Escaping Dental PPO Contracts Pt 5: Retaining The Right Patients
All of our clients share the same primary concern about working with us to reposition their insurance contracts and network statuses: what about losing patients? Won’t they go somewhere else if we leave the networks their plans access? How are we going to increase our income without increasing our patients’ expenses?
Sometimes this fear is based on past experience. Maybe they tried to leave a low-reimbursing contract in the past, either on their own or on the advice of a consultant, and suffered high patient attrition as a result. Or maybe it’s just an assumption based on their current understanding of how patients use their dental benefits and find new dentists.
Wherever it comes from, it’s a totally reasonable thing to worry about. It’s our primary concern too. Everything we do is centered around increasing the revenue your dental practice generates, without sacrificing your existing patient base. And because we focus on doing one thing, and doing it very well, we’re able to accomplish both of those goals for our clients.
We project between 2-5% patient attrition on average for our clients over the course of their entire case. At the same time, dental practices we work with see their annual gross revenues increase by hundreds of thousands of dollars by following the strategies we create for them.
Let’s talk about how we create powerful revenue-growth strategies by:
- Understanding your patient saturation, both in and out of network
- Having a detailed understanding of the types of plans patients bring to your practice
- Data backed analysis of In vs Out of Network reimbursement rates
- Anticipating and meeting patient expectations
How To Set Your Office Fees Correctly
Let’s say that, for example, your highest patient-volume contract has four different benefit plans your patients use to access you in-network. Let’s call those plans PPO, SuperPremium, Bargain Individual, and Federal Benefits. Each of those plans have different Out of Network Maximum Allowable Charge (MAC), and possibly different in-network fee schedules.
Right now, your UCR fee for a D0120 is $80. In the fee schedule you have through your direct contract with the carrier, your contracted fee is $26. The SuperPremium plan would pay you an out-of-network maximum of $65 though, and PPO has a MAC of $63. Bargain Individual pays $26 both In and Out-of-Network. Each of these plans can access each other’s fee schedules, because they’re all under the same contract. So, no matter what plan you’re submitting claims to, all of them are going to reimburse you the contracted rate of $26. So your UCR fee doesn’t matter, nor does each plan’s individual MAC. It always goes down to the lowest possible contracted rate each of the plans can access.
If you were to leave those lower paying plans, you could then align your UCRs with MACs from the higher-tier plans your patients pay for. This would allow you to maximize the revenue you’re able to generate from every patient you see, without creating unexpected expenses for them at the front desk.
But wait, what about the patients who chose the Bargain Individual and Fed plans?
That’s why we did all the analytical work of figuring out exactly how many of your patients use each plan. Let’s say you have 100 patients in a month with benefits under this contract. 90 of them have the PPO plan, 4 have SuperPremium, 3 have Bargain Individual, and 3 have Fed.
Six of your patients are going to experience a significant disruption to their expected customer experience. They’re going to owe something they expected to be free. They’ll probably be pretty upset if they have to do that. Why do they have to pay more when other patients don’t? Because the plans they chose were either free from their employer, or the cheapest option available to them. These low-paying, bargain plans have fee schedules that are not designed for private practices.
If you own your dental practice, or if you’re a sole provider within a private practice, it is nearly impossible to have the patient volume you would need to actually profit from treating patients who chose those low-reimbursing plans. These plans create negative yield for not only that particular plan, but any other PPO or SuperPremium patient in your practice.
You can’t control your patients’ decisions. You can’t pick their plans for them. Are you willing to sacrifice revenue for each of your 100 patients, in order to keep six of them happy? Or would you rather make thousands of dollars more for that single procedure in one plan for one month by keeping 94, and help those other 6 patients select a plan during open enrollment that is more in line with your office?
Make More Money, Do Less Work, Lower Your Overhead, Get More Time
Even negotiating higher reimbursements can affect a portion of your patient base. These bargain or discount plans may not transition into a higher in-network fee schedule. Ultimately, this is about the Quality of each plan, not your Quantity of patients.
Focusing on quality of plan instead of quantity of patients can lower your overhead expenses as well. If you don’t have to see as many patients as you possibly can each day, because you generate more revenue for each of them, then your variable expenses will go down as a result. So you can spend less while making more, and do it in less time than you were before.
Having the right patient saturation in the right plans can make your dental practice into a profitable business.