Often, dentists that are in network with many insurance plans tend to have a full chair and a backed-up schedule. Although the “busy-ness” means collections, of course being an in-network provider cuts into those collections greatly. By contracting as an in-network provider, you are agreeing to a set fee schedule of maximum allowable fees. Most carrier contracts require a 40%-60% write-off. Each carrier typically has a separate fee schedule and some plans may pay better than others.
Doesn't it make sense to strategize your PPO participation? If the patients in the chair are taking up x amount of your time and you are only able to collect 40%-50% of your fee, this is where the plans you take start to matter a great deal.
Truth is, your time is extremely valuable. You spend your time working on patients and have the claims submitted to only come back with a payment that is only a portion of the fee for your services. I speak with frustrated dentists every day who are mostly wondering, “What is the solution here?”. Well, let’s talk about your options.
#1 – Figure out what you have
The solution to a problem always needs a starting point and obviously figuring out your current PPO participation is step one. Remember, you can’t fix problems until they are identified. Evaluating your current insurance situation means:
Find out what plans you are in network with
Identify if you are in network through a direct contract or a leaser/third party contract
Obtain your most updated fee schedules
Analyze each fee schedule to see how they’re paying against your UCR and other plans
Research how many active patients you have with each insurance company
By starting here, you can quickly figure out what companies are your weak points and weigh in how many patients you have with each plan. It also brings to light the companies are paying decent vs. others that may not be profitable. Once you’ve identified what you have, you need to work on negotiating your fee schedules with the insurance companies to increase your compensation as much as possible.
#2 – Negotiate your contracts
Negotiating your PPO contracts will reveal the most profitable and time/money efficient way to participate with insurance plans. Simple right? Negotiate and ask insurance companies to "up" your fee schedules. Actually, the process is very complex. The PPO industry has evolved so much that you can be in network with each carrier in a variety of different ways. This is referred to as PPO leasing, network sharing or fee re-pricing. Any way you call it, basically it means that an insurance carrier can put you in network through other plans you may be contracted with even without you signing up with them directly. The motive for insurance carriers? To get as many in network doctors as they possibly can while selecting a leaser's fee schedule on their own terms. Of course, as you can imagine, insurance carriers can pick between their options and process on the lowest available.
PPO Negotiations & Optimization takes major strategy and no two practices have the same leverage, outcome or structure. The way an insurance company negotiates is dependent on your area’s demographics, the different contracts you are participating with and how other insurance fee schedules in the area are compensating. There are a handful of leverage points but the most crucial has to do with leasing and taking into consideration what other payers are offering. There are now dozens of companies that are technically negotiable. Any insurance carrier that has more than one option for you to participate means there is flexibility in the fees for in network participation.
#3 – Clean up overlap
If your practice is in network with all PPO plans, odds are there is a lot of overlap going on. Companies of relevance may be using your lowest fee schedules for claims and you or your team may not realize this is taking place. Insurance companies can be very clever with their "re-pricing" to get the best deal they can. Clean up would consist of:
Opt out of unnecessary leasing arrangements (keep companies from downgrading to lower fee schedules)
Take advantage of higher paying fee schedules by optimizing leasing strategies
#4 – Strategize
After negotiating your fee schedules for increases and optimizing the way you are in network through leasing optimization, you should have already increased your PPO revenue by a significant amount. At this point, where you go from here depends completely on your practice goals. If you are happy with the current patient flow in your practice, you may want to maintain participation with your carriers now with increased collections and negotiate again in 2 years. If you are looking for practice growth, look into adding some new participation or implement some new marketing techniques. If you are booked out and overly busy in your practice, it’s probably a good idea to identify which of your plans are still paying low after negotiation and determine if it makes sense to drop a few. Which contract(s) to drop depends on compensation along with the number of active patients using the plan.
Following the steps outlined will resolve the majority of your PPO issues (or at least help your blood pressure). Of course, going through this process takes hundreds of hours of work and there’s a learning curve. Not only are there 20+ companies to communicate back and forth with, but each of those carriers are connected in different ways. There are more than 3,000 ways to configure your PPO participation and only one MOST profitable way.
In summation, you are likely doing MORE work for LESS money. PPO Negotiation services are extremely beneficial for many reasons. The number one take away is increased reimbursements which automatically applies to your bottom line. The knowledge of how your plans pay can also help you select marketing strategies that increase patient visits within the highest paying networks you are participating with.
Is your practice a good candidate for PPO Negotiations & Optimization?
Here is a quick quiz for you to know if your practice needs Beacon’s PPO negotiation & optimization expertise. You should consider talking to Beacon PPO Solutions IF…
You are opening a new practice and need to negotiate and know your options before credentialing
You are in network with the majority of PPO carriers
You are in network with any third party administrators or leasing umbrellas (Connection Dental, Dentemax, Careington, etc.)
You feel as though your fee schedules pay very low
You have a very busy office with a backed up schedule
You are out of network with insurances but want to grow exposure through adding some profitable PPO
You don’t know where to start with evaluating your participation or the profitability of your contracts
Your office is noticing companies using lower fee schedules for claims (default leasing)
You want to make more money for the work you are doing.
If any of these sound like you… Give us a call or schedule a free PPO consultation through our website. The consultation is free and we will also do an evaluation of your PPO participation/ contracts and your negotiable revenue to determine if he service is a good fit. Worst case scenario — you endure some fun small talk and gather important knowledge of the PPO industry, your practice’s potential and some simple solutions to quickly improve your practice’s systems or participation.
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