Dental Practice Sales: Patient Credits and Unclaimed Funds

When selling a dental practice, one critical aspect that requires attention is managing patient credits and unclaimed funds. It is essential to handle these financial matters responsibly to ensure a smooth transition for both the patients and the new practice owner. In this blog post, we will explore the key considerations and guidelines for effectively managing patient credits and unclaimed funds during the sale of a dental practice.

Understanding Patient Credits: Patient credits refer to funds that are owed to patients for overpayments, prepaid treatments or services, or insurance reimbursements. It is crucial to diligently identify and account for these credits to ensure that patients are appropriately reimbursed for any outstanding amounts.

1. Thoroughly Review Accounts Receivable:
   Before finalizing the sale of your dental practice, conduct a comprehensive review of your accounts receivable, specifically focusing on identifying any existing patient credits. This includes analyzing payment ledgers, outstanding charges, and insurance claims.
2. Communication with Patients:
   Notify patients who have outstanding credits and inform them of the upcoming practice transition. Provide instructions on how they can claim their funds, whether it is through direct reimbursement, transfer to the new practice, or other appropriate methods.
3. Establish a Clear Deadline:
   Set a specific deadline for patients to claim their credits, which should be well-communicated to them. This allows sufficient time for patients to come forward and claim their funds while ensuring a clear timeline for closure of outstanding credits.

Managing Unclaimed Funds: Unclaimed funds are funds that belong to patients who cannot be located, have passed away, or have not claimed their credits within the specified timeframe. State laws govern the handling of unclaimed funds, and it is crucial to adhere to these regulations to both protect the rights of patients and ensure legal compliance.

1. Research State Laws:
   Familiarize yourself with the unclaimed property laws in your state to understand the specific requirements and obligations for handling unclaimed funds. Each state has different rules regarding reporting, notification, and the timeframe after which unclaimed funds must be turned over to the appropriate state agency.
2. Document and Account for Unclaimed Funds:
   Maintain a detailed record of all unclaimed funds, including the patient’s name, contact information, and the amount owed. This will help streamline the process of transferring the funds as required by state regulations.
3. Reporting and Compliance:
   Adhere to the state’s reporting requirements for unclaimed funds. Ensure timely submission of reports and payment to the appropriate state agency to remain compliant with legal obligations.

Managing patient credits and unclaimed funds is a crucial aspect of the dental practice sale process. By conducting a thorough review of accounts receivable, effectively communicating with patients, and adhering to state regulations for unclaimed funds, you can ensure a smooth transition for your patients and maintain legal compliance. Be sure to consult with legal and financial professionals with expertise in dental practice transitions to ensure you follow all applicable regulations and protect the rights of your patients during the process.