There are many crucial parts to setting up a new practice but negotiating your PPO fee schedules and credentialing strategically IS the most overlooked. It is only after submitting applications with 20 or so different insurance companies that most providers realize that they have agreed to assigned fee schedules allowing only 40%-50% collection from their billed UCR.
The other catch is that you’re unable to negotiate those fee schedules until 24-36 months after your contract date. 90% of practices make this mistake and end up costing themselves tens of thousands of dollars (or more) in their first years of operation.
Practices that blindly contract without prior negotiation and evaluation of their options put themselves at a huge disadvantage right from the beginning.
In this article, we are going to talk through the different components to PPO participation, negotiations, credentialing and set up of contracts for new build practices and acquisitions. For those who have established practices or credentialed with PPOs without negotiating, there are options for you as well so stay tuned and we will go over strategies to course correct the PPO composition of your practice.
Fresh Start Practices
Practices that are brand new builds don’t have a current patient base. Setting up PPO participation in a profitable way is going to be essential to building a patient base and accumulating business quickly. An important note for any new practice: Negotiating and credentialing can typically take 3-5 months. It’s a good idea to start the process 6 months before your grand opening so that you can begin practicing with everything set up. If you pass that deadline, that’s OK too. You can still bill out of network while contracting is in process.
Being in network with insurance plans doesn’t require you to sign on with each individual carrier. There are leasing arrangements between insurance companies that allow you to participate with carriers through other carriers’ fee schedules. Utilizing the leasing arrangements to your advantage huge part of setting up an optimized PPO structure. If you have 10 fee schedule options for one major carrier, obviously signing up on the highest of those options is going to be your best bet.
For brand new practices, it is also helpful to gather member information for your area to know what plans are worth accepting. This can be done through inquiry with the insurance carriers or some research of employer groups in your area. You want to be aware of insurance plans for big employer groups to ensure you can be in network to gain more patient flow.
The goal is to set up participation with relevant plans in your area without sacrificing profitability.
Acquisitions – Purchasing an existing practice & patient base
Acquisitions are a bit different than fresh start practices as there is a patient base to retain. Obviously, in this practice scenario, contracting with the same plans as the previous owner would allow the new owner to stay in network with current patients which avoids disruption to their treatment and can keep them motivated to stay with the practice. Even though the previous owner has contracts set up, you do not have to take over their fee schedules or participate with plans in the same way.
The best strategy is to still negotiate with all carriers and map out a participation structure that allows you to be in network with the same members/plans but on higher fee schedules and through better paying leasing avenues. A very common mistake for an acquisition practice is to maintain the same contracts and just do an ownership change/TIN change with the current owner’s PPO companies. This basically forfeits your opportunity to negotiate and leaves you on old fee schedules that have most likely not been negotiated in years (if ever).
Established Practices
For practices that are already fully operational, you also have the option to negotiate increases to your insurance fee schedules and take advantage of the many leasing avenues that can lead you to higher collections. If you’ve recently started your practice and set up contracts without negotiating or planning out leasing strategies, you can always attempt to negotiate or just switch around the way you participate via leasing and network sharing.
You may also notice that companies are beginning to process claims on lower fees than you agreed to. This is one of the downsides of leasing, as insurance companies can process claims through the lowest option of their partner contracts. There are ways to opt out and avoid claim downgrading through PPO Negotiation & Optimization Services.
Recent Client Results
New General Practice in Hanson, MA
After obtaining and negotiating fee schedules with all relevant insurance carriers, we were able to credential this practice with a completely optimized PPO structure:
Aetna - Added at 58% higher than standard
Ameritas - Added at 58% higher than standard
Dominion - Added at 20% higher than standard
Guardian - Added at 42% higher than standard
Lincoln Financial - Added at 36% higher than standard
Principal - Added at 58% higher than standard
SunLife Financial - Added at 11% higher than standard
United Healthcare - Added at 36% higher than standard
Also credentialed with Humana, Connection Dental, Delta Dental and MetLife
The strategic credentialing for this practice will result in 36% higher collections on average compared to blind credentialing on standard fee schedules without negotiation or leasing strategy.
New Oral Surgery Practice – Riverton, UT
After obtaining and negotiating fee schedules with all relevant insurance carriers, we were able to credential this practice with a completely optimized PPO structure:
Aetna - Added at 127% higher than standard
Ameritas - Added at 135% higher than standard
Guardian - Added at 116% higher than standard
Humana - Added at 24% higher than standard
Lincoln Financial - Added at 135% higher than standard
Principal - Added at 42% higher than standard
SunLife Financial - Added at 135% higher than standard
United Healthcare - Added at 73% higher than standard
Also credentialed with BCBS, Delta Dental, MetLife, UCCI, EMI, SelectHealth and more!
The strategic credentialing for this practice will result in 40% higher collections on average compared to blind credentialing on standard fee schedules without negotiation or leasing strategy.
Established Practice – General Solo-practitioner – Virginia Beach, VA
This practice has thorough PPO insurance participation. Through negotiations and optimization, we were able to increase revenue with negotiable companies by about $75,000 per year. Here are the results:
Aflac/Argus - 25% increase
Altus - 20% increase
Aetna - 11% increase (direct contract)
Ameritas - 37% increase (re-structured to higher payer)
Connection/GEHA - 20% increase (direct contract)
Dominion - 51% increase (re-structured)
Guardian - 47% increase (re-structured to higher payer)
Humana - 18% increase (re-structured to higher payer)
United Healthcare - 19% increase (direct contract)
Principal - 57% increase (over current leasing option)
Established Practice – General, 2 Location Practice – Richmond, VA
This practice has thorough PPO insurance participation. Through negotiations and optimization of their third party administrators, we were able to increase fee schedules substantially.
Connection Dental/GEHA - 28% increase
Aetna - 28% increase (through leasing)
Ameritas - 35% increase (re-structured to higher payer)
Assurant/DHA/SunLife - 35% increase (re-structured to higher payer)
Guardian - 54% increase (re-structured to higher payer)
Humana - 31% increase (re-structured to higher payer)
Principal - 35% increase (re-structured to higher payer)
United Healthcare - 28% increase (through leasing)
Lincoln Financial - 35% increase (re-structured)
"I highly recommend Beacon PPO Solutions for dental offices with PPO insurance needs! Kelsey and Baylee have helped out with all of the insurance negotiations. They educated us on the umbrella networks and how insurance companies can pay us less based off backdoor leasing through other companies' fee schedules. They talked to us about how the negotiations were going and how things were getting better for us. It was a new but positive experience for me. They responded to all my questions in a timely manner. They did great by maximizing the insurance collections and getting us the best rates possible. Thank you, Beacon PPO Solutions!"
We assist offices in all situations to understand how their insurance carriers work and ensure maximum reimbursements for the work they are doing. Feel free to call in to have a conversation about your situation and what your options are to increase PPO revenue in 2024.
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