How Dental Insurance AR Gets “Cleaned” Without Getting Collected

Your insurance AR report can look perfect while your practice quietly bleeds money. I’m Erica Aguilar, and I’m pulling back the curtain on the uncomfortable truth: “clean” dental insurance accounts receivable can be manufactured, and the prettiest numbers on your aging report might be the biggest warning sign.

We walk through a real-world story of “Biller Betty” and the fast moves that make an insurance AR cleanup look successful without improving collections at all. I explain the three biggest red flags I see in dental billing and revenue cycle management: heavy adjustments disguised as contractual write-offs, shifting denied balances to patient responsibility instead of appealing, and deleting then recreating claims to make them look fresh. That last one is especially dangerous because it wipes out your original claim submission date, weakens your prompt pay position, and can trigger timely filing problems.

Then we get practical. I share the performance percentages I want you monitoring so you can run your billing department like a business: what healthy 0 to 30 day insurance AR can look like, how to keep older buckets from getting heavy, and how to audit any “cleanup” by separating what was actually collected from what was adjusted or shifted. We also talk denial strategy, appeals, when to involve the insurance commissioner, and the 24-hour, 48-hour, and seven-day follow-up system that prevents claims from aging just because they never truly landed on file.

If this helped you, subscribe, share the episode with a practice owner or biller, and leave a review so more teams stop trusting “clean AR” and start measuring real performance.

Would you like to set-up a billing consultation with Ericka?  She would love the opportunity to discuss your billing questions and see how Fortune Billing Solutions may help you. 

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Transcript

Welcome And The Clean AR Myth

SPEAKER_00 0:00

Hey friends, welcome back to another episode of the Dental Billing Podcast. I'm your host, Erica Aguilar, and I want to talk to you about clean insurance AR and how it could be lying to you. So I'm just going to go ahead and say it. Clean insurance AR can be completely misleading if you don't know how to look at it. And I know this might catch some of you off guard, especially if you're looking at your numbers right now and thinking, we're good. My insurance AR looks clean and my team is handling it. Maybe you're right, but maybe not. Because I have been doing this a long time, and I can tell you with confidence, a clean AR report does not always mean your billing department is performing well. Sometimes it just means someone knows how to make the numbers look good, and those are not the same thing. So I want to tell you a story. I'm going to go into story time, and we're going to call this biller Betty. So Betty the biller. Betty just got hired at your office, and your insurance AR is a mess. Claims have been sitting in the 90 plus day column for who knows how long. Denials have not been touched. We need to appeal denials, friends. We've got missing narratives. The whole thing feels overwhelming. And you're just kind of looking at this insurance AR, going, what am I going to do with this? And Betty knows this. She also knows you're watching. So Betty has a goal. She wants to look like a hero fast. Remember, you just hired her. Not six months from now, not after doing the real work. She wants you impressed in 30 days. So how is Betty going to accomplish this? Well, the first thing she's going to look over is your 90 plus day column because that's probably what is stressing you out the most as the owner. We need cash flow flowing, right? So when we see insurance, AR, and that 90 plus day column like just skyrocketing and getting bigger and bigger, it's going to keep you up at night. That's the number that makes you feel like everything is broken in your billing department. And for those of you that are new listeners, I am huge on treating your billing department like a business within a business. And so you're going to hear me say terms like billing department, when a lot of you are going to scratch your head and go, I didn't even know I had a billing department. And just a side note, every business has departments, whether you're a small business or you're Microsoft, you have a scheduling department that has key performance indicators that tell you how well you are managing your schedule. So in our case, we have a billing department, and we need to treat this billing department like a business. So that's where Betty's gonna come in and be the hero. Betty decides that your 90-plus day column, that number has to go, but not by collecting it, by removing it. So the first thing that she's gonna start to do is make some pretty egregious adjustments. And she is gonna label them as insurance adjustments or contractual write-offs just to get this cleaned up. And just like that, your 90 plus day column starts dropping. You may start to feel some relief. You think finally somebody is fixing the problem. But what actually happened? Nothing. The money just got buried. Nothing happened. Now Betty's gonna take it a step further. And the reason I want to go over this with you guys and tell this story is because I want to open your eyes to the ways that people cover up performance, which is why it's so important as a practice owner that you are monitoring the performance of your billing department every week. You should be running numbers. Now, another way that we get quick wins in AR cleanup is to move balances from insurance responsibility to the patient. So now your insurance AR is going to drop even more and it's gonna look like progress, but all Betty did was shift the problem. And I see this happen a lot where something was denied and we are in this AR cleanup mode. And instead of fighting for the insurance to pay for the benefits that the patient is paying for, instead of advocating for the patient, we just shift the problem over to the patient and say, insurance didn't cover it. And now we have our front office having to have those awkward conversations about how the patient owes money rather than how we should have addressed it with the insurance company. So that's another way that AR cleanup can be misleading because we're not putting the work in. We are just shifting the problem. Now, here's where Betty is gonna get really strategic. She starts looking at old claims, the claims that are sitting in 90 plus, claims that make your report look really bad. But Betty knows a trick. She deletes the claim and recreates it. And I've seen this happen time and time again. And I literally just had this conversation with one of my followers, and she texted me and said, Hey, is it normal to delete claims when you are doing AR cleanup? And I said, Absolutely not. No claim should ever be deleted, it should get closed out if it was denied. And then actually, it shouldn't get closed out until you have gone through all the motions of trying to advocate for your patient, right? And I don't want to get into all of those ways in this episode. Right now, what I'm trying to do is just open your eyes to the different ways that people clean up AR. So in this case, Betty is deleting the old claims to resubmit them, make them fresh. And now that old outstanding claim is no longer sitting in the outstanding claim report, right? So I find it to be very dishonest and very misleading because not only are you misrepresenting the performance of how we are measuring progress, right? So that's not going to be accurate. We are also going to create a bigger problem because now we've wiped out the history. We don't have an original claim submission date because it's gone. The timeline is gone. Your leverage with the insurance company and holding them accountable to prompt pay law and paying prompt pay interest if it's owed to the practice, it's all gone. And now you're at risk of timely filing issues. Because remember, the insurance company has on file when we originally submitted that claim, they should. And not only did we not fix the problem, we actually made it harder to get paid. So what we are doing is overlooking running our billing department like a business. Friends, performance percentages matter. And you guys have heard me talk about this in other podcast episodes, but your zero to 30-day insurance AR column should be performing at 92%. If your zero to 30-day column is performing at 100% or even higher than what is owed to the practice, that is not normal. That means that somebody's engineering those numbers. When you are looking at your insurance AR report, it is not a reflection of the biller. And I want to say that again for the people in the back. If that made sense, I'm it makes sense in my mind, but I hope that made sense to you as well. So what I'm trying to say here is the reason why I have yet to find an office that is performing at 92% or better, meaning that 92% of the claims that we are submitting are getting paid before the 30th day. The reason why I have yet to find an office that is performing at that benchmark is because we cannot control how slow or fast or whatever denial strategy, tactic, delay strategy that the insurance company is imposing on us as an office, right? However, we can control our follow-up strategies. We can control the strategies that we utilize in order to teach the insurance companies that we don't play to advocate for the patient, right? Like a lot of you need to learn how to incorporate the power of the insurance commissioner and start filing complaints so that insurance companies can be fined for this bad faith, I don't know, bad faith behavior. The bad faith denials, the unreasonable denials, the denials that make you scratch your head. You guys, insurance companies designed it that way because they know that you're not gonna appeal. If you're not gonna appeal, you're never gonna take it and file a complaint to the insurance commissioner. And it is the insurance commissioner's job to regulate, to govern over these plans and make sure that a certain percentage of the premiums that they are collecting are being paid to treatment, or they're paying claims and issuing checks to our providers so that they are not imposing financial burden on our patients for offices that get one denial and then just quickly transfer that balance over to the patient. It is our job to advocate for our patients. They rely rely on us to do that. And it just absolutely frustrates me when I see a biller, a lazy biller, in my opinion, who just says denied and transfers the balance over to the patient. That's not advocating for your patient. And if you don't believe that you should be advocating for your patient as a dental biller, then you should not be a biller. I'm just gonna say it. So in real life, okay, real life billing, claims don't all pay perfectly in 30 days. And so when I see a messy insurance AR report that has an astronomical number in the 90 plus day column, and suddenly within let's just say 45 to 60 days, it is cleaned up. I want to know what percentage of that reduction in the 90 plus day column, what percentage of that was actually collected? So I'm gonna run a collections report, a deposit report. I want to know what what did we do? What buckets does this cleanup fall into? What was actually collected, what was adjusted or written off? And finally, what what all how many actually claims were originally in that 90 plus day column? And how many do we have now? But I really want to put it into different buckets. So if we look at our insurance AR more strategically, if we really hone in on the performance percentages, which I didn't finish talking about earlier. So let me go back and let me go over the performance percentages. So you can write this down and then you can go back to your office and determine how you are performing as a billing department. Your zero to 30 day column should be performing at 92% or better. So you're gonna take the total amount of insurance money owed to the practice, divide that by the total amount of insurance money owed to the practice, move your decimal over, and that's gonna give you your zero to 30 day performance percentage. Your benchmark and goal is to be at 92%, but I have yet to see an office that's there, especially with AI processing our claims and just not really understanding the billing game just yet. I mean, and you guys know we're getting denials for ridiculous reasons. So that's your zero to 30 day column. 60 to 90 day, and talking insurance AR, should be not be heavier than 5% of all insurance money owed to the practice. So again, you're gonna take that total amount of insurance money owed to the practice, divide it by the take that amount in that column, divide it by total insurance money owed to the practice, move your decimal over, and you will have your 60 to 90 day performance percentage. The final one is what I refer to as the red zone, and the red zone should not be heavier than 3% of all insurance money owed to the practice. I have seen offices that have less than 3% owed to the practice, and that's great. But guess what? That doesn't mean that their zero to 30 day column is healthy either. Because again, these things can be manipulated. And what you're doing when you are monitoring your performance percentages when you are having your monthly billing meetings, because hopefully you are. You're having a monthly billing meeting and you're talking about where we're at with the insurance AR benchmarks, and that is going to allow you to understand what's going on with insurance. Do we have a lot of slow payers in the mix? Are plans that are taking forever to pay us, clogging up our AR? We don't have a lot of patients attached to that plan. Why are we still contracted with that plan? So it can really open up a whole different type of conversation when you're looking beyond just that number. And again, I really want to emphasize like this does not mean that you have a bad biller. It just means that we have to look at our insurance AR report a little more strategically. And we've got to play better defense because insurance companies are fighting fire with, I don't know what we're using. Like, I know we're not fighting fire with fire, that's for sure. I do workshops all over the country, and when this topic comes up, it is mind-boggling to me how many people really don't even understand how and I'm gonna share a fun fact with you in 2022, and I use this one because this number is shocking to me, and it has gotten worse since then. In 2022, 59% of denied claims were upheld because nobody bothered to appeal them. So if as a billing industry, okay, as a billing industry, 59% of our denials got upheld, were upheld because we didn't bother to appeal them. And insurance companies know this, right? They take notice of stats just like we should be taking notice of stats, but as an industry, we just fail to do that. And this is why I know that the reason insurance companies win at the denial game is because of a stat like that. 59% of our denials are upheld in any year. And ever since then, I think we're in the 40s right now. I think we're like 43%. Xperian releases report that I read every year, and I use this data in my workshop. So it's called the State of Claims Report. And this report surveyed the report is as a result of a survey. So they survey 250 healthcare providers every year. And the focus for the past, I'd say, three to four years has been denial patterns with medical, dental billing. It's just a wide range of health care. So that's why I said earlier, as a billing industry, as billers, we have to do better because we've got to change that stat to, you know, way lower number than 59%, 43% of our denials are being upheld. That is absolutely unacceptable. And that tells me as a seasoned biller, as somebody who has literally been doing billing since 1998. Some of you listening to this podcast weren't even born in 1998. So I say that because we have to do better as an industry. I've seen I've been sitting in the billing chair since 1998. I've been an office manager, I've been a practice partner, business partner in two practices. But one thing I have done consistently and the majority of my career has to it has been to sit in the biller's seat and sit there and stare and bill and and build each procedure over and over again. I've read contracts, I have worked directly with insurance dentist reviewers, and I I still I feel like because of these stats, insurance companies get to laugh all the way to the bank. And where does all of this stem from? It stemmed from the fact that we have very dishonest billers in the mix, we have individuals who want to look like the hero, and they're willing to do things like clean up your AR and mislead you to believe that A, it's not collectible, so they're just gonna write it off, B, they're gonna delete claims and move them back into the zero to 30 day column, which makes it harder for us to collect, or they're going to transfer the balance over to the patient. And this is why your monthly billing meetings matter. This is why, if you are a biller that works for a practice, you should treat your position like a business and Send an end-of-day report to your doctor. Whether or not your doctor reads it, half the doctors that we do billing for you guys, and we do billing for offices all over the country. I will tell you, more than half of them don't open up the end-of-day report because they assume that one of their team members is reading it and their team members aren't reading it. And then patient AR goes haywire because in that report, we're also indicating who needs to get a statement because maybe the insurance didn't pay as much as we thought they were going to, but that's a whole other conversation. But you should treat your position like a business and send an end-of-day report outlining what you posted. Do any of these patients have balances? Treat it like a business and monitor your zero to 30-day performance percentage, your 60 to 90 and your 90 plus. If you really want to know how well your billing department is performing, I challenge you to start monitoring your performance percentages. I did a post like this on TikTok, and I think I had what literally had hundreds of people save and then comment back what their performance percent. Some people, well, the people with good performance percentages did, and the people with not so good performance percentages ended up just direct messaging me and asking for some advice on how they can improve. And to that, if you run your numbers and your numbers aren't where you want them to be, we need to start looking deeper beyond the number, right? Like beyond the amount owed to the practice. We really want to start dissecting whether or not we have slow paying insurance companies, maybe x-rays, quality, are they showing the reason for the treatment that can cause a lot of delays. One of the biggest things that we find when we are doing insurance AR cleanup, the first stage and where we start is the simplest place to start. And for us, that is just verifying that the claim is actually on file. So we have a 24, 48, and seven-day rule of thumb. So 24 hours, we ensure that the claim actually made it over to the insurance company, no later than 48 hours. So we're verifying that the claims that we submit today have actually been received by the insurance company. And then we follow up on each claim every seven days. So 24 hours, making sure that the claim made it, no more than 48 hours, and seven-day follow-up. So we're we have a tight follow-up checklist and we run that because one of the things that we have learned when we are doing these massive AR cleanup jobs is that most of the claims that have been sitting and aging, and now they are 121 days old, are sitting there because the insurance never actually received the claim because the clearinghouse says sent. And sometimes it even says received by the insurance company. But for some reason, there's a disconnect with some clearing houses that don't actually make it over to the insurance company. The claim just never made it, and that is preventable. But the challenge that I'm seeing, and this is a shift that I'm seeing also in the billing landscape in dentistry, is that we are short-staffed, and third-party billing is here to stay. But I will tell you, not everybody that wants to work from home is qualified to do so. And this is a whole other topic that I can talk about in another episode. But I will say this just because you have experience does not qualify you to work from home. There are other factors like discipline that we don't learn in an office, right? Like we don't get that discipline. This type of discipline is developed over time. And you cannot be one who suffers from shiny object syndrome because billing requires attention to detail. And if you are one that is easily distracted, you don't qualify to work from home yet. And I know that's a harsh reality. I can do another episode on that at another time. But the purpose of this episode, you guys, was really to open your eyes to some of the ways that we've seen people dishonestly clean up AR. And it is because they want to look good to the boss, right? You know, you've come on board, you're new to the team, and this AR, you've inherited a mess. But we want to ensure that A, we are advocating for our patients, and we are not allowing insurance to just take our patients' money and not pay for the benefits. So we can't advocate properly if we are deleting claims and recreating them because then we lose our leverage with the appeal, or if we have to go to the insurance commissioner to report this behavior to the insurance commissioner, right? So just wanted to spend some time, open your eyes, and let you know that if you have messy AR and you want to have a conversation around that, and you want to get some strategies and some tips on how to clean this up, we're the experts and we're happy to have that conversation with you. My team and I see messy AR every single day, multiple times a day. We know what it takes to get that report cleaned up. And if you are one person trying to keep up with the cleanup, sometimes it's beneficial for you to get some help around that because tracing and tracing old claims can be a job in of itself. And if you don't have strategy around that, then you are just going to be recycling debt or burying debt because it's very hard for one person to take on a big AR cleanup job. It requires a team. So with that being said, friends, I'm going to close this episode out. If you found value with this episode, could you do me a favor and share or leave a review? That really helps other billers like yourself finding. So, with that being said, friends, if you have any questions, you know how to find me. You can find me on TikTok. My handle is dental billing coach, same thing for Instagram. And I love having billing conversations over on those platforms. I will see you in the next episode.