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Howard Speaks: Is It Time To Reconsider Going Out of Network? by Dr. Howard Farran

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Categories: Practice Management, HR and Accounting;
Howard Speaks: Efficiency Isn’t Everything 

by Howard Farran, DDS, MBA, publisher, Dentaltown magazine

For decades, we experienced little to no inflation, so when you got out of dental school, it was normal to sign up to be an in-network provider with several insurance companies. Sure, their reimbursements stayed pretty much the same year over year, but so did your costs, which meant you could grow your practice by adding new patients. And being listed as an in-network provider with PPOs and insurance companies meant more exposure—and potential patients—for your practice.

But when labor and supply costs begin rising—especially as dramatically as they are nowadays—those set fee schedules become a burden, not a blessing. You could actually be losing money when you treat patients as an in-network provider on certain plans. (Yet another reason that I’m constantly telling my dentist readers that they need to know their practice numbers. After that exam and cleaning, did you make $5 or lose $9?)

Opting out of one plan at a time

I recently visited a practice in Glendale, Arizona, whose dentist did a deep dive on what each PPO and insurance company paid for the most commonly performed dental procedures. (That included regional variations within those companies—determining how much Delta Dental of California paid, for example, versus Delta Dental of Washington.) Armed with that data, at the beginning of 2022, they decided to go out-of-network with Delta Dental.

During the early months of the trial run, there was a tremendous burden on the treatment coordinator when it came to explaining the changes to patients: As a courtesy, the practice would still send a claim to the patient’s insurance company, but the reimbursement would likely be mailed to the patient, who would then need to sign it over to the practice. And the reimbursement likely wouldn’t cover 100% of the cost of treatment, so the patient would be responsible for any balance.

“The biggest thing to focus on is patient education and participation,” the treatment coordinator told me. “We had to tell them things like, ‘Your reimbursement is probably going to be a paper check, which will come in an old-school envelope, so be on the lookout for it.’ ”

Losses and gains

Now that it’s in the second half of the year, most of the practice’s patients are coming back for their second round of biannual cleanings. They’ve had the better part of a year to decide whether they wanted to stay at the practice even if they had to pay more out of pocket, which means the practice now has numbers that track whether its decision led to a loss of patients.

Before 2022, about 30% of its patients were using Delta Dental plans; during the year, the practice lost an estimated 10% of those patients—which means 97% of its patients are still with the practice. And the gaps have largely already been filled with new patients who either use higher-reimbursing PPOs or make use of the in-office dental plan, which brings more money to the practice than it was earning before.

Going out of network does mean more follow-up work for your finance team—calling and texting payment reminders and checkups with patients, going over lists of various claims still due from the PPOs and insurers. “You need a good support system,” the treatment coordinator says. But that’s well worth the effort when it comes to maximizing your practice profits!

Should 2023 be the year in which you drop your least rewarding PPO relationship and see what happens? If you don’t already have the numbers to help drive those decisions, start now, during the final months of 2022, and get ready to make changes in the new year.

Dentaltown founder Dr. Howard Farran would love to hear your thoughts about the ideas and suggestions he mentions in this column! Post your questions and comments below.
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