This is why it is critical for the dental practice to have a consistent naming system to help track the adjustments. This may seem like a small detail, but it is the one of the best ways to start understanding your write-offs, so you can make the necessary changes to increase profitability.
When you review your adjustments report you should be able to see what the adjustment was for just by looking at the name of the adjustment. If all of your insurance adjustments use the “insurance write-off” adjustment, it doesn’t give you enough information to understand the specific amount per insurance company.
Here are some naming suggestions for different types of adjustments.
- Insurance Adjustments – These need to include the name of the insurance company, for example Delta MN Adjustment. This will help show you where the bulk of your insurance write-offs are coming from, and understand which insurance companies are the most profitable.
- Marketing Promotion Adjustments – Each short-term marketing promotion should have it’s own unique name, for example Winter 2014 Whitening Promo. This will allow you to do analyze the effectiveness of your marketing promotions, and help you determine what is working and what isn’t.
- Discount Adjustments – Many practices provide special discounts based on a specific circumstance, each of these should have their own specific name. For example, Friends and Family Discount.
- Misc. Adjustments – It is best to use the generic “Misc. Adjustment” label in your dental practice software as little as possible. If you do need to use it, make sure to include a note as to why the adjustment was given. The note needs to be detailed enough so that anyone that reads it can understand the situation.
This is another one of those assumingly simple processes that goes a long way. Unfortunately, in a busy dental practice it is easy to skip this step. That is why it is critical that the team is not only trained in your specific process of naming adjustments, but that they also understand why it is important.
Don’t be afraid to have multiple adjustment types in your dental practice software. The more detail you have, the more information you will have to base decisions on to help the profitability of the practice.