My View: Electronic fund transfers: Now is a better time than ever

Amy Adair, D.M.D.

As dentists, our lives have been rocked by this global pandemic. We are re-evaluating every aspect of our business, from updating clinical protocols to streamlining administrative systems. We are creating our new normal in our dental offices.

I am a relatively new business owner, having purchased a solo pediatric dentistry practice a year and a half ago in Burke, Virginia. To make a smooth transition for patient care, I enrolled in the same three insurance companies as the retiring pediatric dentist. I also enrolled in the respective electronic fund transfer transactions, also known as automated clearinghouses. These are transactions in which insurance companies directly deposit claim payments into the business’s bank account. My experience has been that the initial application for electronic fund transfer enrollment can take around four to six weeks, but once enrolled, it is a very smooth system.

After purchasing the practice, I learned that some out-of-network insurance companies would pay for services via check or virtual credit card. Checks take time to process and virtual credit card payments cost our business money to process (credit card fees). In this day and age every penny counts, especially as credit card fees continue to rise.

On March 17, our office followed the recommendations from the Virginia Dental Association and elected to postpone routine and elective care until further notice. Like many others, I had to furlough my staff. It was a deeply upsetting and emotional time for all of us. During this phase of winding down and ceasing operations, there was still a significant amount of administrative work to be done. Patients needed to be notified of canceled appointments, mail was coming in, insurance claims and payments needed to be processed and accounts receivable needed to be addressed.  

To help with these overwhelming tasks, I arranged for my administrative assistant to work from home on a limited part-time basis.  Efficient systems were of utmost importance. As one can imagine, processing a check received at the office and having your administrator process it remotely is not impossible, but it does take a lot of administrative gymnastics. Fortunately, most of our insurance payments were received via electronic fund transfer, minimizing the steps involved in processing payment. This was one system we did not have to alter as a result of the pandemic!

If you receive insurance payments via check or virtual credit card, now might be a good time to consider enrolling in electronic fund transfer transactions. This will eliminate waiting (up to two weeks) for a check to be mailed to you and be processed. You can also eliminate credit card transaction fees if your business processes virtual credit cards. Not to mention, you can reduce the risk of fraud. Your earned money will be deposited in your bank account faster and with fewer hassles.  

Nacha, the steward of the automated clearinghouse Network, recently did a case study on my practice, and in the process, I learned several key facts about electronic fund transfer insurance claim reimbursement:

1. Based on the 2019 CAQH Index, while 80% of dental claims are submitted electronically, only 13% of claims are paid electronically. That is well below the medical industry figures of 96% and 70%, respectively.

2. The index estimated that full adoption of electronic administrative transactions could save the dental industry $3.4 billion annually, of which $2.9 billion would come from dental providers.

3. Signing up for electronic fund transfer payments is an option for several dental insurance companies, regardless of your network participation.

4. Some insurance companies may include a “red carpet services” contract in their enrollment application which is often a small percentage of the payments. You are not required to pay for these additional services if you do not want them. Instead, you can request to enroll for electronic fund transfers without those extra service fees. (It may be some extra paperwork up front.)  

5. Most banks do not charge a fee for receiving automated clearinghouse payments, but you should check with your bank.

6. My experience has been that the turnaround time for electronic payments is typically 48 hours. Therefore, your administrator can quickly track if a payment is not made and check on its status.

Now, more than ever, we cannot afford to wait for insurance claims to be processed and paid. Electronic funds transfers allow dental practices to receive payments faster and more securely, ensuring that we can keep up with payroll and the myriad expenses associated with our operations.

Dr. Amy Adair is a pediatric dentist practicing in Burke, Virginia.

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