Identifying the Most Important Benchmarks that Indicate Whether a PPO is Good, Bad, or Manageable.
From startup to enterprise most dental practices aren't strangers to insurance. Being a part of a preferred provider organization (PPO) or other contract arrangement can bring great advantages to your office through increased patient volume and revenue.
Whether you’re fully fee-for-service or are participating with one or many types of insurance — we know and respect that every practice and their relationship with conventional coverage is different. However many offices find themselves blindly participating with unprofitable PPOs. As a result, dental teams work long hours, lose money on procedures, and deal with unnecessary hassles.
It goes without saying that busy does not always equal profitable. If you’re asking, “How can I increase revenue when my calendar is booked out for months?“ The answer is through strengthening your coverage strategy. So how do you know what to look for? Keep reading to find out.
Questions to ask when looking at your practices PPO performance
- What are your most valuable and frequently used codes?
- Which carrier fee schedule works for your practice and is appropriate for your market?
- How many active patients do you have from each payer? What is your patient retention rate?
- Why are you deserving of better reimbursements? How will your patients feel the difference?
- Is there a plan that is more of an administrative burden than others? In other words, do you spend most of your energy on one resistant carrier?
This information will be essential if you choose to renegotiate. We talk more about negotiations in Part 2.
- Adopting the Necessary Mindset to Confidently Improve PPO Participation
Key indicators that a PPO is positively supporting your practice and patients
- Ability to uphold a moderate fee schedule while maintaining a high rate of collection: If you find that your practice is able to maintain a moderate fee schedule (which is competitive in the marketplace) while simultaneously maintaining a collections ratio of 97 or higher, This can serve as an indicator of success.
- Growing active patients from the payer that match the practice’s ideal patient demographics and behaviors: Look for trends within your active payer population. If patients are routinely visiting 2-3X a year and accepting recommended care, this is a sign that the payer is providing access to quality coverage.
- Renewals with no changes to fee schedules or other terms: Meaning the payer has consistently renewed your contract without any changes or requests to renegotiate.
Warning signs that indicate poor PPO performance
- Delayed payment processing: How quickly you get paid is the lifeblood of your practice. If your office is fielding reimbursements for upwards of 60 days you are essentially financing treatment for insurers which can become unsustainable overtime.
- Excessive requests for documentation: This can become problematic when it starts to interfere with patient care and lead to unexpected rejections for common procedures. Resulting in delays in treatment, more paperwork for your front office staff and even increased costs due to higher instances of aging accounts receivable.
- Inadequacies in patient coverage impacting the ability to accept care: If you find that patients are having difficulty getting the treatment they need due to excessive cost sharing (e.g. high deductibles, coinsurance and copays) then it may be time to explore alternative financing or coverage solutions that will be more beneficial for your patients. Overly restrictive plans can negatively impact a patient’s decision to move forward with treatment.
Why personalizing your approach to managing PPOs is crucial for success
It is essential for dental teams to take into consideration their patient mix and financial goals when assessing which PPOs should be kept, dropped, or renegotiated. Making sure you understand the trends of each payer in your office before taking any action will help you make a more informed decision.
At the end of the day, being part of any managed care plan should be an added benefit for your practice and patients. Taking the time to look at your data and adjust your participation strategy accordingly can make all the difference.
In Part 2 of this series, we will cover how to negotiate with payers and find leverage points that can help get you the reimbursement you deserve.
This series is produced in partnership with Teresa Duncan.
Teresa Duncan, FAADOM, MS is the author of Moving Your Patients to Yes: Easy Insurance Conversations as well as a contributing author to the ADA’s annual CDT Companion Guide™. Her podcasts “Nobody Told Me That!” and “Chew On This!” provide regular coding and management updates. Teresa was recently presented with AADOM's Lifetime Achievement Award.
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