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Paper checks continue, but plan for electronic future

August 28, 2017

By David Burger

The switch to electronic reimbursement by some third-party payers has prompted the ADA Practice Institute to study how easily dentists could make the change in their offices.

Aetna has joined MetLife and other payers in adopting alternatives to reimbursement via paper check, either through electronic funds transfers or virtual credit cards. Through the ADA's efforts, each of these third-party payers has agreed that individual dentists may opt out of electronic funds transfers and continue to receive paper checks for their claim reimbursements.

But will opting out always be better?

The ADA recognizes that electronic funds transfer is on the road to becoming the preferred payment method and there are obstacles to ready acceptance by dentists — but when identified, they can be overcome, according to the ADA Practice Institute.

To better understand these obstacles, the ADA Practice Institute has initiated a study of what is required to accept electronic funds transfers, as well as an electronic remittance advice in lieu of a printed explanation of benefits.

Two dentists on the ADA Council on Dental Benefit Programs — Drs. Mark Mihalo and Ron Riggins — have volunteered their practices as the study sites.  Each represents different types of dental practices, with their own unique attributes.  

"As a solo practice dentist I am very interested in ways to become more efficient, and that includes moving away from paper as well as adopting better ways to match receivables with payments," said Dr. Mihalo.

The study began in late February with site visits followed by information exchange via email and conference calls. "The study so far showed that although most of the puzzle pieces exist, they are not seamlessly connected," said Dr. Dave Preble, vice president of the Practice Institute. Further, manual reconciliation by office staff is required, especially when receivables must be adjusted.

"My staff tells me that in terms of time and effort the manual reconciliation process with electronic remittance advices and electronic funds transfers is no better than how we reconciled explanation of benefits and paper checks," said Dr. Riggins, chair of the Council on Dental Benefit Programs. "We are continuing to work on the bugs and believe that the real efficiencies will arrive when there is an integrated software solution that involves the software vendors, banks, clearinghouses and payers."

After nearly six months of working with their practice management system vendors, transaction clearinghouses and banks, and one-on-one ADA support, the study involving the two dentists revealed:

  • Arranging for their banks to receive electronic funds transfers and notifying the practice of their receipt posed no problems and required little staff time.
  • More time was required to identify and contact appropriate practice management vendor staff for assistance with software updates and training so that electronic remittance advices and electronic funds transfers could be accepted and reconciled.
  • Reconciliation trace numbers, required on both the electronic remittance advices and electronic funds transfers, are not consistently identified on the bank's notification of the electronic funds transfer receipt.
  • There is more than one transaction clearinghouse that is, or can be, used for claims and electronic remittance advices transmittal between the dentists and payers.
  • Regarding clearinghouse selection, the dentists receive guidance from their practice management system vendors and direct solicitation from dental benefit plans.
  • Automated reconciliation of receivables and payments is a missing critical practice management software capability, and is an obstacle to efficient electronic remittance advice and electronic funds transfer processing.

Although both Dr. Mihalo's and Dr. Riggins' practices are following a new path, neither wish to give up as they see their experiences as something that can be shared as part of the ADA mission to help members succeed, they said.

"The study is continuing and we expect to have a white paper on this topic by Dec. 1, " said Dr. Preble. "The paper will be in addition to the webinar we developed to provide member dentists with information on what is becoming a hot topic within the dental community."

The recorded webinar is available here.

According to information the Practice Institute has obtained, about 6-8 percent of all dental claim reimbursements are electronic, which means that more than 90 percent are paid using paper checks.

For more information, contact or the Member Service Center at 1-800-621-8099.