Notice was given this month that Delta is lowering fees in California for Premier dentists.  For details on the specifics of this change from the California Dental Association, visit their site here:  https://www.cda.org/NewsEvents/Details/tabid/146/ArticleID/771/CDA-responds-to-Delta-Premier-fee-reduction.aspx

If you are not located in California and are tempted to ignore this information, we suggest you pay close attention as it’s a trend that is likely to move into the rest of the country.  We’ve received many questions about this change and how to position a practice to withstand the effects as much as possible.  A few suggestions that we’ve suggested to our clients are below:

1. In some states Delta Premier is no longer an option with new contracts. If you are in a state where that option is still open then if you ever were considering being a Premier only provider now is the time you want to consider finalizing that decision. We don’t know how long that window will be open in other states, could be 1 month, could be 5 years but the trend is certainly moving towards eliminating Premier only status. We tell all of our clients that we assume at some point Delta Premier is going away so the move to Premier only status, where available, is still a temporary move. You’re catching the train while you still can, getting higher reimbursement rates in the short term and proactively planning ahead to position your practice so that when Delta Premier is gone you’ve done what you can to mitigate the risks.

2. If you are Premier only and 5-10 years away from retirement assume that your practice will not necessarily have the same value for the dentist who buys your practice anymore. If 20% of the practice is Delta then a purchasing dentist will see that pool of production drop 20-25% in collections. So a practice with $200,000 of Delta production for a Premier dentist would typically drop $50,000 in collections if the purchasing dentist has to take PPO instead. This is how Premier will eventually go away (along with the newly instituted drops in fee schedules) but will be a factor in the sales prices of practices for Premier only dentists in the next several years as the policy continues to spread nationally.

3. When Delta starts changing major policies and dropping fees is when dentists come out of the woodwork to start looking at how other companies compare with their fee schedules. Don’t wait for that to happen. As soon as Delta drops fees then the other companies know it and are bombarded with dentists calling to negotiate. Be proactive, negotiate with the other companies you participate with now and as often as possible (18-24 months in most cases) so that you’re in the regular flow of negotiations and aren’t subject to the timing of Delta policy changes.

4. Give serious thought about how growth, added locations and associates may play into your future. Even if your office is currently Delta Premier only, in the states where these policies have changed, a new associate must take PPO even when they are working under the same tax ID number/ownership as the Premier dentist. We even had a situation recently in Georgia where a father who was a Premier dentist was bringing in his son to the practice and not only did the son have to take PPO, they were requiring that the dad change to PPO. We are in talks right now with a Premier dentist who is getting ready to build a second location and he’s put those plans on hold until we can get written verification from Delta that his new office will not be required to take PPO. Even if the new office is under the same tax ID number that is no guarantee you can still keep that new location or any new associates Premier. That’s why written clarification directly from Delta is so important.

5. Despite the lack of control dentists may have about this there is one thing dentists could do that would change the Delta issue to some degree. In most cases, Delta will not send dentist the check if they are not participating at Premier level as a minimum. Dentists should take up this issue just like they have taken up the issue of PPOs not being able to control what dentists can charge if it’s a non-covered benefit. Currently there are 29 states that have passed the law which states that dentists cannot be held to the PPO schedule if the insurance policy won’t cover the services. Dentists now need to fight for laws that say insurance companies can’t refuse to send payment directly to the doctor based on participation status. Patients (you know, the ones who actually pay premiums) should legally be able to direct their benefits payment checks wherever they want. This would be a huge shift because currently many dentists participate only at the Premier level so that they don’t have to either charge the patient up front for services or chase the patient down later for $ because the patient spent the insurance check instead of paying their dental bill. Many dentists feel strong-armed into participation with Delta for this reason and a legal change to this would at least be an attainable step in the right direction.

There are no easy answers to the upcoming changes that are being forced upon dentists but do your best to keep control of your options!

The following states have already implemented laws for non-covered benefits and many more are currently in the process of introducing legislature on it.  These laws, when passed, state that if you are contracted with an insurance company as a “participating provider” you are NOT required to honor the PPO fee if it is a non-covered benefit under the patient’s policy.  In other words, if the insurance company isn’t going to be paying for the benefit they can’t hold you to the fee schedule.

As of January 2013, this is the most recent data I have on states which have passed the law where dentists are not required to accept negotiated fees for non-covered services.  If the law changes in your state please email us if you find out before we do!

Connection Dental isn’t the only third party administrator that will have a relationship with Metlife’s new PDP Plus network in January 2013.  Lisa has been able to find a link with the following additional 3rd party administrators as well:

First Continental Life

Stratose

Coalition America

4Most Dental

Now is a great time to pull up all your old contracts and make sure that you start 2013 with a clear understanding of who you are contracted with!

Whew!  It’s been a busy couple of days for Lisa digging up some details on the new Metlife/Connection Dental alliance.  There’s some new pieces of information to share that we didn’t have before that we want to pass on.

1. The Metlife patients that are showing up under the Connection Dental fee schedule are for the new PDP Plus network.  This is the network now for Met for all fully funded plans which means Tricare is not included.
2. If you are currently in-network with Connection Dental but not Metlife and you do not want CD fees to apply to your Met PDP Plus patients then you need to call Connection Dental immediately to determine the opt out requirements for your office.
3. Check out the attached documents for more information on this new system!
4. Be sure you understand your potential participation levels for both Connection Dental and Metlife.  There is no right answer for all offices.

We are seeing more and more impact with third party administrators.  This move with Metlife is similar to United Concordia’s move under the Assurant/DHA fee schedule that is also transitioning.  In this case if you are NOT participating with United Concordia directly then your United Concordia’s FFS network (Not ParNet) will fall under the Assurant/DHA fee schedule instead.  It’s imperative that offfices understand not only who they are in-network with but how they are contracted.  You can get paid very different rates sometimes on the same patients!

Attachment links below:

METLIFE PDP PLUS FAQ FLYER

METLIFE PDP PLUS FLYER

Big news on the Metlife front and many thanks to Teresa Duncan at Odyssey Management for giving us a heads up for us to research the impact and share.  I’m covering how I think it will apply to established practices and we’ll add more information about how it will apply differently to start ups.

As offices that already participate with Metlife know, it’s one company that is typically non-negotiable and has a fee schedule that’s tough to manage.  But, it’s always been a fairly black and white in that Met has directly handled their own fee schedule and participation with Met has been by directly contracting through Metlife only.  Effective January 1,  2013 MetLife’s PDP+ network has become listed under the Connection Dental, DenteMax and other third party administrators.  What does this mean?

If you are currently contracted with Metlife but NOT a third party administrator

When you are directly contracted with an insurance company then the fee schedule tied to that direct contract typically takes precedence over a third party or reciprocal network. This means if you are directly contracted with Metlife your Metlife patients will continue getting paid on the Met fee schedule you are currently under.  You will not see a change with your Metlife patients or the fee schedule that you have for those patients.  Third party administrator patients do NOT shift over to your Met fee schedule, this agreement only works one direction.  Then the question becomes if you could potentially get paid better on Metlife patients through a third party depending on which is paying higher.  But if you add a third party contract because the fee schedule is higher with the idea that you’ll get paid more for Met patients then be aware of all the other companies you’ll be adding that also fall under the third party fee schedule.  Be sure you understand all sides of the issue before making any impulsive decisions.

If you are currently contracted with a third party (Connection Dental, DenteMax, etc) but NOT Metlife

If you are contracted with a third party but you are NOT contract with Metlife then you need to see how the move in-network would apply to you.  As of now (Feb 2013) our latest information is that this change will apply only to the PDP+ Network (not PDP or Tricare).  You may get the PDP+ patients to fall under the third party contract but be aware there is no guarantee that they have to pick you up.

You want to know how much Metlife production you have with the PDP+ network because that pool of production will shift over to being in-network and will be paid at the third party rates assuming your office gets picked up by the third party.   Across the country we consistently see Metlife as the 2^nd or 3^rd top production source in most practices so this could have a big impact on many practices, depending on how many of your Met patients are in the PDP+ pool.   You can go on the Metlife website to see if a patient is in the PDP+network but you would not be able to pull your PDP+ production numbers from your practice management software at this time because the PDP+ network is new and an office would not have been able to track production tied to it in the past.

If you are currently contracted with BOTH a third party and Metlife

This is more complicated and recommendations are very practice specific.  In some areas the third party fee schedule is higher, in some areas the opposite.  One office may be contracted with a third party as well as a bunch of other companies directly in which case the third party is only picking up companies that you’re not directly contracted with.  The impact of a third party administrator varies for each practice depending on the mix of direct contracts vs. how many companies fall under the third party administrator in that particular practice so there’s no way to make a general recommendation about route is best, it completely depends on how you are contracted and how much production you have tied to the affected insurance companies.  It would seem like an attractive option to drop Metlife’s direct contract and let the third party pick up Metlife patients if it’s a higher fee schedule however be aware that your practice may be comprised of a low amount of PDP+ patients (the ones that have the tie to the third party).

A few general notes:

1. One major third party administrator, Connection Dental is taking 90-120 days in many areas for credentialing so there’s no quick fix but rather an opportunity to be sure you are strategically planning the best you can.  Understand very carefully how much notice you need to give to terminate any contracts you have signed and ask how long it may take to get credentialed before making any hasty contracting decisions.
2. Third party administrators note that they cannot promise which carriers on the list will pick up the office through their third party contract although the carriers on the list typically do.

This one is a game changer!

Many dentists are already aware of the changes that recently happened with Delta in California. To summarize, new contracts with Delta in Cali are being required to participate at the PPO level as opposed to signing up as a Premier dentist only. This is the case even for associates who are hired at a practice that is currently Premier only. This created a huge issue for dentists in California who were buying practices from a dentist that was a Premier provider because the purchasing dentist was not allowed to sign up as a Premier provider. Why is this an issue? Because Delta PPO fee schedules are typically 15-20% less than the Delta Premier fee schedules. There are VERY few policies that are strictly Premier policies, the vast majority are PPO/Premier option policies. This means the policy is written so that the patient has the option of seeing either a PPO or a Premier contracted dentist but Delta pays the dentist at the lowest rate they participate with. For example, if a practice has $300,000 a year of Delta production with a Premier contracted dentist and a new buyer purchases the practice and is required to be a PPO contracted dentist rather than Premier, that $300,000 of production will get paid at about 15-20% less with the new owner than the previous owner. A new owner that is already challenged with practice and student loan debt can unknowingly realize after the fact that their Delta collections just got an automatic fee schedule decrease on the exact same production with the exact same patients because Delta will no longer allow them to sign up with the Premier fee schedule.

Up until recently this issue was isolated to California only. We saw a post on DentalTown a few days ago from a dentist buying a practice in Pennsylvania who was told the same thing, that they could not sign on as a Premier provider only, so my partner, Lisa, did some investigating to see if this trend has now expanded beyond California. Initially all provider relations reps in Pennsylvania indicated that this was NOT the case however after multiple discussions with a supervisor it turns out that it’s on a case by case basis. If an area doesn’t need a Premier provider (as defined by Delta) they can’t sign up for Premier only. In Pennsylvania, it will be the exception to the rule that a provider will be able to sign up with Premier only. If a doctor had not participated as a Premier provider in a prior location there is no chance at all of becoming a Premier provider only in Pennsylvania.

There are different regions within Delta and the Pennsylvannia Delta region includes the following states: AL, CA, DE, FL, GA, LA, MD, MS, MT, NV, NY, PA, TX, UT, WV and District of Columbia . Our understanding is that the states listed above are the ones that may begin to limit participation choices.

Only 3% of all Delta policies are Premier only and these are more commonly small businesses who purchased the original policies decades ago. All policies that are being sold to new clients by Delta are DPO/PPO policies and they no longer have any incentive to add Premier providers and a strong incentive to add DPO/PPO only providers. We are seeking more details in writing and will post them as they come available. If you personally are told that you cannot sign up with Premier only, we’d encourage you to post that on this thread to help give early warning to all. When Delta’s own Customer Service and Provider Relations Dept in PA had no idea that there had been a massive change in their own business model until a query was made, it is likely this may occur in other states as these changes begin to happen.

How does this affect you?

1. If you are purchasing a practice, particularly in one of the states listed above, and the selling dentist is a Premier provider only, get a Delta recruiter to put in writing that you can be strictly a Premier provider should you purchase the practice. If the area you are purchasing a practice is no longer allowing new contracts to be written for Premier providers then the value of the practice is no longer the same because all of the Delta revenue will be paid out on a lesser fee schedule after you purchase the practice. Do NOT take your answer from the provider relations department reps with a phone call. Get it in writing. The only thing worse than having your new practice’s Delta revenues downgraded is not knowing about it ahead of time and potentially overpaying for a practice.
2. If you are a current owner dentist in one of the states listed above, are relatively close to wanting to retire/sell your practice and if you are a Premier provider then realize that the value of your practice may shift when you are ready to sell. If no Premier contracts are being written in your area, the value of your Delta production will not be the same for a new owner as it is for you.

If your Delta makes this move there are two choices moving forward. You can accept the PPO/DPO option and collect less for the same patients or you can choose not to participate with Delta which will cause all payments to go directly to the patient, requiring you to collect in full from your Delta patients.

We have unfortunately worked with several new practice owners in California who were not aware of these changes until after they purchased their practice. The potential impact is big so be sure the experts you are working with clearly understand the changing landscape.

Twenty-two states have already implemented laws for non-covered benefits and many more are currently in the process of introducing legislature on it. These laws, when passed, state that if you are contracted with an insurance company as a “participating provider” you are NOT required to honor the PPO fee if it is a non-covered benefit under the patient’s policy. In other words, if the insurance company isn’t going to be paying for the benefit they can’t hold you to the fee schedule.

As of January 2012, this is the most recent data I have on states which have passed the law where dentists are not required to accept negotiated fees for non-covered services:

Arkansas

Arizona

California

Connecticut

Georgia

Iowa

Indiana

Louisiana

Maryland

Minnesota

Mississippi

North Carolina

North Dakota

Oklahoma

Oregon

Rhode Island

South Dakota

Tennessee

Texas

Virginia

Washington

Wyoming

If you have updated information in regards to this list, please feel free to email us at sandi@unlocktheppo.com