Insurance reimbursements have always been a contentious issue for dental practices; they are notoriously complex and tricky to navigate. Recently, instead of electronic fund transfers or traditional checks, insurers have started to offer credit card payments. Sound convenient? Actually, this can prove a costly trap for dental practices and should really be avoided.
Here are 3 reasons why an accountant for dentists in Miami would likely advise your dental practice not to accept credit card payments from insurers:
- Processing fees could harm your bottom line
With fees of between 2 and 4%, credit card payments can directly lower your reimbursement, which in many instances, will already be discounted. When multiplied over a year, your dental practice could find itself giving away thousands of dollars in fees.
- The administrative burden increases
Typically lacking remittance information that’s detailed enough, credit card payments could see dental teams spending many extra hours chasing payment details; trying to reconcile payments and align them with Explanation of Benefits, or EOBs.
- Fraud exposure is increased
There are a number of compliance and security risks involved when dental practices accept credit card payments. PCI compliance requirements are introduced and the businesses exposure to fraud is increased. EFT, on the other hand, offers practices who prefer to receive electronic payments, a safe, industry-standard solution.
How can dental practices opt out of credit card payments?
If your dental practice wishes to opt out of credit card payments from insurers, there are a few steps you should follow:
- Contact your insurance provider
Reach out to the payers department for provider relations and request check or EFT payments, instead of credit card. Note that accepting a payment from an insurance company via credit card is not a legal requirement for dental practices.
- Submit a request in writing
In most instances, insurers will ask for a formal email or letter stating your payment preference.
- Enrol in EFT programs
The majority of insurers enable practices to sign up for secure direct deposits by way of online EFT enrolment.
- Keep all records
It’s important to document everything so that should you need it in the future; you have records of your requests and confirmations.
The last word on EFTs
It’s worth being aware of the fact that insurance EFTs may also come with a set of issues, and you’ll need to ask yourself whether your practice is prepared to come out of paper checks and virtual credit cards. Let’s look at some of the pros and cons of choosing EFT payments and checks:
- EFT is undoubtedly safer and unlike checks, there is no waiting time during which they may be misplaced. Checks can still be received by the practice, but EFT can be selected as a preferred method of insurer payment.
- Dental offices may struggle to track check payments, while software systems help payments be marked as either EFT or electronic.
- EFT and check numbers must be kept separate for the accurate reconciliation of deposits, and precision of financial records; practices must seek help from dental bookkeeping in Miami to find the ideal approach.
- The ADA EFT enactment lists extensive training, issues, steps to begin accepting EFT payments, make necessary banking arrangements, put changes to software into place, and enrol with payers for a smooth, stressless implementation.
Consulting with a local firm who provide specialist bookkeeping and accounting services for the dental industry, is the best way to determine whether your dental practice should accept credit card payments from insurers.