On average, a good percentage of collections should range between 91% and 98%. It's preferable to target the higher end of that scale (for example, the average dental office loses 9% of its output due to uncollected revenues). Obviously, we want the collection percentage to be as close to 100% as possible. As mentioned above, the average collection percentage is 91%.
Realistically speaking, 100% is impossible because if you are giving certain cancellations, such as courtesy adjustments for friends and family. However, the minimum number must be 98%. This is quite common, when people move, get dental insurance that requires them to see a specific dentist, or that they go to emergency services and cannot afford to return. There are a few things you can do to help yourself when it comes to lowering your collection rate.
This quote from Peter Drucker's 1954 book The Practice of Management has become a cliché, but it's still applicable when it comes to dental practices and accounts receivable. It is essential that dentists engage their staff with an effective collection process that requires as little time and effort as possible. Sending accounts to a third-party collection is always an option, but it should be used sparingly, as it can damage your relationship with patients. Because dentists can recover a crown or dental bridge, they need to explain their use of collection agencies and understand what they can and cannot do to collect money.
Dental offices need to use the latest technology to collect their payments in the most cost-effective way possible. If you're willing to put in the extra time and effort, these steps should lead you to increase your collection rate. This figure also includes the insurance company's expected copayments, which makes dental insurance patients very valuable. We recommend calculating your collection ratio over a period of one year, as there will be changes month to month.