It's never a bad time to plan for the future and evaluate how transitioning bad PPOs out of your practice could bolster your bottom line.
It may seem counterintuitive — won't dropping PPOs cause patients to leave your practice? Possibly. So here are a few strategies you can leverage to help you both protect your practice and make your life easier.
Protect your practice and patients with better coverage
Dental insurance is a pain. Low reimbursements and claims denials (and the paperwork that goes into dealing with them) can negatively impact your practice's production and profitability, while high co-pays, premiums, and deductibles strain patients. Although you may feel eager to cut ties, before dropping any PPOs, you'll want to give your patients (and potential new patients) options for coverage.
A dental membership plan is perfectly designed to fill the coverage gap for patients whose insurance plans you no longer accept and also generates recurring revenue that can help cover any impact on production caused by patients leaving the practice.
In fact Kleer-powered membership plan patients perform similarly to patients utilizing a PPO except on average practices collect 36% more. This is due to the fact that dentists are paid at a rate that accurately reflects the total cost of production, versus having to accept the reduced rates of insurance plans.
Avoid leveraging dental discount plans
As you shed the burden of PPOs, you should also stop offering dental discount plans. Dental discount plans sponsored by PPOs or other third-party organizations determine fee schedules, treatment plans, and how your office gets paid.
This can cause financial strain on your practice, as the plan's predetermined pricing may not benefit you. And as far as being a source for patient loyalty, typically, patients purchase these plans for a one-time treatment, meaning the plans themselves do not change long-term patient behavior. In contrast to dental membership plans, discount plans lack hygiene and preventive care services which are key components that drive patient loyalty. In turn, the likelihood that patients renew their discount plan averages about 20-40%, whereas membership plan renewals average 75-80%.
Begin analyzing your PPOs
You'll have to crunch the numbers. Look at the amount of PPOs that comprise your patient base, the average reimbursement rate, the weighted average discount for each PPO, and the net production for each.
This math can be complicated, so we've provided the necessary tools and resources — to help you identify which coverage plans work for you and which do not. This step-by-step toolkit guides you through the full analysis and can help you create a plan to successfully transition away from your lowest-paying PPOs without impacting your bottom-line.
If you are still deciding whether to drop a PPO, this analysis may also shed light on plans you need to renegotiate.
Flex your negotiation muscle
If you want to negotiate your insurance plans, creating a proposal outlining your strategy is best. This will help you convey your position to the payer(s) and persuade them to accept your proposed changes. Here are some things to keep in mind when creating your proposal.
- Identify your most valuable codes. These procedure codes are performed most frequently and/or are the most expensive. Narrow your list to 10-15 codes to negotiate.
- Create a fee schedule proposal for the valuable codes. What fee schedule works for your practice and is appropriate for your market?
- Determine your value to the payer. How many active patients do you have from the payer? What is your patient retention rate?
- Consider how to gain leverage in the negotiation. But avoid bringing up termination unless prepared to do it.
Master the transition
At Kleer strengthening patient relationships and helping build financially sound practices is what we're best at. Schedule a consultation today to learn more about Kleer's powerful membership plan solution and how we can best support you through the transition!