Transferring Money between Dentists After a Re-do

Occasionally, a dentist will complete treatment for a patient and that patient is unhappy with the result and demands a redo—from a different dentist in the practice. Or, perhaps one dentist completes treatment for a patient right before a lengthy vacation and then a crown fails and the practice philosophy is to provide warranty treatment for recare patients, and another dentist must handle the redo.

In situations like these, we need to make sure that each dentist is paid fairly; and often, this means that one dentist will be paid less (generally the original treating dentist) while another dentist (generally the one providing the redo) will be paid more.

To accurately handle this situation in a patient’s ledger, follow these steps, keeping in mind that production (the fee for a procedure) may not always equal what was actually collected: 

Step 1: Adjust the collection off the original provider

In the patient ledger click Charge (+) Adjustment and select Patient Refund as the type. Assign the charge adjustment to the original provider. You will need to set the payment date to none in order to change the provider. Make a note referring to the original date of service and original provider, explaining this is a redo, for example “Crown redo - original dos 11/1/17 by Dr. Smith. Redone by Dr. Jones – prep crown on 11/7/17 – Initials”. 

Now your ledger will look like this:

Step 2: Adjust the production off the original provider

Click Credit (-) Adjustment and choose Credit Adjustment as the type. Enter in the same amount as the original procedure and make sure it is applied to the Patient Refund listed under Description. Again, enter your notes regarding the redo.

Now your ledger looks like this:

We have removed both the production and collection from the original provider with these first two steps.

Step 3: Charge out the production on the new provider

To do this, charge out the treatment on the ledger for the new provider redoing the work. Click Procedure (+), choose the new provider and the procedure code. Toggle Bill to Insurance to Off because you don’t want to have an unattached procedure hanging out there. Again, add your notes about the redo.

Now your ledger will look like this:

Step 4: Increase the collection for the new provider

Click Credit (-) Adjustment and choose Offsetting Adjustment from the list. Make sure the offsetting adjustment is applied to the procedure just completed by the second provider. For the last time, add your notes regarding the redo.

 Now your ledger will look like this:

This process will appropriately adjust both production and collection numbers for both providers. This results in the production and collection numbers being accurately represented without any additional auditing to see the changes.

Now, to see how this impacts the original treating dentist’s compensation:

• If this dentist is paid on collections: Step 1 Adjusting the collections will show a charge adjustment on the Applied Collections report and reduce the total collections number.
• If this dentist is paid on net production: Step 2 Adjusting the production will show a credit adjustment that reflects on the day sheet report and reduces the net production number.

Similarly, the dentist redoing the treatment will see their compensation change as well:

• If this dentist is paid on collections: Step 4 Adjusting the collections will show a positive credit adjustment on the Applied Collections report and increase the total collections number.
• If this dentist is paid on net production: Step 3 Adjusting the production will show a procedure charge that reflects on the day sheet report and increases the net production number.

Handling these transactions inside a ledger can be complex—and directly impact dentist compensation. Practices may want to set up a protocol that only the office manager or insurance manager is allowed to handle these type of transfers. As part of this protocol, having the original dentist approve the redo by another dentist can avoid financial frustration and bad blood between colleagues.

(Article authored by J. Alldredge, J. Nesbitt 2017)