How to Get Smooth Collections with Dental Insurance AR vs Patient AR Segmentation?
Are you fed up with accounts receivable affecting your collections and eating up your practice revenue?
It’s an issue that most practices face when they don’t use different follow-up and recovery processes for insurance AR and patient AR. You need a different approach to contact insurance companies and patients for outstanding payments, and coordinate with them to recover your dues. Both have different timelines, follow-up steps, and strategies to communicate.
And that’s possible if you use insurance AR vs patient AR segmentation to categorize the payers and use the right strategy for each segment.
Want to know how to do so? This blog provides a complete guide to segmenting these accounts and maximizing collections through professional dental AR management solutions.
What is Insurance AR vs Patient AR Segmentation?
Insurance AR and patient AR segmentation is the process of creating segments or categories of all the outstanding balances. You must separate unpaid insurance claims from pending patient balances because both need different approaches and processes for revenue recovery.
When you create the right segments, it’s easy to reduce your accounts receivable and smoothly manage the dental revenue cycle.
Why is it Important to Segment Insurance and Patient AR?
Insurance and patient AR processes are completely different.
Insurance companies are required to reimburse claims, while patients have to pay their share, which includes coinsurance, copays, deductibles, and non-covered services.
The risk profiles for insurance payers and patients aren’t the same, and the time required for collecting payments is also very different for insurance and patient AR.
Another factor is that recovering payments from insurance companies is easier than with patients. These companies are bound by state insurance laws and other regulations, like
Prompt Payment Laws, which require them to settle clean claims within 30 days. If payers don’t pay within the timeframe, they’re required to pay interest on the reimbursement fee.
Plus, if you’re dealing with claim denials, you have to follow a complete denial management process in which you:
- Check the denial reason on the explanation of benefits
- Write an appeal letter
- Attach the letter to the resubmitted claim form with:
- Accurate details
- Correct CDT codes
- Complete documentation
But patients are exempt from these laws. Recovering payments from them is a huge challenge for dental practices. These patients can be higher-risk payers than insurers if you don’t recover payments on time.
So, make sure to categorize insurance claims and patient balances and divide them into different segments for proper accounts receivable management.
How to Segment Insurance and Patient AR?
Automate Segmentation
By using practice management systems, you can create separate categories for insurance and patient accounts receivable. These systems help you organize unpaid insurance claims and outstanding patient balances in segments. It helps you to implement the right A/R management strategy for each segment.
Create Different Categories of Insurance AR
You can create the following categories to recover payments from insurance A/R:
- By Payer: Group claims by each payer (Blue Cross Blue Shield, Delta Dental, Medicaid, Medicare, etc.) to check which payers delay payments or deny more claims.
- By Aging Bucket: Divide claims by AR aging buckets: 0-30 days, 30-60 days, 60-90 days, 90-120 days, and 120+ days
- By Claim Status or Denial Reason: Segment claims by their status, whether unpaid, underpaid, or denied. You can also create segments by denial reasons, like missed pre-auths, wrong CDT codes, and incomplete documents, etc.
- By Dollar Value: Segment claims according to their dollar amount. Prioritize collections from high-value claims.
- By Filing Limit: Segment claims that are close to the payer’s timely filing limits.
Create Different Categories of Patient AR
Now, when you’re focusing on patient AR, create these segments:
- By Risk Level: Use patients’ payment history to see which patients are less or more likely to pay.
- By Aging: Just like insurance A/R, segment balances by aging buckets, and focus on recovering payments from the oldest balances first
- By Balance Size: Create segments according to small, medium, and large balances
- By Visits: Check which patients are active and have recently visited you, and those who haven’t visited for a long time. Based on that, create segments. It’s easy to recover from patients who visit you actively, and you need to follow up on those who haven’t visited in a while.
What are the Best Practices to Recover Revenue from AR Segments?
Review A/R Aging Reports
Track Recovery Rates Weekly
Find and Fix High-Volume Claim Denial Reasons
Outsource A/R Management
Checking and managing your accounts receivable daily isn’t an easy task. To recover payments, you need dedicated staff who review your A/R reports, create segments, and follow up on them consistently. And it can be very costly, especially if you’re running a small practice.
The best solution to this is to outsource your accounts receivable management to a trusted partner like TransDontics, which doesn’t just help you create segments, but also manages patient and insurance A/R separately and with the right strategy.
Plus, these companies are experts in dealing with multiple payers and patients. They have proven track records of recovering payments quicker than you can expect. In fact, they implement proactive billing strategies, like real-time eligibility verification, patient collections at the time of service, regular claim tracking, and prompt denial management. All these steps reduce A/R and help you get paid fast.
