of money received and recorded in the patient's ledger

  • Collections Insurance is the sum of all insurance payments received on the insurance claims submitted.

  • Collection Patient is the sum of all patient payments received and recorded on the patient's ledger.

Why is this Important?

Is your cash flow really flowing? How do you collect on accounts to keep the cash flowing? Your company's access to cash and credit is important and may become critical if anything unexpected happens. To keep your cash flow management smooth, you need to measure it, improve your accounts receivable numbers, and prepare to withstand shortages.

Many factors affect how much a dental practice actually collects compared to how much it would like to collect in an ideal world. To start with, several factors lower gross collections. For example, insurance companies may not pay the provider's full fee; providers typically agree to limit their fees to scheduled amounts under their agreements with health insurance companies. In addition, some patients will not pay their bills in full or at all, so the practice will never receive the total amounts owed from those patients. Also, a provider's billing staff might cause the practice to lose money by not filing claims by the deadline, and insurers may deny some claims that aren't covered.

Suppose a dental practice's annual production totaled $1 million. That sum would represent its gross production. The amount the practice actually receives after sending the invoices to its patients and their insurance companies might be $800,000; this is the practice's collections

One way dental practices can analyze their performance is to look at their collections by payer. Typical payers include Medicare, Medicaid, private health insurance and individual patients. If a medical practice saw that its net collections were unacceptably low for one of these categories, it might stop accepting those patients or start requiring those patients to pay all or a portion of fees up front before seeing the provider or having any procedures performed.

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