Adding a PPO Contract
For many years most areas of our country enjoyed a strong economy. Dentists had a full schedule with less outside advertising and PPO participation wasn’t always needed to get patients in the door. Fast forward a couple of years and economic conditions have many fee-for-service practices questioning how to get their new patient flow rolling. Some areas have weathered the economic storm with barely a blip on the radar but try practicing in an area where many of your patients are involved in an industry that’s taken a severe beating in the economy and you may wonder how things went south so quickly. One question being asked is if it’s a good idea to add PPOs to stimulate practice growth. Sometimes the answer is yes but before you jump on the PPO bandwagon be sure you have carefully been presented the best options for your situation.
We get many calls from Fee-For-Service practices considering adding PPOs but want to be sure they are not going into new contracts blindly. Insurance participation has now shifted to where most practices are considering some level of insurance participation and want to be sure that if they add a PPO that they are doing it with the smartest path and the highest fees. Most dentists we talk to want to participate with the least amount of insurance possible while also positioning themselves to weather future changes coming in the industry and we are here to help you succeed with your chosen route.
With our services we first research your area to determine what the major employers are and which plans would be the best to consider. Then we request fee schedules on your behalf and negotiate those so you are sure you are receiving the best offer for your area. As with all of our packages, we focus our negotiations on customized fee schedules when possible so that any negotiation room is tied to your top producing fee codes. Remember, about 90% of a general dentist’s revenues are tied to about 30 fee codes so custom negotiations have a big pay off with profit increases. Once we have received back all offers we look to see the effect that accepting a fee schedule will have on your current patient base with patients who are currently seeing you on an out-of-network basis. Although new patient flow is critical to a practice, it’s equally as important to recognize the effect on current revenues by patients who have already proven to you that they will see you on an out-of-network basis. We will determine what the write-offs would be with your current patient base before ever suggesting you add a new plan. Because of our extensive work across the country we know what is considered a good fee schedule offering for your area and which should be declined. You will not wonder if your offering is a good one or not, we will give you all the necessary feedback to determine which are the best fits for your practice.
There are some other factors to consider if you are fee-for-service and considering going in-network to increase new patient flow. Remember you are competing with offices who have already fine tuned their systems to utilize PPOs efficiently. Adding PPOs is not a quick fix solution but rather an overall system of practice management which require strong education skills by your front desk personnel, knowledge of filing insurance claims properly and familiarity with the rules of PPOs. Does your office know that you cannot typically bill a panorex and bitewings on the same day? Do they know that many insurance companies are starting to consider a post as part of a crown and will not pay both procedure codes if they are billed on the same claim? There are many loopholes insurance companies have for not paying claims if they are not billed according to the terms of the contract so be sure you have factored in the learning curve before you jump on board.
Finally, do not underestimate the value of your current patient base that is seeing you on an out-of-network basis. If you are an in-network provider and you drop the PPO to go out-of-network it typically requires hours of time for your front desk to communicate with your patient base about what the difference is and what that means for them. A fee-for-service practice is already comprised of patients who have the non-PPO mentality, a very valuable asset for your practice. If, by chance, you try adding in a PPO, get disappointed by the lack of new patients while seeing your current patient revenue downgraded, then drop the PPO after giving it a few months, you then have a patient base who has to be re-educated.
The most likely candidates for successful PPO integration are practices who have open chair time and are able to add PPO plans that the current patient base does not utilize (keeping current patients from getting discounted rates and lost revenues). Although new patients generated this way will have discounted revenues, some revenue is better than no revenue in the eyes of many practices.
In short, PPOs are a potentially valuable way to add new patient flow, but analyzing your current patient revenues is critical. In many cases for an established practice that is having some new patient slow-down it may be better to continue to operate on an out-of-network basis but ramp up marketing in other ways such as web site development, direct mail or radio/tv advertising. In the example mentioned above there was an immediate cost of $15,000 to the current patient base by going in-network. That buys alot of advertising so we will help you choose carefully!
We offer complimentary phone consults so if you are considering adding a PPO but want to discuss your individual situation before proceeding, call our office at 855-327-9125 and schedule a time to speak with Sandi, one of our co-owners to get specifically tailored feedback. Remember that the first PPO fee schedule the insurance company gives you may not be their best offer. Your best shot of making PPOs profitable is to make sure you are first getting a fee schedule that works for your office.