Dental revenue cycle management (RCM) is the process that happens between a patient scheduling dental treatment and your dental business receiving their final payment.
Your dental revenue cycle is like a stack of dominoes — each step is affected by the step before it.
In an article from Dr. Bicuspid, it explains:
“When this [revenue] cycle is managed effectively, RCM increases dental business revenue and time devoted to patient care.”
This is why it’s important to understand how each step of the revenue cycle influences the one before it. Your cash flow depends on each step working together to get you paid. If one-step goes awry, you’ll see delays in payment, which lead to dips in your overall bottom line.
In this article, we’re covering how each step of the dental revenue cycle impacts another. And as a bonus, we’re giving you a free downloadable resource: The 7 Steps of Dental Revenue Cycle Management.
Fill out the form below, and it will appear in your inbox within minutes. You can save it, print it, and highlight it to remind yourself and your team how efficient dental RCM works.
First, let’s define the steps of the dental revenue cycle…
How the dental revenue cycle works — 7 steps
Before you know how the steps of RCM are interconnected, you need a clear definition of all 7 steps of the revenue cycle:
- Patient registration: The revenue cycle begins with the patient request to schedule an appointment. Your team or your patient scheduling app captures their personal and insurance information for registration and insurance verification.
- Insurance verification: Dental insurance verification ensures that the provider has current details about which services are covered by the patient’s plan. Then, the dental team ensures that the patient understands their financial responsibility for services — and the benefits and limits of their insurance policy — before treatment is completed.
- Presentation and acceptance of treatment: The provider presents the treatment plan to the patient, including the cost and expected insurance reimbursement for their treatment. The patient’s financial responsibility and payment options are explained (i.e. payment policy, payment planning, payment strategy).
- Claim submission: Coding and documentation are the core components of clean claim creation and submission. Accurate coding and record-keeping ensure that claims are both processed correctly and reimbursed appropriately and promptly.
- Insurance payment posting: Payment posting involves recording insurance payments received, making proper adjustments, and applying them to the appropriate accounts.
- AR (aging report) management: AR management is the process of pursuing unpaid claims until they are resolved. It includes monitoring and managing outstanding claims to ensure that they are reworked, resolved, and denials appealed until they are paid and posted. This step holds the insurance companies accountable to honor the terms of your contract.
- Patient collections: The patient is billed for the balance once insurance payments are posted. Collecting the patient balance includes sending reminders via mail, phone calls, or ideally, automated tech-enabled tools.
The steps of the dental revenue cycle lead you to collecting from your two revenue sources: patients and insurance. Missteps on your revenue cycle lead to inconsistent cash flow and decreased earnings, which will affect paying your people, your mortgage, or rent, and updating your clinical equipment.
7 places where your dental revenue cycle can fail
Let’s examine each step of the dental revenue cycle, where they can fail, and which other steps these errors would disrupt.
Step 1 (Patient registration) Fail: During patient registration, you should be carefully collecting the patient’s insurance and personal information. If the information is incorrect, you won’t be able to verify insurance efficiently, which can lead to last-minute confusion about patient coverage and their out-of-pocket cost, impacting your ability to collect from the patient at Step 7.
Step 2 (Insurance verification) Fail: Insurance verification should be performed at least 2 days in advance of your patient’s treatment. If it’s performed at the last minute, you have less time to troubleshoot issues with patient coverage, and you also might submit claims only to receive immediate rejections. This creates more AR work for your team in Step 6, and delays in your revenue collection in Step 7.
Step 3 (Presentation and acceptance of treatment) Fail: If there isn’t time for a detailed treatment presentation, then the patient could owe more than they anticipate. This affects how efficiently you collect from both revenue sources (insurance and patients, Steps 6 and 7), and also negatively affects your relationship with your patient.
Step 4 (Claim submission) Fail: If a claim isn’t submitted correctly or promptly, you’ll face claim denials, which lead to delays in your claim’s reimbursement — and claims revenue may account for nearly half of your overall revenue. Not only will you see a dip in cash flow, but your team will have to spend more time appealing denied claims in Step 6. 
Step 5 (Insurance payment posting) Fail: Incorrect posting causes problems with patient billing. If the insurance payment posted is incorrectly, you will likely collect the wrong amount from your patient as well, leading to an extra bill for them. This causes issues with patient collections in Step 7, and will also damage your patient’s goodwill.
Step 6 (AR management) Fail: When the insurance aging report is neglected, your pile of unpaid claims keeps growing. And if you wait past their timely filing due date to follow up with them, these claims will never be paid to you. A neglected AR report is a huge administrative headache for your team, and represents tens to hundreds of thousands of dollars left in the hands of insurance companies when it belongs in your bank account. It also delays the final billing to the patient in Step 7, making collections more challenging.
Step 7 (Patient collections) Fail: When you don’t collect effectively from patients, you’ll see an increase in write-offs, and a decrease in cash flow. If you don’t have automated patient billing, this means your team has to spend more time following up with patients about outstanding balances by phone and mail. This harms the patient experience, from the time available to produce and present treatment to patients, performing accurate insurance verification, or even just checking patients in. The dips and delays in revenue can make it tough for your business to pay its expenses.
Read more: From chaos to control: Relieve the pain points of revenue cycle management in dental practices
As you can see, each step of the revenue cycle is connected to another, so when one fails, others down the line are negatively impacted. The main consequences of a broken revenue cycle? Revenue leaks, inconsistent cash flow, huge administrative workloads for your team, and a poor patient experience.
Seamlessly connect the steps of your dental revenue cycle
A surefire way to make your revenue cycle flow easily is by partnering with revenue cycle experts.
We call this decentralizing your revenue cycle — certain steps of your revenue cycle are handled directly by seasoned experts in the dental insurance billing industry. They take several of these steps off your team’s plate, allowing them to focus on running your office, growing your dental business, and building stronger relationships with your patients.
When you work with DCS, for example, our RCM experts will handle 6 of the 7 steps:
- Patient scheduling
- Insurance verification
- Claim submission
- Insurance payment posting
- AR management
- Patient collections
When you get end-to-end revenue cycle management services from DCS, every single step we handle is going to work efficiently with the other.
This efficiency creates faster and steadier cash flow. It also gives your team the healthy, more peaceful work environment they deserve, so patients can receive the thoughtful patient care they expect. Your team will focus on tasks that require their attention at the front of the office, while our experts will take care of the background work.
Read more: 5 benefits of outsourcing dental revenue cycle management: Collect more and support your team
Get your copy of the 7 Steps of the Dental Revenue Cycle straight to your inbox
When you appreciate how your dental revenue cycle works, you can take steps to optimize it and get the cash flow you deserve.
Our 7 Steps of the Dental Revenue Cycle chart will remind your team how each step connects to the previous one, and how early steps impact later ones.
Fill out the form below, and the chart will appear in your inbox. Download and print the chart to keep at your front desk, as a reminder of your dental business’ revenue cycle and what it represents: your cash flow.
Maximize your revenue: Optimize your revenue cycle with DCS services
When your revenue cycle is optimized, all 7 steps work together to get you paid. This means seamless processes, no revenue leaks, a steady cash flow, and a confident, happy dental team — and satisfied, happy patients.
Our revenue cycle management services at DCS heal any broken steps in your revenue cycle, and lead you along the pathway to growth and success.
Collect what you’re owed from both patients and insurance companies and have the dental business you always dreamed of: Book a call with DCS today.
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