Dental Production vs. Collections: Where the Gap Actually Goes

Why the collection percentage depends on what it is divided by

Illustrative example: a practice produces $200,000 in a month at its own fees. Its PPO contracts require $40,000 in write-offs, so net production is $160,000. It collects $152,000. Divided by gross production, the collection rate is 76%. Divided by net production, it is 95%. Same practice, same month, same bank account. The first number is mostly a statement about fee schedules; only the second says anything about follow-up.

Timing distorts it too. Insurance money in October pays for dentistry done in August and September, so any single month compares this month’s production with earlier months’ work. A trailing three-month view smooths that. And the write-off date setting moves net production between months: in Open Dental, if write-offs post on the insurance payment date, net production for the day “will not reflect the write-off,” which, in the manual’s words, “may be very far after the actual procedure date.” Two people running the same report with different settings will get two different collection percentages.

We print no benchmark collection rate here. The comparison that matters is the practice against its own trailing months, computed the same way each time. A number that holds steady is information; a number that drops is a reason to open the reconciliation below.

A one-month production vs. collections reconciliation

The reconciliation answers one question: where did every dollar of net production go? Accounts receivable is the bridge. Open Dental’s Receivables Breakdown report shows the pieces in a row — production, adjustments, write-offs, patient payments, insurance payments — and the change in A/R they add up to. The same arithmetic works with any practice management system’s month-end reports.

• Gross production for the month, from the production and income report or the Practice Analysis.
• Adjustments by type, not as one total. Open Dental’s Daily Adjustments report filters by adjustment type; Dentrix Ascend’s Adjustment Summary groups adjustments by production or collection type.
• Write-offs, by carrier where the system tracks them.
• Collections, split into patient payments and insurance payments.
• A/R at the start and at the end of the month, split into insurance estimates and patient balances.
• Bank deposits for the month, and the revenue line on the CPA’s profit-and-loss statement.

Illustrative example: A/R starts the month at $180,000. Production adds $200,000, adjustments subtract $5,000, write-offs subtract $40,000, patient payments subtract $50,000 and insurance payments subtract $100,000, so A/R ends at $185,000. Every dollar is accounted for, and the useful question becomes narrower: which part of A/R grew by $5,000, and why? Then the second check: posted payments of $150,000 against the deposits. Card-processing fees taken before deposit, refunds and timing can explain a difference; a difference nobody can explain is a finding by itself.

Where the gap goes: one report for each piece

Once the month balances, the gap between net production and collections sits in a short list of places. Each one has a report, and each report is a work list only if someone owns it.

• Procedures never put on a claim. Open Dental’s Procedures Not Billed to Insurance report lists completed procedures with an insurance estimate and no claim, and the manual says every procedure on it “should either be billed to insurance or marked Do Not Bill to Ins.”
• Claims created but never sent. The Claims Not Sent report lists claims without a sent status. A claim on this list cannot be paid, and it ages while it waits.
• Claims sent and not paid. Open Dental’s manual points offices that want to follow up on older claims to the Outstanding Insurance Claims report rather than the Insurance Aging report; it tracks claims sent but not received and can assign them to a named user.
• Insurance that paid differently than billed. On the electronic remittance, each reduction carries a claim adjustment reason code. X12, which maintains the list, says the codes “describe why a claim or service line was paid differently than it was billed.” CO-45 — charge exceeds the fee schedule — is the contracted write-off; a denial is something else, and posting it as a write-off hides it.
• Patient balances after insurance. The aging report’s over-90-day column, read by patient balance rather than as one total.
• Adjustments under the wrong name. A courtesy, a small-balance write-off or a denied claim posted as a “PPO write-off” makes the contract look worse and the follow-up look better than either is.

One owner, one hour, one page

Once the reports are saved, the reconciliation is a short monthly routine, and it works only if the same person runs it the same way every month. Put the six numbers on one page, with last month and the trailing three months beside them. Next to each work list — not billed, not sent, sent and unpaid, patient balances — write the name of the person who works it and the day of the week they do.

Provider pay belongs in the same conversation. Open Dental lists, as an advantage of one write-off date setting, that it “allows paying providers on adjusted production when it’s completed.” Whether associates and hygienists are paid on gross production, net production or collections is a contract decision for the owner and the practice’s attorney; the reconciliation only shows what each choice costs in the month it is paid.

What should the morning huddle sheet track for yesterday’s production and collections?

Yesterday’s huddle sheet should track five lines: completed production by provider against what was scheduled, collections split into patient and insurance payments, adjustments and write-offs by type, claims from yesterday’s work that have not gone out, and posted payments against the bank deposit. The production and collection lines come from reports the practice management system already has. Dentrix’s help describes its Daily Huddle Report as showing “production, collections, case acceptance, new patients, and scheduling” for use in “morning staff meetings”; in Open Dental, the Yesterday option on the Production and Income report and the Daily Payments report cover the same day’s production, adjustments and payments.

Read yesterday’s collection percentage with care. Dentrix calculates its prior-day figure as the prior day’s collections “divided by the Total Production Completed for the Prior Day,” but the money that arrives on a given day includes insurance payments for dentistry done weeks earlier. For example, a practice that completes $9,000 of dentistry on a Tuesday and collects $6,500 that day shows about 72%, a figure that says little yet about Tuesday’s work, because the insurance on it has not been paid. The month-to-date percentage, which Dentrix computes as month-to-date collections divided by completed month-to-date production, is less noisy than a single day. Both divide by completed production, so the gross-or-net question from the monthly figure above applies to them too.

The point of the sheet is the work it starts, not the score. Each line that is off gets a name and a same-day fix: a procedure completed yesterday with no claim, a claim still sitting on the Claims Not Sent report, a write-off posted under the wrong type, or a payment posted with no matching deposit. Caught the next morning, each is one item to correct; caught at month-end, it has to be traced back first.

• Production: yesterday’s completed dollars for each doctor and hygienist, next to the scheduled figure on yesterday’s sheet. Dentrix’s huddle report shows completed production for the prior day and scheduled production for today, so yesterday’s schedule is on the sheet printed yesterday morning.
• Collections: patient payments and insurance payments on separate lines, with month-to-date totals beside them. Open Dental’s Daily Payments report already groups insurance payments and patient payments separately.
• Adjustments and write-offs posted yesterday, by type. Open Dental’s Daily Production and Income report lists each adjustment on its own line, apart from the procedure it is attached to.
• Claims: yesterday’s completed procedures not yet on a claim, and claims created but not sent.
• Deposit: yesterday’s posted payments against the bank deposit and the card batch, with any difference explained. The Daily Payments report subtotals each payment type, such as check or credit card, so checks can be matched to the deposit and cards to the card batch.

When not to hire anyone for the gap

If the month balances, the unexplained remainder is small, each work list has a named owner and shrinks from month to month, and the CPA already reconciles deposits, there is nothing here to buy. Keep the hour on the calendar and keep the money.

If the gap sits in one place — a stack of claims never sent while a team member was out — the fix is to send them and give the list an owner, not a study. If the books themselves are behind, the first call is to the CPA or bookkeeper. And if the practice is small enough that the doctor runs the reports personally, the free Revenue Leak Calculator gives a rough first figure in a few minutes; if that number is small, the answer is in already.

Where the Revenue Review fits

The Revenue Review does this reconciliation for twelve months, not one, and follows each piece of the gap upstream: to the call that was not returned, the plan that was presented and not scheduled, the claim that was not sent, the write-off that was posted under the wrong name. It takes two weeks and works from read-only access to the practice’s own reports, starting with aggregate reports that carry no patient names, and it ends in a written report the practice keeps: each leak with a monthly dollar figure wherever the records support one, a ranked list of what to fix, and a 90-day plan.

It gives no tax or legal advice and does not replace the CPA; it makes no clinical judgment and works no claims. It is built for owner-led practices with $2 million or more in annual collections and two or more doctors or locations. The next step is a free 20-minute call, where a practice that does not need the Review is told so.