1. Acceptable total A/R: One month of collections or less (12%)

2. A/R & pending claims. 20% over 30 days acceptable and dwindling. 

>50% of AR in 0-30 days

<30% of AR in 30-60 days

<18% of AR in 60-90 days

<2% of AR in 90+ days

3. You want to see past due balances of 30, 60, and 90 days so that you can generate the correct letter or call as needed. You should also run an Insurance Aging Report at least weekly because you don't want those going past 30 days. Start collecting after 20 days. I recommend working the list weekly if not daily.

4. Once you get to 90 days the chances of collection are somewhere around 20% at best. If an insurance payment is not received within at least 30 days inform the patient so they have a chance to contact the insurance company to handle.

Note: Collection adjustments are basically limited to repayments, bounced checks, or a payment that was not posted accurately.

The sequence of steps Cambridge recommends for the management of your past due accounts in your dental practice are as follows:

1. Statement

2. Patient Call

3. 2nd Statement with note or letter

4. Patient Call

5. Past Due Letter

6. Patient Call 

7. Last Notice – Demand Payment Letter. If no response after last notice, send memo to the doctor for review.

8. Collections/Legal Action

Below are several samples of the above letters. Follow these guidelines, but if you feel it would be appropriate, write a personal letter.

Allow two weeks between actions. For instance, if you send a statement to a patient, give him two weeks to respond. At that time if he hasn't called or sent a payment, then he should be called.

Whenever you talk or write to a patient, find out all you can about that person from the prior contact note. For instance, if the treatment chart has a notation in it saying the patient just had a baby, start the letter or conversation by saying:

"Hi, Janet! Congratulations on your new baby! That's great! Did you have a boy or a girl?" Then gently go into the reason you are writing or calling.

It is always more effective to start a conversation or letter in this fashion. This way, the patient gets the feeling that he/she is not just a dollar sign to you and that you really do care about him/her. The patient will also be much more apt to pay you than if you just said, "You owe $100.00. Payment is past due!”

The longer you work at one particular practice, the more you will get to know the patients and the easier it will be to put a personal touch in your collection techniques.

Example Statements:

The following are some examples of what could be written on the bottom of a statement or in a personal letter to the patient. 

Example #1

Dear Mrs. Jones,

We just received the final payment from your insurance company for your bridge. They paid a little less than what was estimated, so you now have a small balance of $37.00. If you have any questions, give me a call. Otherwise, I've enclosed an envelope for easy payment today!

Sincerely,

Example #2

Dear Mr. Jones,

Thanks for your $20.00 payment on September 7th! This is just a reminder that your next payment of $50.00 is due on September 21st.

Our original agreement was for you to pay $50.00 every two weeks. Let's stick to that as closely as possible and your bill will be paid off in no time!

Sincerely,

Example #3

Dear Miss Jones,

Hello! How have your travels been? I'll bet it has been fun! Your insurance company has mistakenly sent a $675.00 insurance payment for your dental work to you instead of to our office. I doubt you've seen it yet, because you've been out of town. When you get home could you please send it in to us? Or better yet, come on in and drop it off. We'd love to hear about your travels! Also, you have a very small balance of $6.50. You can just enclose that in the same envelope. 

Sincerely, 

Require patients to zero out any account balance before allowing them further appointments for crowns, etc. Once you get to 90 days the chances of collection are somewhere around 20% at best. You really want to keep all ARs, both insurance and patient,  under 60 days. If you've thought about outsourcing your patient ARs the highly regarded Dental Practice Ninjas pick up patient ARs at 60 days. 

Kevin Tighe, Cambridge Dental Consultants, Senior Consultant, got bitten hard by the business and marketing bug during long summer days working at his dad's Madison Avenue ad agency. After joining Cambridge as a speaker in the mid-1990s, Kevin went on to become Cambridge’s senior consultant and eventually CEO. Cambridge Dental Consultants is a full-service dental practice management company offering customized dental office manuals. Frustrated? High overhead? Schedule a chat with Kevin at