I have a FFS office now, and am only "in network" with Delta Premier. Although I am busy, I have extra capacity in the office--about 15% idle time. I advertise heavily and average 10-15 NP/month excluding emergencies. My area is competitive.
I've done a thorough fee analysis and had Charles Blair do a PPO analysis. Essentially I'd take a 15% hit off my normal fees on MetLife patients.
I currently have around 100 active MetLife patients now. MetLIfe is paying 100% of my preventative fees, but they are an utter incomprehensible mess when it comes to restorative. On crown/bridge my fees are generally within MetLife UCR, maybe off by 10%.
But I'm getting more and more questions from patients, especially on restorative, that basically ask My insurance says I save money by going to a network provider....and I can't argue with this.
My question is: How do you know when to need network participation? Has anyone gone from FFS to PPO, and what are the results?
We just met with a client to review their 6-month numbers. His gross production was up $44k and his write-off's were up $64k, so NET production was down $20k. So this guy worked harder to make less, why?
He wanted to be busier. He joined a few more PPO's including MetLife and got the influx of patients he wanted. Unfortunately they took the chair time of other better paying PPO patients and therefore made LESS money seeing MORE patients.
He had NO idea until we presented the numbers.
Make sure you DO THE MATH for YOUR specific situation!
Sandi can help you make the best decision!
Just to be clear, he produced $44k more and wrote off $64k more; therefore collected $20k LESS. He truly saw MORE patients and collected LESS. Not to mention the additional costs associated with that additional GROSS production of $44k. Maybe $4k in costs so he TRULY EARNED $24k LESS and worked harder to do that.
In THIS case it clearly backfired on the doctor. If there's idle chair time and it can be filled with something, generally something is better than nothing as long as the ADDITIONAL costs do not outweigh the ADDITIONAL collections.
I think you're on the right path. I’ll try and make it really simple. Let's compare 2010, 6 months to 2009, 6 months:
2010, 6 month production was 1,044,000 and 2009, 6 month production was 1,000,000.
2010 "write-off's” were 364,000 and 2009 "write-off's" were 300,000 (write-off's = what insurance DOES NOT PAY)
Therefore, NET production through 6 months of 2010 was $680,000 and it was $700,000 through 6 months of 2009.
NO FEE INCREASES IN 2010 FROM 2009 FEES.
This first appeared on Dentaltown.
Send your questions to Tim Lott, CPA, CVA at tlott@dentalcpas.com
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