To ensure you’re collecting all income that is due to your office, your staff will want to stay on top of past-due balances, and when necessary, may choose to send patients to Collections for nonpayment of their Past-Due Balance. In this post, we’ll explore how to track and manage past-due balances and different options for handling delinquent accounts.

Aging of A/R Report

The first, and arguably most important, step in staying on top of past-due accounts, is to ensure you regularly run the Aging of A/R Report. The report will show you the various age of accounts, including any balances over 90 days old. The report can also be filtered to include balances over a certain age (e.g., 90 days) or only certain Billing Types.

If you reassign delinquent accounts to a different Billing Type, which we cover later in this blog post, you can run the Aging of A/R Report for accounts Over 90 Days without a bad debt Billing Type (e.g., Standard Account). This will help you easily find newly delinquent accounts that need to be followed up on or reassigned a Bad Debt Billing Type (e.g., Precollections).

Generate Bills

Your patient should be notified of any balance before it becomes past due, so regularly generating and sending statements is also important. For more on this process, see our Monthly Billing post.

In Billing Options, your office can set up default Dunning Messages to appear on Statements once accounts are over a certain age (e.g., (90 Days). If you reassign patients to a new Billing Type (e.g., Bad Debt – Precollections), Dunning Messages can also be applied by Billing Type.

Assign Billing Type to Accounts

If managing past-due balances or Collections manually or through a third party other than TSI, you may want to manually assign Collections or Precollections accounts a unique Billing Type to more easily run reports and the Billing List for these accounts going forward.

Create Billing Types in Setup, Definitions, Billing Types.

To change a patient’s Billing Type, from Edit Patient Information:

Third-Party Integration

Transworld Systems Inc. (TSI) Collections

Transworld Systems Inc. (TSI) is a Collections Agency that is integrated with Open Dental. Your office can sign up for TSI’s services and set up the interface in Open Dental to send past-due accounts to TSI, manage accounts, and accept payments directly through TSI.

When using the TSI integration, you will set up a Billing Type for us with TSI, but don’t assign the Billing Type to accounts manually. The Billing Type will automatically be assigned when past-due accounts are sent to TSI. Once past-due accounts are sent, TSI will begin managing billing and collection activity.

Trojan Express Collect

Trojan Express Collect Bridge can be enabled if your office is signed up for Trojan’s service.

Trojan will send a letter on the office’s behalf, but payment is still directed to be made to the office; it is not collected by Trojan. After a letter is sent, Trojan will report the consumer to the credit bureaus after 30 days with no payment.

Manually Collecting Balances

Generate a Bill with a Dunning Message

As we mentioned before, you’ll need to generate bills to let your patients know they have a balance. Before you send them to Collections, you’ll want to send them a final bill with a Dunning Message letting them know their balance is past due.

Send a Letter

Along with the statement, you may also want to send your patient a letter advising them of their past-due balance and if/when it is in danger of being sent to Collections, along with any additional details. Your office can easily customize a Patient Letter sheet and generate and print it from the patient’s account using the Letter button in the toolbar.

Change Billing Type

Once you’ve sent the patient a bill notifying them of their past-due balance and Precollections status, you can change their Billing Type to easily track and manage their account.

TECH TIP: If you want to prevent patients from scheduling an appointment once their Billing Type is changed (e.g., to Precollections or Collections), set up Automation to restrict appointment scheduling. You can also manually restrict appointment scheduling from the Edit Patient Information window. If you want to simply prevent a patient from appearing on the Recall List, you can disable the patient’s Recall, from Edit Recall either until their balance is paid or until it’s manually re-enabled.

If the patient makes a payment and no longer has a past-due balance, make sure to change their Billing Type back.

Sending to Collections (Non-TSI)

If you have sent multiple statements and letters to your patient, and have either not received a response, or have not received payment or worked out a repayment plan, you may decide to send your patient to a Collections Agency that will take over the debt. In this case, you will need to zero out the debt on the patient’s account.

Create a new Adjustment Type by going to Setup, Definitions, Adj Types. The Adjustment Type should be a Subtraction (-) type.

In the patient’s account, click Adjustment, enter the amount being sent to Collections, and select your new subtraction adjustment.

The patient’s balance will be reduced by the adjustment amount.

If tracking accounts by Billing Type, you’ll want to update the patient’s Billing Type to indicate they have been sent to Collections.

Once all is said and done, the patient’s account should look a little something like the screenshot below.

Collection Agency Fees

Documenting Collection Agency fees should not be done in the patient account, but instead in your account software (e.g., Quickbooks or Open Dental’s Accounting Tool) similar to how credit card processing and other administrative fees are tracked.

If you would like to notate Collection Agency Fees or other information for informational purposes, this can be done in a Commlog.

Collections Payments

If Collections payments are returned back to the practice after the balance has been zeroed out, there are some extra steps to take that differ from a normal payment. Your practice may wish to reach out to an account or other financial professional to understand the best steps to take for your practice.

Non-TSI Payments

If your office is not utilizing TSI for collections payments, once you get a payment for a balance that was previously zeroed out for Collections, follow these steps to enter the payment into the patient’s account.

1. Enter an Addition adjustment matching the payment amount.
   • You may want to create a new adjustment type (e.g., Collections Recovered).
2. Create a payment for the payment amount.
3. Attach the payment to the new adjustment.
4. Repeat the steps for any additional payments you receive.

The payment and the adjustment should zero one another out.

If the payment was received directly from the patient, you may need to reach out to the Collection Agency regarding any fees they are due from the payment. Track those fees in your accounting software accordingly.

TSI Payments

Payments made for accounts managed by TSI, are entered into Open Dental using the Payment button in the Account Module, just like a normal payment. If an account is managed by TSI, you’ll get an extra prompt when clicking the Payment button asking if the payment is directly from the guarantor or from Transworld (TSI).

For detailed steps on handling these payments, see our user manual. If the payment was made by the guarantor directly, payment information will be sent to TSI directly from Open Dental at the regular send time.

Now that you have all of the tools, you can start effectively managing your past-due patient balances to try to recover payment or send the balances to Collections for management by a third party as needed. As always, if you have questions, contact us. Our Support Technicians are here to help.