The Start Up Guide to Insurance Participation

If you’re reading this, congratulations are probably in order because you are headed towards owning your own practice!  About 40% of our business is working with start up practices who are planning ahead to open their new offices and are attempting to analyze which insurance plans to accept.  The number one thing to remember is to plan ahead 120 days or more whenever possible in order to allow yourself enough time to make unrushed decisions about participation.  Often we get calls from dentists who are opening in a month and want to be in-network with all companies at their opening date.  Not only is that not possible, dentists in this position end up either having to wait for a couple of months to get contracted or they sacrifice potentially higher fee schedules in order to get in-network faster.  It’s almost always worth waiting an extra month or two to be in-network than agree to a substandard fee schedule just to get in-network quickly.  The negotiations process takes 90-120 days with many companies so the farther ahead you plan, the more options you create for yourself.  Whether you hire out for insurance credentialing/negotiations or do it yourself, here’s a list of the process we go through which may be helpful for you to consider as you move towards your opening date.


  1.  Do a demographic analysis of the area by researching who the top employers are and which insurance companies are tied to those employers.  This will allow you to see which insurance companies may be more important to consider participation with depending on your particular market.  There’s no quick and easy way to do this, but with a combination of online research coupled with calls to HR departments you can verify which insurance companies are affiliated with each employer.
  2. Get a third party fee analysis and set your fee schedule.  We include this for our clients but any individual dentist an order a third party fee analysis from various sources.  These can be obtained for less than $200 and we encourage you not to take a short cut here.  Don’t be tempted to take your current associate fee schedule or ask a peer for theirs to copy.  If they haven’t rebalanced their fees appropriately you’re just borrowing a poor fee schedule and applying it to your new practice.  How you set your fees is VERY important for fee schedule negotiations.  If you set your fees skewed too low it can impact the offers from the insurance companies.  By the same token, if your fees are off-the-charts high the insurance companies may assume you are artificially inflating your fees for the purposes of negotiations.  You want to choose fees that you will be comfortable implementing for your cash paying patients.  Do not play games and try to negotiate high fees up front only to really discount your UCR fees when you open.  Insurance companies are now comparing fees submitted for negotiations with actual claims your office submits upon opening to see if they match.  If they do not, it can impact your future negotiations ability.
  3. Choose your top (about) 30 fee codes to focus negotiations on.  About 90% of a general dentist’s production comes from about 30 fee codes, fewer for specialists.  Don’t obsess about getting higher fees on codes that you’re unlikely to utilize, get very serious about the fees on your top codes.  If your state has passed the law to allow you to charge your full fee for non-covered services, keep that in mind as well.  You don’t want to waste one of your limited negotiations if it’s a code you can probably charge your full fee for anyway.   Once you go to the reps to negotiate you want your fees and your code selection to be FINAL.  Do not start changing fees or the codes you want negotiated after you’ve started the process or you’ll slow things down or even cause the rep to start over.  This creates delays that most startups can’t afford to have.
  4. Even if you are an associate at another office and are in-network there, in general you do NOT want to do an “add a location” if the company negotiates fee schedules.  Usually you will be able to get a better offer doing a fresh negotiation based on the top fee codes you’ve chosen as most important.  Remember that your new office fee schedules will be tied to your tax ID number and are not a reflection of your associate office.  The exception to this rule is United Concordia which follows the dentist’s license rather than TIN.  Whatever initial contract you sign will not be negotiable again for 18-24 months in most cases so you want to be sure you have structured your initial contracts with your new TIN correctly from the beginning because it will be a couple of years before you can usually renegotiate.
  5. If you are an associate at a corporate office currently, do NOT assume that they have negotiated a better fee schedule than you, as a solo doctor, can obtain.  Corporate and individual negotiations are different departments and negotiating as an individual allows you to focus on the codes that are most important to you personally.
  6. A very important component of insurance participation now is understanding the difference between direct contracts and contracting with shared/third party administrators.  You can be paid differently on the same patients oftentimes depending on how you’ve chosen to contract.  In general, if you are directly contracted with an insurance company those fees take priority.  If you are contracted with a third party administrator (such as Connection Dental, DenteMax, Maverest, etc.) then they will pick up a large list of companies (except the ones you already have a direct contract with).  There are pros and cons to third party administrators, the main issue is to be sure you understand exactly what you are signing up for.  They can give you broad exposure to lots of insurance companies however you want to understand how they work and be in control of the process.
  7. Be aware that there is little turnover with reps in the insurance industry.  The reps you work with now are likely to still be there in a couple of years when it’s time to renegotiate.  Know that “playing hardball” is not about being rude or demanding, it’s about having a very clear understanding of your market and getting the best offer available that fits your particular procedure code mix.
  8.   Have a good idea of what you would consider an acceptable fee schedule before you begin the process.  We often get asked what is a “good” amount of write offs for a fee schedule.  Know that usually a 20% write off is going to be a minimum that can be expected and that’s in less competitive parts of the country.  On rare occasions we’ll see lower write offs in an area that is less saturated or for specialists but in general, if you are not going to accept an offer that has a 20% or more write off then you should consider pursuing a more fee-for-service business model and allocate more towards external marketing instead.  Some areas can expect to have write offs in the 35-50% range as standard.  In general the Midwest is typically less saturated while some of the more saturated/harder to negotiate areas are currently California, Florida, New Jersey, Ohio, Pennsylvannia and some other specific cities such as the Chicago area.
  9. Be aware that it’s taking far longer to get in-network with some major carriers, even if you are already credentialed at another location.  For example, Delta in Texas and Georgia are taking a very long time to process and are requiring additional follow up.  There are bottlenecks with certain companies in certain areas so be sure to regularly follow up to get your final effective dates.
  10. We can’t stress enough, plan early.  The three things you will need in order to begin contacting insurance companies for negotiations:
    1. An official address (signed lease with an address that has been confirmed.  If it’s a new building and the official address hasn’t been verified or a suite number gets changed it can cause serious delays later to change)
    2. Your tax ID number that will be listed on your W-9
    3. A phone number (which can be a Google number initially and then transferred to a permanent number later if needed).

Know that there will be staggered effective dates and some may trail your opening date.  That’s ok, you’re off to a great start and the choice to wait for the highest options is always worth a few weeks delay.  You will have set your foundation well for the long term!