Effective July 2021, our best practice recommendations have changed, please see this Known Reporting Issues article for instructions. At this time, we do not recommend using the Applied Collections report due to power reports issues.
Once these issues have been resolved, we will again recommend this approach for paying providers.
Recommendation Below On Hold
The best report to use to pay providers on collections is the Applied Collections report.
Most practices that pay on collections do the following:
- Tighten their transaction locking (often 5 days or less)
- Understand the difference between applied collections (treatment has been paid and completed) and total collections (treatment has been paid only)
- Have a system to apply all unapplied payments both at checkout and end of month (often using the AR report)
- Recognize that different reports are needed for running doctors compensation reports vs. running a total collections report that reflects all the money taken to the bank (and their accountant has their P&L set up properly)
Customize the Applied Collection Report
Found in the Insights dashboard in the Billing/Collection box or in Power Reports, this is a pre-built report based on the applied date. This report shows all applied payments, applied credit adjustments, charge adjustments and Total Collection. You will use the Total Collections column as the Net Collections number to determine provider compensation.
- Add the Primary Guarantor name (if you want to show your providers the detail)
- Exclude any initial balance forward credit adjustments or other adjustments set to collection that you do not want to impact doctors compensation
- To do this: Add the subcategory field and exclude the adjustments that are simply transferring money between your legacy software and Ascend. Once this filter is set, you can remove the subcategory from the report and just retain the filter.
- Optional: *Create a calculated measure to reflect the percentage you’re paying your provider
*To create a calculated measure
- Right click on the Total collection blue box in the report - this brings up a window - select User Defined Measure
- Choose Create calculated measure - this brings up a window
- You can enter a Display Name (this will show up as the name of the column in your report) - I chose Doctor Comp at 25%
- Leave the format at Default and 2 decimal places
- In the right box, you can add *.25 to have it automatically take the total collection and multiply by 25%
- Click ok to save
Here is a sample of how this report looks when you add this column:
Now, you can name and save this report - and the 25% calculation will be saved each time.
Understanding Unapplied Payments
This Applied Collections report will show payments that have been applied to a procedure. This report does NOT include pre-payments made that show up as unapplied payments. So, if a patient pays you $5000 today for a procedure that will be completed next month, the dentist that completes the procedure next month will see that payment applied when a team member manually clicks to apply that existing payment to the completed procedure.
The benefit of having unapplied payments is that when you pay your providers, you are paying them on recognized revenue – meaning, the provider is paid when the work is both paid for and treatment completed. This approach also saves time and reduces complexity when patient or insurance refunds are required.
Best Practices with Unapplied Payments
This suggests that to make sure your providers are paid accurately your team must be regularly going through their unapplied payments and clicking to apply them. To learn more about applying a previously unapplied payment, read Applying unapplied credits in the Help Center.:
Best practices recommend that as each patient checks out after a visit, the team member handling their checkout should review their ledger; if they see a blue negative number under Unapplied Credits, they need to click on that number and apply the credit. (If the credit cannot be applied, clicking this number doesn’t hurt anything.)
In addition to performing this at every checkout, a second best practice recommendation is to run the Aged Receivables report at the end of the month, and assign a team member to go into the ledger for each patient that has an unapplied credit listed and click the blue negative number to clear out as many of these as possible.
By regularly applying pre-pays and running the applied collection report, you should be gathering accurate total collection numbers and paying your dentists accurately. Obviously, depending upon your dentist’s contract, you may need to customize a power report differently to meet your needs. Please call support for help with this.
How to Handle Patient and Insurance Refunds That Impact Doctor Compensation
If you are responsible for running reports to determine dentist compensation in Dentrix Ascend, you also need to understand (so you can explain to your doctors) how patient and insurance refunds should be handled.
For example, a patient pays $5000 for a treatment plan and the work is done and all $5000 is applied to the dentist who is paid 25% of collection, therefore $5000 x .25 = $1250. Next, a couple months down the road, the patient comes back in and is unhappy with something and the office agrees to refund the patient. This refund needs to come off of the dentist’s future collections.
Here is an example to show you how to enter adjustments correctly. Let’s say your patient had a crown done and paid for ($500 from the patient and $500 from the insurance), and then just a few weeks later, the patient is unhappy and wants a refund. The patient’s ledger shows that he has a $0 balance now, but the crown generated $1000 production.
To enter the refund, follow these steps:
1. Enter the patient refund charge adjustment. Click Charge (+) Adjustment. Choose Patient Refund as the type and set $500 as the amount. Leave the Payment date field value at the default [None]. In this case the patient or guarantor (it doesn’t matter) will receive a $500 refund.
2. Next, create another refund charge adjustment for the amount paid by the insurance company. Select the Insurance Over-pmt Refund charge type.
3. This results in new charges on the ledger that add up to the $1000 value of the crown.
4. Next, enter a credit adjustment. Click Credit (-) Adjustment. Choose the Credit Adjustment type in the amount of $1000 total. Manually edit the Applied amounts for the two refunds.
This results in the ledger going back to its previous balance. In the reports, however, the production decreased and the collection decreased as well.
This impacts provider compensation on the next payroll when you use the Applied Collections Report. The patient refund charge adjustment will reflect in this report, and that reduces the collections for the dentist. The patient refund charge adjustment will show up in the blue column labeled Charge Adjustments.
With this approach, you do not need to audit for refunds. The refund will be accounted for in your Applied Collections Report.
To increase accuracy, train your team to edit PPO fee schedules when they identify that the insurance estimate is wrong. For example, when your team enters insurance payments, ask them to notice when the payment is different from what automatically is populated on the line item. If they see a difference in what the PPO’s covered fee is, then have them edit the associated fee schedule so that future procedure codes will show up with the correct insurance estimate.
How unapplied credits work with this applied collections report approach
By using the applied collections report to calculate compensation for your providers, our unapplied credits work seamlessly with this approach. When you apply a previous payment (or even part of a previous payment) in the ledger, this amount will be displayed in the applied collection power report. It is important to know that there is no indicator of the applied date in the payment or in the ledger, only in the applied collection report. This approach works even when the original prepay was collected in January, the procedure completed in February – but then the prepay was applied in April. There is no way to apply a payment in the past, so this applied amount will show up on the most current applied collections report – and the doctor that did the work back in February will be compensated appropriately.
Why pay dentists on collections using the applied collections report and not the day sheet?
It can be confusing for an associate dentist to look at "applied payments" on the day sheet and then the "applied collections report" and see two different numbers when the language seems similar.
The reason for the difference is based on the dates used:
- Day sheet: Based on transaction date
- However, the Estimated Net Production number is based on service date
- Applied collections: Based on applied date
Also, the day sheet includes payments that were entered and applied to charges within the date range selected when you run the day sheet. A payment applied to a charge outside the date range of the day sheet report, will be included in unapplied on the day sheet.
To clarify the difference in these dates, let’s use an example:
Let’s say a $100 payment was entered 8/20/18 but entered as an unapplied payment. You will see this on the day sheet as an unapplied payment, and this will never appear on the day sheet again under the doctor because the day sheet deals with transaction date. If you run the applied collection report for that doctor for that day, you will not see this $100.
Now, let’s say that $100 was applied on 9/20/18 to the procedure and the dentist, you will see this $100 on the applied collection report. However, if you run the day sheet for this day, you will not see the $100.
This would suggest that if the day sheet were used for doctor compensation, the dentist may be underpaid.
To see this difference, run a collections detail report with both the transaction date and the applied date – and then take turns filtering on each of these dates. You can see side by side the applied date vs. the transaction date – and you may see that the transaction date is earlier than the applied date.
So, if a patient prepays, that would be one reason that you would see a transaction date (date the patient prepaid) and then a different applied date (date this was applied to a procedure).
You can see how the transaction date and applied date are different in this report:
As you are reviewing this applied collections report for paying your providers, you may also want to confirm the transaction locking dates are limited to avoid backdating as well.
Also – by only using day sheet, this will not take into consideration the patient refunds. Here’s why:
Let’s say the patient paid $500 for a crown (total fee $1000) on 6/1/18 - and let’s say this was a same day treatment and payment, so it was entered as a transaction and applied same day. This $500 will show on both the day sheet and the applied collection report.
Now, a month later, on 7/1/18 – let’s say the insurance overpays – and they pay $600 (we expected only $500). And, let’s say that same day we issue a refund to the patient of $100. On the day sheet, we will see $600 in applied payments for the doctor, but the $100 refund will show up under charge adjustments – and therefore it did not get factored in that really the dentist should have been paid $500 only.
By using the applied collection report for that day when the insurance paid $600 and the patient refund of $100 was processed, then we would have captured both these transactions and the dentist would have only been paid on $500.
In this example, by paying your dentist off the day sheet, you would have overpaid the dentist.
So, if you are the owner of the practice and you are explaining to your dentists why you use the applied collection report to determine their compensation, there are a few reasons:
- To make sure you receive payment when patients pre-pay
- To handle refunds fairly
- To provide a single report including patient names that can be confirmed for accuracy in order to build trust and transparency
Comparing the Provider AR Totals Report to the Applied Collection Report
Many offices want to compare reports to make sure their numbers are accurate. The Applied Collection report uses the applied date and the Provider AR Totals report uses the modified date (which matches the applied date) - the collections for providers in two reports will match as long as you select the same timeframe.
Comparing the Provider AR Totals Report to the Deposit Slip
The Provider AR Totals report (using modified date) does not match the Deposit slip (even when selected to run on modified date). The reason is that the Provider AR Totals includes all revisions, while the Deposit Slip just looks at the most current value, it does not reflect all revisions. Another reason is that the Deposit Slip report is based on the entry date of a payment while the Provider AR totals report looks at the application date of the payment. These reports serve different functions and are not intended to match. The Provider AR Totals is best for paying providers on net production or net collection, while the Deposit Slip is best for tracking money deposited into the bank.
To do after reading this article:
- Check the transaction locking date – Confirm this is set to 5 days or less
- Check the ledger options adjustments – Confirm the collection-related adjustments
- Confirm the initial credit balance forward – if this is set to impact collection then we will need to exclude that from the doctors compensation report
- Get a copy of your dentist’s contract to identify any special cases for compensation
- Build your doctors compensation report using the Applied Collection report
- Exclude the initial credit balance forward adjustment
- Be sure to use transaction date
- Include guarantors to show the provider detail on who they were paid for
- Rename this report in Ascend – save in My Reports
- Also, create a folder in excel – save for that payroll date
- Set a reminder in your calendar for end of month to run your audits – refer to this article as needed
- Understand the items that impact the accuracy of this report
- Run the AR and for all patients with unapplied credits – click Apply credits in the ledger
- Do not edit existing payments or adjustments – always enter a separate entry to avoid moving dates
- Insurance overpayments will pull a prior guarantor payment into an unapplied status – reduce this from occurring by fixing PPO fee schedules when EOB’s are returned
(Article authored by J. Alldredge, J. Nesbitt 2017 - Updated 2021)