How To Reduce AR Days by Collecting Copays at Time of Service

Dental practices leave thousands of dollars on the table every month by failing to collect patient copays at the point of service. The math is simple but painful: practices achieve a 70% collection rate when asking for payment before treatment, compared to just 30% when billing afterward. For a practice generating $1 million annually, every 1% improvement in collections translates to $10,000 in additional revenue. Modern AI-powered patient communication can pre-qualify patients with insurance details and automate payment reminders, setting the foundation for successful copay collection before patients even arrive.

Key Takeaways

• Point-of-service collection achieves 70% payment rates versus 30% when billing patients after treatment
• Best-in-class dental practices maintain AR days under 40 with collection rates above 95%
• Automating payment reminder workflows has been shown to improve collection rates by 20–30% compared with manual reminder processes
• Accounts aging beyond 90 days become significantly more difficult to collect—one analysis found an invoice unpaid after 90 days has only about an 18% chance of being paid, making upfront collection critical
• Staff training and scripted conversations eliminate the discomfort that prevents consistent copay collection

Understanding the Impact of Uncollected Copays on AR Days

Accounts Receivable days measure how long it takes your practice to collect payment after providing services. The average dental practice operates at 30-45 AR days, but practices with weak point-of-service collection often exceed 60 days—meaning they wait two months to receive payment for completed work.

The financial impact compounds quickly:

• Cash flow strain: High AR days tie up working capital needed for payroll, supplies, and equipment
• Increased write-offs: Best-practice offices maintain write-off rates under 2% while practices with inefficient collection processes can see significantly higher rates
• Administrative burden: Staff time spent on billing follow-up takes away from patient care
• Patient relationship damage: Billing disputes and collection calls erode trust built during clinical care

The root cause isn't patient unwillingness to pay—it's timing. When patients experience dental pain or anxiety, their focus is on treatment, not payment. By the time a statement arrives weeks later, the urgency has faded and competing expenses have emerged.

The Front Desk's Role: Empowering Staff for Effective Copay Collection

Front desk staff often feel uncomfortable asking patients for money, viewing it as confrontational rather than transactional. This discomfort creates inconsistent collection practices that directly impact your bottom line.

Building Staff Confidence Through Training

Effective copay collection requires framing the conversation as patient service, not revenue extraction:

• Emphasize transparency: Patients appreciate knowing costs upfront rather than receiving surprise bills
• Provide scripted language: Remove guesswork with proven phrases like "Your insurance shows a $45 copay for today's visit. How would you like to take care of that?"
• Role-play difficult scenarios: Practice handling objections in a safe environment before encountering them live
• Explain the insurance context: Staff should understand they're collecting what insurance requires, not charging extra

Timing the Collection Conversation

The single most important change practices can make is shifting collection from checkout to check-in. Collecting before treatment rather than after dramatically improves success rates because:

• Patients haven't yet experienced treatment discomfort or anesthesia
• The dental problem is still top-of-mind, creating urgency
• Children aren't restless and ready to leave
• Staff aren't rushing to prepare for the next patient

Train front desk team members to collect payment as part of the standard check-in process, treating it as routine as verifying contact information.

Pre-Service Verification: Streamlining Insurance Checks and Estimations

Accurate copay collection depends on knowing what patients owe before they arrive. Proactive verification provides time to resolve coverage issues and communicate estimates to patients.

Essential Verification Steps

Your pre-service process should confirm:

• Active coverage: Verify the policy hasn't lapsed or changed employers
• Remaining benefits: Check annual maximums and what's been used
• Deductible status: Determine if the patient has met their annual deductible
• Copay amounts: Document exact copay requirements for planned procedures
• Waiting periods: Identify any treatment timing restrictions

Communicating Estimates Proactively

A survey found that 96% of patients want an accurate upfront estimate of treatment costs, yet 64% said they did not receive a cost estimate before care. This gap represents a massive opportunity.

Include estimated patient responsibility in appointment confirmation messages:

• Send estimates via text or email 2-3 days before the visit
• Clearly label amounts as estimates subject to final insurance processing
• Offer payment plan options for larger amounts
• Provide contact information for questions

AI systems that handle dental appointment scheduling can gather insurance information during the booking process, giving your team a head start on verification.

Implementing Robust Payment Policies and Patient Agreement Forms

Written financial policies protect your practice legally while setting clear expectations for patients. Ambiguity invites disputes; clarity prevents them.

Policy Components That Work

Your financial policy should address:

• Payment timing: "Payment is due at the time of service"
• Accepted methods: Credit cards, debit cards, HSA/FSA, payment plans, third-party financing
• Insurance processing: "We bill insurance as a courtesy; you are responsible for any balance"
• Estimate disclaimer: "Quotes are estimates based on current benefit information and subject to change"
• Missed appointment fees: Clear cancellation and no-show policies

Securing Patient Acknowledgment

Require signature on financial policies during:

• New patient registration
• Annual updates to insurance information
• Before any treatment exceeding standard cleanings

Post financial policies visibly in the waiting area and on your website. Transparency builds trust and reduces disputes.

Leveraging Technology for Seamless Copay Collection and Reminders

Manual collection processes don't scale and create inconsistency across staff members. Technology automates the repetitive elements while ensuring no patient falls through the cracks.

Payment Technology Essentials

Modern dental practices need multiple payment channels:

• In-office terminals: Accept cards, contactless payments, and HSA/FSA
• Text-to-pay links: Send payment requests directly to patient phones
• Online portals: Allow 24/7 payment access through your website
• Card-on-file systems: Securely store payment methods for future use
• Third-party financing: Offer CareCredit or similar options for larger balances

Automated Communication Sequences

Automating payment reminder workflows has been shown to improve collection rates by 20–30% compared with manual reminder processes. Build sequences that include:

• Pre-appointment reminder (2-3 days before): Confirm appointment and include estimated copay
• Day-of reminder: Include payment link for convenience
• Post-visit statement (if balance remains): Clear itemization with multiple payment options
• Weekly follow-up: Gentle reminders for accounts approaching 30 days

SMS-based communication reaches patients more effectively than email or mail. Systems that automate follow-ups can handle this communication without adding to staff workload.

Addressing Patient Objections: Communication Strategies for Complex Scenarios

Even with perfect systems, some patients will resist paying at the time of service. Prepared responses turn objections into opportunities.

Common Objections and Responses

"I forgot my wallet/payment method"

• Response: "No problem—I can text you a payment link right now, and you can complete it from your phone before we get started."
• Prevention: Appointment reminders should mention bringing payment method

"I'll pay when I get the final bill from insurance"

• Response: "I understand. Your estimated copay today is $45, which won't change regardless of how insurance processes the claim. Paying now actually protects you from any delays."

"I wasn't expecting to pay today"

• Response: "I apologize if that wasn't clear. Your insurance requires a copay for this visit. Would you prefer to put this on a card, or would a payment plan work better for your budget?"

"I can't afford it right now"

• Response: "I hear you—dental care is an investment. We offer payment plans and accept CareCredit. Let me share those options so you can get the care you need today."

Handling Uninsured Patients

For patients without insurance, clearly present membership or discount programs before treatment. AI receptionists can explain these options during initial calls, converting potential lost patients into scheduled appointments.

Boosting Collection Rates: Best Practices for Consistent Follow-Up

Despite best efforts, some balances will require post-service collection. Systematic follow-up prevents accounts from aging into uncollectability.

The 30-60-90 Day Framework

Structure your follow-up based on account age:

0-30 Days:

• Send statement immediately after insurance processes
• Include text-to-pay link for convenience
• Automated weekly reminders via SMS

31-60 Days:

• Personal phone call from billing staff
• Offer payment plan options
• Document all contact attempts

61-90 Days:

• Manager-level outreach
• Final payment plan offer
• Written notice of potential collection referral

90+ Days:

• Consider collection agency referral
• Document write-off for tax purposes

Accounts aging beyond 90 days become significantly more difficult to collect—one analysis found an invoice unpaid after 90 days has only about an 18% chance of being paid, making early intervention essential.

Preventing the Need for Follow-Up

The best collection strategy is avoiding post-service billing entirely:

• Collect estimated copays at check-in before treatment
• Save cards on file with patient consent for balance billing
• Require payment before scheduling next appointment if balance exists
• Flag accounts with balances in your scheduling system

How Resonate AI Supports Better Financial Operations

While copay collection happens at the front desk, the groundwork begins the moment a patient first contacts your practice. Resonate AI addresses the communication gaps that undermine collection efforts before patients ever arrive.

Pre-Qualifying Patients with Insurance Information

Resonate's AI Dental Receptionist gathers critical information during initial patient contact:

• Insurance carrier and policy details
• Treatment needs and urgency level
• Preferred appointment times
• Contact preferences for follow-up

This information flows directly to your team, enabling insurance verification and copay estimation before the patient arrives. When staff already know estimated patient responsibility, collection conversations become routine rather than confrontational.

Automated Appointment Reminders

The SMS Agent sends customizable appointment reminders that can include:

• Estimated copay amounts
• Payment portal links
• Requests to bring insurance cards
• Instructions for pre-visit paperwork

Patients arrive prepared to pay because expectations were set through consistent automated communication.

Capturing Missed Opportunities

When calls go unanswered—and 30% of dental practice calls do—potential patients often book elsewhere. In fact, 78% of patients book with the first practice that responds. Resonate's Missed Call Recovery System engages these callers instantly via text, gathering information and booking appointments 24/7.

With 40% of new patient calls occurring outside business hours, automated systems ensure no opportunity slips away. One practice using Resonate recaptured $176K annually just from previously lost opportunities. More scheduled appointments mean more opportunities for point-of-service collection.

Real Results: Facial & Oral Surgery Associates Case Study

Facial & Oral Surgery Associates, a Texas-based practice, implemented Resonate AI and achieved remarkable results in just 30 days:

• 5-7 hours weekly time savings for staff
• 41 new patients captured in 30 days
• $81,000 captured in 30 days
• 61x ROI in the first month

These results demonstrate how addressing communication gaps at the earliest patient touchpoint creates downstream benefits for collection rates and overall practice revenue.

Multi-Location Consistency

For DSOs managing multiple practices, Resonate provides centralized oversight while maintaining location-specific customization. Standardized patient communication across all locations ensures consistent financial messaging regardless of which office a patient contacts.

If your practice struggles with high AR days and inconsistent copay collection, the communication layer is worth examining. Schedule a demo to see how AI-powered patient communication supports your financial goals.

Frequently Asked Questions

Why is collecting copays at the time of service so critical for dental practices?

Point-of-service collection achieves 70% payment rates compared to just 30% when billing patients afterward. This dramatic difference exists because patients are most engaged and motivated when their dental problem is top-of-mind. Once they leave the office, competing expenses emerge and the urgency fades. Every percentage point improvement in collections adds $10,000 annually for a $1 million practice.

What are common challenges dental practices face when trying to collect copays upfront?

The biggest obstacle is staff discomfort asking for money—many front desk team members view collection conversations as confrontational. Other challenges include not knowing the patient's copay amount before they arrive (due to inadequate insurance verification), patients claiming they forgot payment methods, and inconsistent collection practices between different staff members. These issues compound when practices lack written financial policies and trained scripts for handling objections.

How can technology assist in improving copay collection?

Technology automates the consistent elements of collection that humans often miss. Automated appointment reminders that include estimated copays prepare patients to pay before arrival. Text-to-pay links eliminate the "forgot my wallet" excuse. Card-on-file systems enable seamless balance billing after insurance processes. Practice management integrations ensure real-time posting and accurate AR tracking. Studies show automating payment reminder workflows has been shown to improve collection rates by 20–30% compared with manual reminder processes.

How does reducing AR days impact the overall financial health of a dental practice?

Lower AR days directly improve cash flow, meaning money arrives faster to cover payroll, supplies, and growth investments. Best-practice offices maintaining AR under 40 days also achieve collection rates of 98% versus industry averages of 92-94%. This 4-6% difference represents tens of thousands of dollars annually. Additionally, staff spend less time on billing follow-up, freeing them for patient care and practice growth activities.