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Unit 4: Administrative Operations
Administrative Operations

Section 5: Billing and Collections

Establishing a Billing and Collections System

To capture the types of patient income discussed in Unit 3, you will have to implement a billing and collections system. This table shows patient income categories and how these fit into the billing and collections environment.

Patient Category Charge Billing/Reporting Collection
Self-pay patients Charge per procedure or per visit American Dental Association (ADA) procedure codes* have charge assigned, or a per-visit fee is established Collect from patient at time of service
Third party fee-for-service patients (Medicaid and private insurances) Charge per procedure ADA procedure codes with full charge assigned (usual, customary and reasonable [UCR]**), transmitted electronically if possible Periodic bulk payment checks (itemized)
health maintenance organization (HMO) fully capitated patients Monthly per member per month (PMPM) Submit ADA procedure codes to HMO as proof of activity, but not paid on these Monthly check from HMO for all assigned patients, whether seen or not
HMO partially capitated/fee-for-service patients Monthly PMPM plus charge per service not in cap Submit ADA procedure codes to HMO, but paid only on services not in cap Monthly capitation check for all assigned patients, check for services above cap on patients seen
Uninsured, low-income patients Charge per procedure, or per visit, usually on a sliding fee scale Use federal poverty guidelines to establish sliding fees per visit or procedure; discount based on patient income Collect discounted fee at time of service
* See the current edition of Current Dental Terminology (CDT) from the ADA Council on Dental Benefit programs. http://www.ada.org/en/publications/cdt
** National UCR cost-per-service information by CDT codes can be obtained from a commercial vendor such as Wasserman Medical’s National Dental Advisory Service

The first step is to create a library of procedures by code, with appropriate fees attached (this can be developed from the above sources). Looking ahead to eventually monitoring productivity, it would be wise to also attach Relative Value Units (RVUs) to the procedures in this library. This procedures library then is entered into the clinic's information system, ready to be activated for the generation of claims and bills.