Dentistry Huddle

Getting RCM Right for De Novo Dental Practices

Learn best practices and strategies for implementing an effective RCM solution for newly opened de novo practices.

Getting RCM Right for De Novo Dental Practices

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The De Novo Model

Opening and operating a de novo dental practice has a well-defined set of pros and cons. While it can be a benefit to not inherit the culture of another administration or issues from a previous practice owner, the unpredictability of starting an untested practice provides its own set of challenges.

But the upside from a EBITDA perspective can often be worth navigating the pitfalls of the de novo model. On the M&A market, money doesn’t go nearly as far as it once did due to rising multiples demanded by dentists who are adapting to the expectations of DSO acquisitions. To ensure positive ROI, dental brands need to comprehensively outline their model for expanding to new markets.

One word comprehensively describes the approach needed to launch a successful de novo practice–proactivity.

From the outset of opening your doors, being proactive about setting up systems that streamline practice operations should be a priority. This includes establishing KPIs for performance monitoring, implementing a tech stack for clinical and business operations, and outlining end-to-end practice protocols.

Prioritizing these measures will mitigate most issues that typically emerge as a practice matures.

But even when much of this is premeditated, de novo dental practices still often experience growing pains, particularly in the area of patient billing and revenue cycle management.

De Novo Growing Pains

So what can typically happen when dental brands open de novo practices?

Well to start, establishing local traction to establish a patient base is always a challenge, but it is certainly manageable if demand and competition was properly assessed prior to breaking ground. After all, if adequate capital was allocated to give the practice some runway after opening, many miscalculations can be absorbed.

But once construction is complete and demand is sorted out, many de novos can still experience cash flow management issues. During the initial stages after treating the first wave of patients, cash can be tight because of upfront capital costs (e.g. dental equipment or leasing/purchasing a space), marketing spend, and payroll. Moreover, there will be a delay in receiving reimbursement payments from insurance companies.

When cash is tight, it’s crucial to properly manage what you have and collect on what is owed. This is why having an optimized billing system is so important for de novos. Because the part of the revenue cycle that you can control is the collection of the patient portion.

How does Pearly help de novo practices with this challenge?

Patient billing and accounts receivable (A/R) management are sets of tasks that should not be performed manually. Your goal should be to reduce staff time on RCM responsibilities, reduce process errors, and reduce days to pay–all while increasing collection rates. Pearly offers a suite of RCM tools that put these processes on autopilot.

Many de novos start to run into trouble when they fail to implement an effective system for tracking and managing accounts receivable. Though a newly opened practice won’t have a big issue with A/R, the goal should be to establish a robust billing system that can ensure healthy cash flow when it’s needed most.

This is where systems like Pearly are most effective.

Start early to educate and train your patient base on a payment and communication system. This way, aging A/R and uncollectible debt is never an issue. 

Set their expectations from even before the first visit. In an effort to minimize patient confusion over a statement or payment method, it is best to expose them early to your communication ecosystem so that paying their bill is frictionless.

To further optimize this system for your particular patient base, send different types of reminders and get a feel for what methods, language, and messaging cadence patients in your area will resonate with the most.

De novos leverage Pearly to do the heavy lifting for patient billing. With a robust system for patient-portion collection in place, there will be more bandwidth for growing the practice and offering higher standards of patient care.

If your organization is looking to outfit its tech stack with RCM software that is trusted by leading dental groups and DSOs, look no further than Pearly. To learn more about how Pearly can help set your de novos up for success, book a demo with one of our RCM experts.

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