Dentistry Huddle

How to Collect More A/R for Your Practice

Watch DSN co-founder, Michael Lomotan, and Pearly CEO, Jeff Cole, drill down into the best practices for patient billing and for collecting more aging A/R balances.

How to Collect More A/R for Your Practice

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In this webinar, you will learn about:

  1. Best practices for patient billing communication
  2. How to use the RCM maturity model to benchmark your practice
  3. How automation software can cure pain points in the revenue cycle

To learn more about Dental Success Network (DSN) and about how joining can benefit your practice, you can visit the DSN website here.


Michael (00:07):

Hello, DSN World. How are you? My name is Mike Lomotan. I'm one of the co-founders at the Dental Success Network and today our special guest is Jeff Cole. So Jeff Cole is actually the Pearly CEO.

Now, not to confuse things, there is a Pearly AI for X-rays, but this to me is actually much more important. This is Pearly and I'm going to call it A/R automation. And the reason why I wanted to bring them on is because as you guys, those of you who know me, I'm a glutton for punishment testing out different technologies and I put my money where my mouth is. And what I like to do is actually try different things on our own practices just to kind of see what's going to move the needle. For those of you who actually own dental practices, run dental practices or even just run the front desk, I think one of the most difficult challenges that we have is being able to collect from patients. 

Michael (00:57):

We all know the methodology, we all know what your coaches say. The right way to do it is of course pre-collect or actually collect at the time when the patient comes in. You guys know if you guys are doing your insurance verification correctly, you guys are going to know how much the patient is going to owe. But ultimately many offices just say “bill”. 

Patients will come in, they're used to a certain way of doing it, maybe you acquire an office where they had done it a certain way and we'll just say, “bill me”. And once you say “bill me”, that to me that's money completely gone. It's like sometimes it's good luck getting a patient no matter how responsible they want to be to pay you. We've experienced it firsthand and there are different ways to do it. Some of you guys will make a phone call, some of you guys will actually send an actual statement. 

Michael (01:40):

You can also use automated systems like patient Pay Connect or Dental Exchange, which will send out a nice bill for you guys or there's electronic ways to do it. And one of the easiest ways that we found our office is basically to send a link to pay via phone. I know that if I get a text message or an email or I'm sorry if I get anything in the mail, I actually tend to ignore it. Right. I think more, I think junk mail is keeping the post office alive now at this point, right Jeff, than anybody else. 

Jeff: Yeah, certainly. 

Michael: But if somebody emails me a statement or text message me a statement that's connected to Apple Pay, I will pay it. Even if I'm not supposed to pay it, I just pay it. But I think that sort of impulse, instant gratification actually lends a lot to what we're going to do here today. 

Michael (02:29):

So sorry for that long-winded introduction, but I really just wanted to summarize that by saying we've used it firsthand in our offices and it's done an amazing job of being able to collect old debt and actually keep up with patients that are coming in to collect balances on the fly. With that said, Jeff, I'll let you kind of take it away and we'll sort of field questions back and forth, keep it organic. If anybody in the audience has questions, feel free to raise your hand. I'll post it here. But yeah, let's just have a discussion about what you guys have found in the industry and why you built this company about streamlining patient A/R because frankly that's the better your A/R collection is, the better your cash flow, the better you cash in your pocket. 

Jeff (03:12):

Yeah, exactly. And for us, when we look at the industry, we have over a thousand offices using our solution to one, really streamline patient billing go forward, but then also to collect on those past due balances. And when we work with offices, I think our general high level philosophy is that patient billing shouldn't suck as much as it does. There's disjointed workflows, it's very time consuming and we sort of look at that in two ways. The first is from that patient experience. There are always certain patients who are truly trying to skip out on their bill, but that is a much smaller percentage than if you look at your aging report and you look in terms of “what's your collection rate?” So why aren't those patients paying every other industry? You're used to either paying upfront or you get a bill and you pay it. 

Jeff (04:03):

What we found is that again, there's really those two factors. The first is that patient experience, so really building something that aligns with how people today expect to pay. A lot of the existing solutions are really more built for the practice or for insurance workflows. And they say, okay, well a patient's going to get a paper statement and they're going to need to mail in a check. Our view is you should not force patients down a specific path. You should open up every possible door to get paid faster. And that really comes into two aspects of it. One is notification. So when we sort of looked at it and decided to build Pearly several years ago, a big piece was so many practices are focused on that patient engagement or digital or marketing. Maybe they're doing text messages for appointment reminders or different marketing campaigns for recall and can be quite sophisticated. 

Jeff (04:59):

Then suddenly it comes to the getting paid aspect of it and it's this antiquated batch of monthly mailed statements. So we just saw this big disconnect from how practices were embracing technology and automation when it came to things like appointment setting and marketing, but then suddenly billing, it was batching monthly statements. There was this huge gap and the reason it exists is because it's challenging, right? Patient billing is tricky. You have to even just understanding the correct patient portion versus the insurance portion, it's painful. So that's really where we started Pearly focused on how can we, one, make it a better patient experience, which in turn makes patients pay faster and pay more. And then two, really digging deep in leveraging automation and data to reduce some of that manual workflow because something we'll hear all the time, and Michael, I dunno if you experienced it at your office as we sort of see, I'd say two sort of flavors of what practices do sort of pre-Pearly. One is they either are very on top of their A/R, but they're spending an enormous amount of staff time to do so.

And we've seen it all the time and we hear this all the time of, “okay, well I sent six letters to this patient and I made a collection call and we collect it, it's great.” Well that was for an $11 and 23 cents bill and now you've just spent more time and money than you're actually going to make on that, right? 

Michael (06:33):

And you and I are in California, right? 

Jeff (06:36):

Exactly. It adds up quickly. Or the other flavor is, hey, we have too much to do. Honestly, A/R is just not something we monitor. Suddenly you're reviewing reports and it becomes this, “oh my goodness, we have this huge A/R balance. We're really in a difficult place from a cash flow standpoint and now what do we do?”

So it's really that how do you save time and then also how do you improve that collection rate? And so what we've really built is a solution to do that and really focused on some of our workflow type things. So what I can kind of do, and Michael has obviously used our solution and kind of pepper 'em in here, but just to give a more of a high level how we think about it and what offices on this webinar can do, whether it's via Pearly and other solution or just some internal tips where how can you improve cash flow and improve your collection rate, improve those metrics, but not have it be a huge addition of staff time. And that's sort of the sweet spot there, because ultimately it's how can you collect money faster but also not have money going out the other way in terms of increased costs for your staff.

Michael (07:54):

And I'll chime in there just to kind of sprinkle in some color. Many offices will outsource a lot of functions. We'll outsource billing, we outsource verification, yet we handle the A/R. But yet you have phone calls to deal with, you actually have to batch claims if you're going to deal with a third party. And so what I found is actually something that kind of falls by the wayside. We're no different in a busy office. It's like you said, taking that time to call, send a text message, send an email, send a letter, it just takes a lot of time. And why not outsource this? Frankly, I guess I grew up in a household of accountants who actually know about this and talking with my dad, he's like, as someone that owns a dental office, you can't beat everything. So outsource things that you aren't good at. Focus on your operations and of course my wife's a dentist. Focus on the clinical everything else. Find experts in that industry to be able to do that work best for you. 

Jeff (08:47):

Exactly. And I think when it comes to A/R, it's not sort of a one size fits all approach in terms of a practice will have that same manual process for a $2,000 balance that's aged or a $7 balance because the insurance estimate was incorrect. Where our view is that your trained team in the office should be focused on those edge cases. So if there's a claim denied, the patient has a large balance. Things that do require conversation, but that should be five to 10% of all of your balances, not a hundred percent. So we view where set up automation and rules in place that if you have staffing changes as you just get busy, A/R does not. Sort of assuming that you as a practice owner or you as an office manager sitting at the front desk, you have these systems in place that it's just something every couple months you say, “oh wow, we haven't run statements in a while, we haven't reviewed our A/R.” It should be a daily system that goes out going forward. 

Michael (09:58):

Yeah, agree, agree. 

Jeff (10:00):

And one thing I'll just show quickly when we talk about the problem, how we also think about it is it's really a compounding problem. So one week gets busy, you forget to send reminders, you forget to send your statements, is that going to move the needle from a collection rating standpoint? No. But then that starts piling up and we see these massive A/R balances where you have this combination of you're spending so much time and you're not seeing those results. So when we really talked to practices or how we sort of look at things, we came up with this term that we call basically the patient RCM Maturity Model. So looking at your office and how are you handling the patient portion? So as you mentioned, best practice, collect as much as you can upfront have estimates. In reality there will always be patient post-visit or post-insurance. 

Jeff (10:56):

So most offices we see will be in sort of this level one or two kind of ad hoc or structured approach. And when we work with practices outside of really using our software, it's having that conversation to understand, what are their current processes, and how can we move them up this maturity model where the goal is that it's not only automated but you eventually get to optimized where you're learning from data and improving those systems based on what's happening. So we just ran a big study for example in terms of how many touch points is optimal, how does changing dynamic messaging improve that call to action? And we think about it similar to billing is marketing. You're trying to convince patients to take action similar to how you think about your new patient acquisition or recall. It really mirrors more marketing automation than anything else. 

Jeff (11:53):

And so how can you leverage tools but also processes to focus on it where you have this great process. So I can just run through a couple of these real quick, but just I'm guessing all the folks in this webinar, you'll probably think about your office and sort of understand what bucket you're in and then what are ways you can move it up. So ad hoc, hopefully no one on this call is in this bucket, but this is where you're dealing with too many different things. It's a really reactive approach. So maybe at a quarterly review, oh shoot or A/R is a big issue, that's something that, oh, we didn't get to this month. Right, right. Shorten my 

Michael (12:35):

Accountant, call some people, get some money that can pay the rent. 

Jeff (12:38):

Yep, exactly. There's usually some trigger that makes you realize, oh, I haven't been focused on my A/R, let me take a look at that. Right? But there's not really that process in place where we do see a lot of offices are structured, so they do have a policy where it's okay whether it's a monthly batch, we're using different tools to send reminders. There is at least an established policy in place. Now is it followed regularly? That can be a question mark, but there is at least that process in place. The second is digitized. So this is you're using a patient engagement type solution or you're manually sending out reminders using your practice management software. You've moved beyond just “let's send a batch of monthly mailed statements” to “let's be a little smarter at how we're using digital solutions where patients can pay on their phone with Apple Pay”. 

Jeff (13:35):

Maybe they want to call and pay over the phone, maybe they do want to mail in a check. Don't force patients to just mail in a check and their only options to receive a paper statement like this isn't 1990. Right? So I think that's really what we've seen is using those existing tools where there's this weakness is that it still requires that staff. 

I recall speaking with a large DSO that we work with and they have two people that all they do is go through and manually send out billing reminders via text message every day. And that's their full-time job. That's one, not the most meaningful of work, but two also not great ROI there. So that's where we really focus on is how can you get to the level for that automated stage. So this is where you have workflows that are triggering action for you. 

Jeff (14:29):

So for example, within our system it's a daily batch. You can set certain blocking rules as well as eligibility criteria. So whether you want to send it when there's insurance pending or the day after that claim is posted and there is a patient balance, they're going to receive that initial text and email. And even getting more sophisticated in terms of sending that reminder every seven days if someone hasn't paid after receiving three or four digital notifications then automatically trigger a paper statement to go out for example. But you're going to collect the majority on that digital front. And so really having that 85%+ of balances are resolved without your staff being involved. And that's from even sending reminders. So you set yourself up for success when you have these workflows. And then the level five optimize this is leveraging what's working and what's not to tweak and improve those workflows. 

Jeff (15:29):

So similar to what you do for a marketing campaign, looking at the data and tweaking or investing where it makes sense, for example, a feature that we just rolled out that we're seeing a lot of success is, okay, well what happens for those folks that let's say it's been 120 days, they've received a number of texts and emails and they still haven't paid. Well, we could trigger for example, a pre-collections letter with more escalated language and then that arrives on a follow-up list where at that point it's something you could either send to collections or write off. 

So that's really where we're going with the process. And again, this is something just to think about for everyone's office on this call is there's a way to do it with technology or internal processes, but really just thinking about patient billing as this critical and core operational standpoint to improve that cash flow. And a lot of folks, it ends up being kind of the last thing on the to-do list and write-offs and aging A/R is typically the result. 

Michael (16:38):

And having gone through the process of actually transitioning from, well, we use another practice management system to send out a link. It wasn't automated, we would do it when we saw a balance, although we had a process in place, it did fail sometimes when things got too busy. One of the things that I want to bring up, especially for offices that are looking to kind of look automated this process is when you print out a statement, you can look and say, oh, I know that patient and you'll kind of lend this, let's just say personal favor or favoritism and say, okay, I'm going to send 'em a statement later. I know that they're having whatever financial problems, we'll give 'em exceptions. Don't let those exceptions be the rule. So what we did was we literally closed our eyes and just did it. And what that did was you're going to get some people that are going to say, where's this bill from? 

Michael (17:25):

How come I never heard about this? They're going to be upset. But what I noticed is that it started the conversation again with that patient. You can deal with it at that moment. It's easy to resolve a credit, whatever you want to do. But it started that conversation again with that patient and literally brought them back into your office. Sometimes they didn't go to another office and they just didn't see the dentist anymore. So that's what we actually saw as a weird upside benefit to doing this. Sure there were some balances we actually made a mistake on, but others were very valid balances that we needed to collect on that might've been a year and a half old. And we were able to collect on a lot of those. 

Jeff (18:01):

And with that outreach is mentioned is sending one statement and saying, well they didn't pay, your patients are busy too. So it's sending those consistent and frequent messages where we've seen some patients pay after their 11th digital notification and it just so happens that they kept putting it off. They were sitting in line to get a coffee, they get the text, they say, oh, okay, I'm going to just click and pay right now. And in terms of those phone calls are starting the conversation. That's something that we mention all the time where I think there's some of that hesitation of well what if the patient calls and my office is going to get a lot of calls. We look at that as that's actually great. One, you'd much rather get an inbound phone call because how many voicemails missed calls is it going to take your team if you actually called out to your patient to try to have that conversation? Right? It's usually, it's going to take three to four times more of the effort than getting that inbound phone call. And like you mentioned too, it can be that hey, the office made a mistake and that's just another opportunity to say, “Hey, we've adjusted this, thanks for calling back. Hey, I noticed you're not scheduled for your next cleaning” and just starts that conversation, which is so important. 

Michael (19:28):

So maybe we can jump into how this process works and the way we do it is as soon as the EOB has been entered, again we use a third party billing company as soon as they're done and if there's a balance due, it automatically sends 'em a text message. Maybe you can kind of go into how that works, what practice management systems you work with and then just jump into maybe if you have a case study, what have you seen a turnaround store would be great. 

Jeff (19:58):

So in terms of how it works and actually our software and what I'll do even here is I can just pull up the actual software for you. So what we do is a couple things. So the first piece is setting those different rules. So within our software here, there's a few different automation rules. So the first is blocking rules. So this is how we can set up what people you do not want to send statements to. So for most offices, this generally isn't a huge issue, but for example, maybe you have Medicaid patients that you need to treat differently. Maybe for example, you're working with a third party collection agency and you've already sent a lot of that debt to them. So the collection outreach is on them. So using billing types or there's specific insurances that you work with that even though your practice management system says that they owe $50, that's not actually the case. 

Jeff (20:56):

And then the second piece is that eligibility criteria, which you mentioned. So this is as soon as that claim comes back, but even getting more granular in terms of how many days after their visit, which aging buckets do you want to engage? Are there certain balances that you want it to automatically go out to? But maybe if it's over a thousand dollars you don't want to automatically send that but be able to view that list within Pearly because maybe there was a billing error or maybe you want to handle that differently. So with our workflow and our criteria, it's really trying to mirror what previously you were doing yourself. So we wait for the claim to come back when there's a balance. We come in, we review that, we make sure that they're not one of these specific billing types and then that initial text and email goes out. 

Jeff (21:48):

But then importantly, it's also setting reminders. So being able to dynamically change the messaging that goes out. Again, trying to mirror that marketing automation approach as well as being more frequent and importantly through Pearly. If they click in self-pay via Apple Pay as you mentioned, or if they did call the office and they gave you their credit card over the phone for example and you posted that payment, because we integrate at the transaction ledger level, we're able to see that that's posted and then those reminders stop. So it's really kind of a set it, work with you to do the workflow, tweak it over time, but once the system's really going forward and going out there, it's not something that you need to adjust. And obviously being able to track everything. In terms of some of those benefits of doing it, as we mentioned, it's how do you have that centralized and consistent process 

Jeff (22:51):

For group practices this is what we see all the time where you could have two offices, very similar patient demographics, very similar production levels and their A/R and collection rates are wildly different. And that's because Office A has Sally who's been there 10 years and is really on top of it. Office B has Bob who's new to it and just getting his feet wet and is not adhering to those policies. You suddenly look six months later, very different outcomes from a collection rate and a cash flow standpoint. 

So by leveraging the automation in these triggers, both offices are going to have the exact same process and experience regardless of staffing or as you mentioned, if it happens to be a busy week for example. So that's kind of how it works at a high level and this is sort of, looking at best practices, what we like to design. So it's really thinking about it from that workflow standpoint where on day one, and that can be defined in your case Michael is as soon as the EOB’s posted, others do want to engage folks even when if they, let's say they knew what the patient estimate was but forgot to collect it at the front desk. 

Jeff (24:09):

If there's that patient portion, even though the claim is outstanding, they want to even reach out then, as well. And then setting those different reminders and also using, we sort of are big proponents of obviously digitizing everything. There's still paper, and mail still exists, but it should be used for let's say five to 10% of your patients strategically, not a hundred percent of 'em because postage isn't getting any cheaper. And then having a process where what we've seen is typically about 25% or so of patients will pay within 24 hours of receiving that first text and then it kind of spreads out from there. But also having a process to say, well what happens if it's been, for example, 180 days and the patient still hasn't paid? Well now you're going to have a report and be able to say, okay, we've sent this patient 15 text messages, 12 emails and two letters and they still haven't paid.

Jeff (25:09):

Well then at that point you're able to take the list and decide, all right, it now does make sense to send this to a collection agency or if it's a smaller balance, potentially write it off. But again, the important piece, and I think you really hit the nail on the head, is that it's a policy and a process for everyone. It's not, “oh well it looks like Mary hasn't paid, but I know she's going to come in six months and we'll just collect the balance then.“

And that just starts compounding. So really setting a clear process in place to one collect on those older balances. If you haven't really done so today and you're seeing that A/R buildup, but importantly set a process going forward, so you're training your patients on this is the policy, as soon as they get the reminder they can pay it on their phone. And then going forward you're in a position where if things get busy or if there's staffing changes, you're not going to be stuck with a huge A/R balance, collection issues, et cetera. 

Jeff (26:12):

And so in terms of customers, I guess that we're fortunate to work with over a thousand offices now, anywhere from smaller independent single dentist offices all the way up to 150 plus locations DSOs. So specifically for the smaller either individual offices or even small ones we've seen is where Pearly is a great fit is where really two things: One, you do have some collection issues, so you have that A/R building up looking at metrics is your A/R greater than your average one-month production? That's kind of a good metric to look at the collection ratio. But then also digging in if 90% of that is over 90 days past due, right, all balances are kind of not created equal. That's a big piece of it. The second is from a staff standpoint. So we do work with some offices who don't really have an A/R issue, but they're just, staffing is such a big challenge that their team is either spending too much time or not able to do it. 

Jeff (27:24):

So leveraging Pearly in that automation where if you can save your team  a few hours a week and collect money faster, that really adds up. And especially with us since it's daily, that's something that I think practices don't think about as much as they should from a cash flow standpoint, where if you're doing a month batch, depending on when the patient came in, it could be 45 days for example, from when the patient receives the first let's say statement or touchpoint that they do in fact owe a balance. And then if you think about the time that they're going to pay, so what we see with batching it digitally for many practices we'll see over half 50% of the folks pay before a mailed statement could even be delivered. So that just totally changes the cash flow situation there where you're actually collecting more but you're actually speeding up and reducing the number of days to pay. 

Jeff (28:30):

So that's kind of I think the overview of how it works. I'd say that for offices we have some great data and something I encourage everyone to do is we take a look at our website under the dentistry huddle. We do a lot of, I guess probably more detailed than most folks on this call need, but some very detailed billing metrics and outcomes. We have a patient billing report in terms of how fast do patients pay looking at payment method by the age of the patient and those preferences. Interesting. Yeah, we dive into things like what day, day of the week collection rates spike up versus down. So we look at a lot of this that we then take this data and blend it back into our product. And so this is a report that's on there, even breaking it down by region. Southern California is a little different than certain areas. We have a practice that we work with in rural Texas where they have a very low self-pay rate, meaning people clicking on the link and self-paying. Usually it's sparking that conversation. We work with a group in the Bay area near San Francisco with a younger, more tech savvy demographic and 85% of their payments are via Apple Pay. So it just goes all over the place. And you want to be able to tweak those workflows to get the best results that you have. 

Michael (29:59):

That's actually interesting, right? Because we're in DSN and DSI, we're very much analytics driven and I like to look at the age demographics of our patient base. So we have two offices. One our flagship is located in a tech park in San Diego, right next to Google, right next to Apple. That's exactly what we see. Our demographic is the majority, 50% of the practice is under 40 years old. So that's what we see. But oddly enough they're also that same demographic that's inundated with information. So maybe it'll take 'em sort of two messages for them to after they ignore the first one. The second one simply reviews. We've noticed that with reviews it's actually a lot more difficult to extract reviews from a younger population because they're numb to all the information that comes in, but they actually do click on the link and we do see that transaction back. So we're able to track that. So it's very interesting that you're behind this 

Jeff (30:56):

And a couple sort of interesting, I'd say universal truths that we've learned is it's the transparency piece. So we pull in all those transactions and break it down into sort of a readable digital bill. And that's what we found is that a lot of folks who are sending it out digitally, it just says, hi Michael, you have $50 click here to pay. Yes. And you say, wait, I thought I paid in the office, I thought my insurance is covering it, right? But if you click and it says $50, here's why. Here's the treatment you received, here's the claim that was paid and this is the resulting patient portion with a description of it. Then it says, okay, that makes sense and I can go ahead and pay. So many billing issues are a result of expecting your patients to be a dental expert and understand the dynamics of underestimating the claim. That's just not going to happen. So being really transparent there makes a big difference. And I also think what's funny, we always just for fun looking at some of the outlier trends where I think the misnomer is that, oh well young people are on their phones and paid digitally. 

Jeff (32:20):

Everyone's on their phones and, I think our record is a 98-year-old woman paid via Apple Pay. So I think there is also this approach of we see this a lot of, oh well no, I have an older patient demographic, they're going to want those paper statements and then they suddenly turn it on and move to digital and use it more strategically and see a 30% lift in their collection rate and days-to-pay going down because everyone's online, everyone's on their phone, especially during the pandemic, everyone knows how to use Zoom and texting. So meeting your patients where they are from a billing standpoint is so important in the exact same way as you mentioned, where you're trying to get reviews, what are those metrics you're looking at, right? You're trying to make it easy to leave reviews that you need to send multiple notifications. Well then why when it comes to billing, mailing one statement and expecting a hundred percent of patients to pay after receiving that, that's just not the reality. 

Michael (33:21):

Yeah, absolutely. So yeah, this is awesome. I do have a multiple office question for you. So what have you seen in terms of best practices like with your DSO customers? Does each office handle it individually or is it centralized under one whatever controller A/R specialist? 

Jeff (33:40):

Yeah, so I'd say about 80% of the DSOs or multi-office are centralized. So they have a centralized team. Now what I will say is that it can vary. So what we do see is, for example, the offices are expected to handle that, obviously handle the in-office collection piece and potentially send out the first statement, but as soon as it gets over 30 days past due, then Pearly kicks in at the central level and it's handled that way. 

So we see a variety of ways, but I'd say definitely more of a trend to centralize it where with larger DSOs, you'll have a team of people that all they do is focus on the patient A/R piece, others that focus on insurance. So there's different ways to do it, but in general that centralized approach and I think that's where it's going. Where a lot of DSOs we worked with were previously not centralized and then by implementing a solution like Pearly, they now are able to centralize it and be able to review that across. So in your case with two offices, that could be done as well. But in general, I'd say when you, if it's a five plus location group, then you start seeing a little more centralized versus using it in the office below that. 

Michael (34:58):

Yeah, understood. I mean once you start to get to that multi, multi-office, it's a real consolidation of resources I guess is the right way to look at it, right? So that's where you're going to see that. Do you have for the audience a picture of what it looks like on the phone? What do you get, what kind of link you get? I was going to pull it on my phone, but I realize it's probably HIPAA violation. I don't want to show how much I owe my wife from my bill. 

Jeff (35:25):

Yeah, let me actually do a demo mode here.

Jeff (35:37):

I can show you is when you actually click, and obviously this works, phone or not, but in this case you can imagine on a phone it looks nice pay now again, being able to see what and why you owe, right? Okay, the insurance came back, here's the balance and then being able to pay now, so whether it's eCheck, ACH, we default that because it's cheaper credit debit card or digital wallet. So in this case, because I'm on my computer on Chrome, it's Google Pay, if I was on my iPhone, it'd be Apple Pay and dynamically does this. So a couple clicks to make the payment. And importantly, once a patient has self-paid through the Pearly portal here, their card is securely stored on file. So then the next time they come in, it actually even gets easier where you don't even need to click the link. It says, hi Michael, you owe $50, click here to view your statement and pay or reply to this text message with “ok”, and we will auto charge your card on file. So you don't even need to click there. 

And we've seen that once you've worked, once this has been implemented, let's say six plus months, patients come back, they're trained on the system, those stored cards on file become really valuable from reducing your days to pay and making sure that that's what people expect. 

Michael (37:06):

Yeah, absolutely. I mean I know that I'm one of those guys where if I have to type in my credit card information that I've not memorized good luck and I carry a very slim wallet. So I actually don't carry credit cards anymore except for one or two. And those are always the ones I don't want to pay my medical bills with, such as my business card and my ATM card. So storing it is actually pretty valuable. I do like that. 

Jeff (37:33):

And what you notice too, which is interesting, is I think about everyone on this call probably uses Amazon to buy personal stuff, right? Yes. It's stored, it's one click. They have teams of people trying to minimize the amount of friction between each button to improve those conversion rates. So that's a lot of what we do from the billing standpoint as well. 

Michael (37:53):

Yeah, look, I hate the fact that everyone has made it so easy for me to spend money on useless things. I'm embarrassed, I think I bought, what did I buy? I bought an Ax one day and a 24 karat gold coated ratchet set just because you're up late at night and it's impulse control.

Jeff (38:15):

It pops up and you click the button.

Michael (38:18):

Just push the button, it’s made it too easy. But there was no reason why that shouldn't apply to our businesses as well. We, as consumers, we're just inundated with it and this is just the way people buy now. So this has been a game changer for our practice. Now for those of you in the audience, if there's any questions you might have Jeff or myself, feel free to just drop it in the chat. This will be recorded, we're all going to post it. One thing I do want to mention, Pearly is one of our preferred partners with the DSN. So by all means, you go to Pearly, sign up, it'll be a game changer for your office or if you wanted a discount on their services, join DSN. And for those of you who aren't familiar with DSN, we are a community of about 1400 dentists. 

Michael (38:58):

We have our online education, so we have about 250 hours of online CE. So if you don't ever want to leave your house and be a gremlin, you can just do all your CE there. And we also have a GPO and our GPO. We have deals with suppliers, equipment, software services Pearly, is one of our preferred partners here. And like I said, I do my best to try every single service out there. Sometimes it's a little daunting, but this is one of the ones that I really just kind of fell in love with because we were able to collect on very old balances and as we move from a cash to accrual model, it really helped with our cash flow. And those of you who are EBITDA junkies, bringing that money and increase your EBITDA. So if you're looking for an exit, that's the key way to go. 

Jeff (39:45):

Definitely. And DSN, you guys have been a great partner for us and it's awesome working with obviously all your offices in the network because you do have such great education. And for us, if we get to work with offices who understand the importance of improving their cash flow and reducing collection rate, it's a great partner where sometimes with customers of ours or practices we work with, there's a little bit of that education piece. If we say, “oh, do you know what your A/R is right now? No, how do I run that report?”

Okay, you're going to have a bit of surprise when you download that and look at it. So it, it's so great having offices who do understand the, and obviously from our perspective, one of the real key pieces of getting paid for the services you've provided is kind of a basic, I guess, fundamental business principle that should certainly be focused on a little bit more. 

Michael (40:47):

And in the world of dental KPIs, we know a few important things. You want to get your case acceptance rate up, your fees accepted, rate up your reappointment rates, number of new patients and lower your overall supply overhead. But I always see A/R being ignored and again, what is the right way to do it? 

And what we saw was this, again, I think the two levers that we pulled that were the most impactful was lowering our overhead by renegotiating all of our supply and equipment deals and then improving our A/R. And that was coupled with outsourcing our billing. Because for those of you who run a front desk, some people quit and when that person leaves, that critical function of your business completely stops. And so by outsourcing this and letting technology take over or letting a third party take over, it literally doesn't matter what happens. So we did have a couple questions. I think the first one: what kind of reports does Pearly generate? 

Jeff (41:56):

Great question. Lots of different reports. So within the dashboard of the software, you'll be able to, on a real-time basis, look at your aging by cohort, by balance, different things like that to actually visually understand what it looks like. We also have a feature that we call our A/R Assistant that sort of goes a little deeper beyond just what's the dollar amount and what's the age where we'll look at it. One category we call “digital savvy”, so younger folks that have a cell phone on file within your PMS that are great to start engaging. Also a bucket of “write-off risks”. So we look at that as where you're 90 plus days past due, that's an under $50 balance. That's typically ones that you're not necessarily going to send to a collection agency. 

Depending on the balance size, probably not worth spending a lot of time internally calling versus with just the automation workflows, we see people collect $6 balances that are really old and that is sort of my favorite category because kind of the picking free money up the street, you knew that if that bill wasn't paid, you're not going to send it to collections, it's not really worth your time to chase manually. 

Jeff (43:13):

So that's a big piece. And then on the other reporting standpoint, looking at a consolidated report to see processed payments prompted ones that came in, being able to look at all of your A/R by status. So if they're being engaged by Pearly, how many touch points have they received, how many days have they been in the flow, which we mean when they get their first reminder. So you're able to dig into that and digest it either in the software or downloaded in Excel. 

Michael (43:45):

Awesome. Got two more questions, Seth. Hey Seth, how's it going? I know you're asking what's the cost? I don't know if it's listed on the website. DSN does have a discount, but I won't mention that right now. We can take that off privately. But Jeff, is that something you want to address? Yeah, 

Jeff (43:59):

Typically depending on the size, and we have different features and different things like that, it's usually around $300 a month per office and then DSN members get a discount on that. 

Michael (44:11):

Yep, appreciate it. Here's a great question. It says can you customize settings per individual patient? For example, 90-year-old Mary is used to always getting paper statements and always pays her bills. He says, I'm not worried about Mary not paying and wouldn't want to make her upset by sending her multiple texts that she doesn't know how to use. 

Jeff (44:30):

Good question. So on an individual patient standpoint, generally the settings are more based on billing types or different cohorts and things like that. So it's usually a little more around those suppression or what will we call blocking rules. So for example, you could go in there and say, for Mary specifically, I do not want her to ever receive text or outreach from Pearly. That would be sort of the individual patient level or for example, depending on your PMS, if you're using billing types where maybe you have a do not send statement or a no digital bills category, we would then look at that and then either send or not send based on that. And then you can always do kind of a one-off text as well. 

Michael (45:17):

And that's a very valid question, and I get it. We were the word as well here. I kind of like to apply the Pareto Principle. So that same Mary, if she goes to the hospital, they're not going to selectively favor her one way or another. If they're going to send a statement, whether it's email or text or statement, they treat every patient the same. I had to get at that mindset and look at it that way because what I realized was I was letting 20% of the patients that I thought about, hey, the exec Mary or Bob who's so sweet and they're going to get confused. I sort of took their scenario and painted it across all of our other patients, which is now, in retrospect the wrong thing to do. I think it's easier to deal with a Mary or that one person that is upset and say, Hey, sorry we're brought to a new system. But you got to think about the upside, the 80% that you were able to collect from because of the systems in place. 

Oh, this is a good question. Does Pearly partner with any buy now, pay later? Apologize, I already mentioned Chiefs or 49ers. Look, I'm going to answer that last one. I literally, and still to this day, my childhood home, which my family still owns, is across the street from Levi Stadium. So you already know who I'm going to root for, right? I'm from born and raised, Santa Clara, Niners all the way. So ever since Super Bowl 16, I'm going to age myself, but Jeff, I'll let you take that. Does Pearly partner with any buy now, pay later I guess Affirm or any other ones? 

Jeff (46:44):

Yeah, well first off, I'm also a Niners fan, so go Niners and we'll have to do that. But yes, so we actually have, there's a few ways to do it. So we do partner with Sunbit. So if you're Sunbit customer that's integrated right into it, we also, depending on ones that we don't integrate with, you basically have the functionality where if you do have a pre-qualification link or something that you're already sending out patients for, that can be added dynamically to that digital statement. So you could also say for example, if the balance size is this or the days past due is this, then give this option. We also have an in-house payment plan product. So not financing, but you can say, hey, if someone, let's say, hits 60 days past due, we want to give them the option to break it up into three payments over three months, for example. 

Jeff (47:35):

So a few different ways to do that. And that is something that we've seen a lot of success in because most practices have a strategy for presenting treatment and offering payment plans in the office. But when the patient's out of the office and maybe there's an unexpected patient balance, then the only option is pay in-full, which shouldn't be the case because in that point if someone has a $500 balance, they're just not going to pay it or give them some options to break it up over time. And then whether using a financing partner or buy now pay later, then you can do it. And so we partner more with the industry specific ones since a lot of the ones that you're probably used to seeing on e-commerce sites like Affirm or different ones, most of them do not allow for medical. 

Michael (48:27):

I understand it too. That's why Sunbit exists or Cherry or, Heaven forbid, Care Credit, but we like Sun a lot in our office. They’re big up there, there's been a decent uptake on it recently and kind of shout out to Sunbit, right? So they are also a DSN partner. They're nice enough where if you are a DSN member and sign up with Sunbit, they donate to Smile Outreach International on your behalf, which is really, really cool of them to do. But yeah, it's true. I never actually see an Affirm option for medical. I guess there might be some rules around that. So if you're presenting a treatment plan that's going to be pretty large, do it right at the moment of treatment plan presentation and break out those payments right then and there and have 'em apply. 

Jeff (49:10):

Yeah, and something I'd say people or real practices that we often will sort of provide feedback on is buy now pay later, whether it's through a partner or you're just doing your own in-house payment plan, offering it for a lower balance than you expect, especially on the A/R side, there's people that for $200, they want to break that up. I think practices sometimes say, “oh well unless it's over $2,000 we're not going to offer it.” But for a lot of patients that let's say owe $200, if they're not comfortable paying that in full right now, they're just not going to pay you 

Michael (49:49):

Something's better than nothing. Right? 

Jeff (49:52):

You'd rather have them pay you $50 every two weeks for the next two months, then just have them not pay for two months. So there's a little bit of what goes into it is in a perfect scenario, no, everyone would pay in full right at the front desk, but that's unfortunately not reality. So how can we handle those scenarios? 

Michael (50:09):

Yeah, that's true. And we talk about the threat of collections. There are a lot of offices that will use collection agencies. We don't. We try to resolve it, but I find that sometimes it's more difficult to, once a patient is angry about a collections balance and that threat, they're threatening the reviews, they're making your life a nightmare and is it really worth that 50 bucks? So it is just having a better systems in place to try to either collect upfront or Pearly kind of alleviates that a little bit. Don't ever want to let them get to collections just because we're busy. 

Jeff (50:45):


Michael (50:46):

So with that said, Jeff, I really appreciate your time today. I love what you guys are doing here. You guys actually aren't even from the dental industry. Most people actually worked in the dental office and kind of stepped into it. You guys are a tech company that saw a problem  and decided to solve it. And I like that. So you guys are priced, I feel very, very fairly versus trying to hire a person to kind of man the phones all day and do A/R. So it has been a wonderful addition to our practice. So how can people get hold of you or what do you feel is the best way if they're interested in signing up with Pearly? 

Jeff (51:21):

Yeah, you can just head to our website and you can request a demo with one of our team members. We'll walk you through it, talk about your A/R, share what's worked, what hasn't. And then with DSM members, they do get that discount. We'll get you integrated usually within a couple days we can get you live and start seeing additional money rolling into your bank account. 

Michael (51:45):

Fantastic. And for those of you who are interested in joining DSN, you can email me, Michael at Dental Success Network or just go to our website, sign up and one of our concierge folks will reach out to you and give you a run on all we offer. So we are only $199 a month. So it's a pretty valuable offering for what we provide. And again, Pearly is one of our key partners and I really wanted to get them on board, give them a little love and just actually talk about how it's really done well for our practice. So Jeff, I really, really, really appreciate your time today. Thank you very much for doing this presentation and actually allowing us to see what the backend of print looks like. It was very interesting to talk about some of the site graphics and the best practices, what other practices are doing. And if you notice, just run a report for those of you who haven't signed up or aren't using it, run a report, look at your A/R. If you're using any analytics tool, look at your over 90, right? But if your total A/R is, I would say 15% more than what your average 12 month rolling net production is, you can do better. Right. And for that, you just should, general rule of thumb is trying to be at your 12 month average, 30 days out. 

Jeff (53:00):

Yep, exactly. Well thank you Michael and thanks everyone for joining. This has been great. I love getting into the nitty gritty of A/R . And yep, certainly anyone can reach out and learn more about what we do and yeah, thank you to all the DSN members. 

Michael (53:19):

Alright. Appreciate you.

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