Why Financial Institutions Should Help Dentists Go Electronic


Michael W. Kahn

After a day of filling cavities and fitting crowns, your dentist is entitled to be paid, and the easiest way is to make the entire claims process electronic. But with so many dental practices being fairly small, they could sure use a hand.

Financial institutions of all sizes should be at the ready to lend that hand.

“Dental practices are a major small business client segment for banks, and they should work with their dental practice customers to make sure they can receive and process electronic payments efficiently,” said Brad Smith, Nacha senior director, industry verticals.

Nacha participated in the first Administrative Efficiencies Summit last August at the American Dental Association (ADA). It produced a letter ADA sent to financial institutions, dental benefit plans and others in late January, noting that Nacha, ADA and the other signatories, “[seek] to promote correct implementation of electronic transactions that enable efficient claim payment and reconciliation—and by doing so reduce administrative overhead across the board.”

If financial institutions are equipped and ready to explain their role in the process and how they can assist dentists in moving to EFT, everyone stands to benefit from an easier transition to electronic payments.

“The dental practice is going to want help with enrolling for electronic funds transfers and in receiving the remittance information to know what the payments are for,” said Smith. “The bank should have remittance information services at the ready for all small businesses, including dental practices.”

Smith added this isn’t limited to big banks, and that “smaller banks should be able to provide these services, and can also differentiate themselves to their small business customers through personalized service.”

Dr. Dave Preble, senior vice president, ADA Practice Institute, would also like banks to acknowledge to dentists “certain pitfalls when it comes to dealing with the information you’ll be receiving electronically.” For example, Dr. Preble noted that “you still have a manual reconciliation process between the reimbursement and the accounts receivable. We need to have an automated solution coming from the practice management system vendors.” To that end he’d like to see banks work with those vendors to improve the information flow.

There’s real potential in getting dental practices on board with full adoption of electronic administrative transactions. The 2018 CAQH Index, released in January 2019, found that just 12 percent of dental claim payments were made via the healthcare standard EFT payment via ACH, compared to 63 percent of medical providers.  

“The dental industry made progress in adoption of electronic transactions, but continues to trail the medical industry significantly,” according to the Index, which found that from 2017 to 2018, “the savings opportunity increased by $600 million for the dental industry, to $2.6 billion.” It said “the greatest portion of the savings opportunity lies with providers,” a figure CAQH put at $2.1 billion for dental practices. 

One stumbling block is the size of the practices—often just a single dentist—which differentiates it from the medical industry. 

“We’re not talking about big corporate conglomerates in the majority of the market. We are talking about small ma and pa shops, and they don’t have the same administrative resources,” said Dr. Preble.

There’s also resistance from some dentists who feel the old system works fine, and if it ain’t broke why fix it? 

ADA recently had a pilot program with two dentists on its Council on Dental Benefit Programs. One was eager to embrace electronic transactions and had a staffer who he knew could make it work. The other dentist had an older staffer a little resistant to change, but he was willing to work closely with her. 

Both eventually were very successful in implementing the receipt of the transaction. When it came to the EFT, they had different ways of receiving information from their financial institution but it worked for them because it fit the way they were doing things.

Ultimately, ADA believes collaboration with Nacha and other concerned parties is crucial. A second summit is scheduled at ADA in June.

Chart of dental and medical claims