PPO 101 for Dentists

Here is another great post from our friend Sandi Hudson at Unlock the PPO. 

Sometimes we get calls from new dental school graduates or dentists getting ready to buy their first practice and they have questions about how PPOs work. Insurance seems to have a language of it’s own and if you are looking to learn the jargon, here’s the basics:

When you are In-Network with a PPO you are considered a “Preferred Provider” with them. You sign a contract stating that you agree to a specified fee schedule which is lower than your regular fees. In exchange for the discount, the insurance company promotes your practice by listing you as a Provider with their customers (your potential patients). You will be subject to reimbursement based upon the rules of the plan including a yearly maximum of benefits, potential waiting period on some services and frequency limitations. Depending on the state you practice in and the type of policy involved, many insurance companies require the dentist to adhere to the negotiated fee even if it pertains to a non-covered service or the patient’s yearly maximum has already been paid out. This is important for procedures such as veneers, implants or ortho because the policy may exclude coverage but will still prohibit you from charging the patient your regular fee. It is important that you know which procedure codes your office utilizes the most as those are the fees you will assign most priority during fee negotiations.  If you are unsure if your state allows you to charge for non-covered benefits visit our blog on this topic.

Assignment of Benefit means that the patient has agreed to have their benefit check sent directly to your office and you, as the dentist, agree to accept their benefits from the insurance company. If you are a Preferred Provider, the insurance company will automatically send you the check. If you are not a Preferred Provider, most insurance companies will still allow you to accept AOB even on an Out-Of-Network basis. Patients often prefer this option because the dentists waits for the insurance check rather than the patient.  Some insurance companies will not send the check directly to the dentist for out-of-network claims.

If you choose not to become a Preferred Provider yet provide services for a patient utilizing their benefits, that insurance company will consider you to be an Out-Of-Network Provider. As an OON provider you will bill your full fee to the insurance company and they will pay their designated percentage typically based onUCR (Usual and Customary). UCR is considered the maximum allowable charge the insurance company will consider for a service. So even if there is 100% coverage on a code, they will still pay up to a particular amount which is their designated UCR. Be aware that UCR is different depending on your area and each insurance company. Some employers also choose a higher UCR level when purchasing an upgraded plan so even with the same insurance company you may see different UCRs depending on the policy. When your fee exceeds the insurance company’s UCR you may then bill the patient for the difference between UCR and your fee. This is another area we examine with our services as we want your practice to fall close to UCR with the procedure codes that matter the most.  While most policies are paid based on UCR, be aware that there can be downgrades to plans for seeing out-of-network providers so researching benefits on top employer plans in your area is important.

In a totally Fee-For-Service practice, the dentist chooses to collect payment in full from the patient at the time of service. The patient then submits a claim form to the insurance company and the insurance company pays any due benefits directly to the patient. The dentist is paid directly from the patient, not the insurance company.

There are benefits and restrictions with all models of practicing dentistry. To see a quick pro and con listing visit our PPO vs Non-PPO page.  You may also contact us toll free at 855-327-9125.

Choices

How do some practices make PPOs work better than others? Much of it boils down to choices regarding practice style. A typical solo dentist who takes PPOs usually does so to keep cash flow rolling until the schedule gets busy and then other options can be considered. When the practice has been built to a level where the schedule is consistently full, this is where choices become more individualized.

Building a PPO Practice

The dentists who have busy PPO practices grow by making good business decisions about how they manage their overhead and patient flow. When the schedule gets full they recognize that they can increase capacity in a variety of ways. Rent stays the same each month so utilizing the office from 7am to 7pm means that a PPO patient can be seen more profitably because existing space is being managed more efficiently. Practices looking to grow in this way also consider adding a partner or associate to increase capacity and create good systems to maximize their staff and facility. Some increase productivity by utilizing expanded duties staff to delegate duties. I know many dentists who provide quality care to their patients with this model by being efficient and smart about overhead but you must recognize that high write-offs require you to manage well and have proper systems in place.

The Other Direction

When the schedule becomes full, the decision can be made instead to decrease insurance participation rather than add additional capacity and/or staff. Dentists who make this decision typically do not want to deal with insurance any more than they have to, prefer to not to increase their hours or do not want to add a partner. They recognize that there are ways to continue seeing more patients and be profitable but the practice style required to achieve these results is not the way they want to practice. They find dentistry more enjoyable by having fewer insurance restrictions, keeping a smaller staff and usually less administrative work. These dentists prefer to gradually move towards independence from insurance as patient flow allows.

Our goal isn’t to persuade anyone about which type of practice to pursue. Dentistry can be enjoyable and profitable with a variety of practice styles. Our services are designed to attain the results most beneficial to your chosen style of practice, whatever that style may be.

You can see the original article here.

For more information, please contact info@dentalcpas.com

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Should a Dentist Choose PPO or Not?

Here is a great post from our friend Sandi Hudson at Unlock the PPO.

Feel like you’re pulling your hair out trying to figure out insurance? Even with the ease of electronic insurance filing there is still a large administrative cost associated with being an in-network provider. Delayed insurance payments, yearly maximums that have stayed stagnant for years combined with rising costs make dropping insurance plans seem an increasingly more attractive option. Wouldn’t it be great to get out of the insurance game all together? Maybe you can, but rarely do we recommend dumping all plans at once. Instead, we recommend you consider many factors that contribute to what makes you enjoy dentistry.

Dentistry by nature is a stressful profession and shaping your insurance involvement to reflect the type of dentistry you want to provide is one step in helping ensure a longer career. Many dentists have become burned out by getting busy with PPOs only to build a practice of running crazy with maximum patients yet declining profits. The sigh of relief from building a full patient base is quickly overshadowed by a packed schedule that isn’t producing the fruits that were seemingly promised. How do you determine what mix of insurance to accept, if any?

On the positive side, PPOs can be useful in generating new patient flow. By being listed as a Provider, the insurance company markets your practice to their list of insurance patients on your behalf. Start-up practices, in particular, need a quick influx of new patients and often PPO involvement is one way to accomplish that. Unlike traditional marketing expenses which can be expensive with little results, PPOs do not “cost” anything until the dentist has actually provided care for the patient. Many dentists do not have the time or inclination to become educated in the specifics of marketing campaigns making PPOs the default means of gaining patients. Some practices do marketing in addition to participating with PPOs, some are able to use PPO participation as their only form of marketing.  As the economy lags in most parts of the country PPOs are also being considered as a way to jump start production and new patient flow in areas that are continuing to battle decreasing production.

Drawbacks to PPOs are obviously the write-offs. You will collect less than your regular fees as an in-network Provider. How much less depends on the contract. Some insurance companies negotiate fees others do not, often depending on how many other Providers are in your area and how badly they need participating dentists to be able to sell their insurance plans to employers. As a practice becomes more established, typically the dentist continues to broaden the range of services provided. Newer services or cosmetic services such as implants and veneers are often excluded from coverage. If the dentist is heavily cosmetic based it becomes harder to work within the framework of PPOs because many do not allow you to pass the cost on to the patient even if they are non-covered services (depending on the state you practice in and the policy). These restrictions often limit the services that can be offered to PPO patients if reimbursement rates are not even enough to cover the cost of the procedure.

We encourage dentists not to look at insurance as a black and white issue. As a practice grows and changes over the years so will views on insurance participation. What may be a good fit at one point in a dentist’s career may gradually change as a practice builds the patient base, reduces practice debt or expands services. Our company helps you get control over which plans you take according to your personal and practice goals. For a free phone consultation visit our Contact Us page.

Find the original article here.

Dental Fee For Service versus Dental PPO - Which Makes Better Sense?

I'm analyzing things right now and seriously considering going in-network with MetLife (PPO).

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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