“Insurance reimbursement rates have gone down consistently, even through the pandemic, even when costs are rising. So the dentists are getting less money coming back from the insurance companies and yet patient premiums have gone up. And so, where’s the money going?”- Kathlene Gerrity, Connecticut State Dental Association (CSDA) Executive Director in a July 2022 interview with NBC Connecticut.
In an August 2022 industry poll, the ADA reported that 60% of dentists surveyed responded that their insurance reimbursement rates have remained stagnant over the last year. 25% said that their rates had actually decreased, even in the face of ever-increasing operating expenses and record-setting profits for the dental insurance industry.
Dental practice owners are searching for a solution to low reimbursement rates. For many, the obvious answer is to go through the process of renegotiating their fee schedules. But which networks are even willing to negotiate higher rates? How much of an increase can doctors really achieve by playing along with the policies and procedures the insurance industry created? What incentive is there for networks to pay doctors more than the lowest rates possible? How can practice owners feel confident that at the end of the renegotiation process, they’ll have gained more than just a nominal increase to their fee schedules?
Are any of those even the right questions providers should be asking?
What if instead of asking nicely for higher rates, there was a way to tell insurance companies how they were going to pay you more?
Renegotiating PPO Fee Schedules Doesn’t Work
Here’s why the standard PPO fee schedule renegotiation process advertised by so many third-party negotiation services isn’t the best way to increase revenue for your dental practice:
- Time consuming: most dental insurance companies make it their policy to only offer fee schedule renegotiations every 24 months. This restriction is often reflected in the contracts providers have with insurance networks. And once you are able to enter into a fee negotiation with one network, you’ll be forced to go through the process at whatever pace they set. If you’ve ever sat on hold with an insurance carrier trying to get a straightforward answer to a simple question, you can probably imagine how prompt and responsive they’ll be when you’re calling to ask for more money.
- Lack of leverage: once you are able to enter into an official fee schedule negotiation, what leverage will you have? What incentive does the network have to offer you higher fees? From their perspective, you’re just one office in their massive provider network. And there’s always the slippery slope argument, “if we pay you more, that means we’d have to pay everyone more!” Their job is to make the most profit at the lowest expense possible, not to help you increase your revenue.
- Expensive: there are many third-party negotiation services you can hire to manage the process for you. It will still be time-consuming, and their services won’t come cheap. And while they may have more experience navigating negotiations, and some established relationships with insurance reps, they still won’t be able to guarantee you a significant increase in your reimbursement rates across the board. At the end of the day, it’s very difficult to say for certain that working with a third-party PPO negotiation company will be worth your investment.
- Lack of transparency: Before an insurance carrier is even willing to enter into negotiations with a third-party, that third-party consultant likely be required to enter into a nondisclosure agreement (NDA) with the carrier. This NDA limits the details of the negotiation process your consultant is allowed to disclose to you. If a third party is affiliated or has agreements with the insurance company you’re negotiating with, does that create some serious conflict of interest?
- Nominal increases: Any fee increases you’re able to gain for some procedures will likely come from reductions of other codes in your new negotiated fee schedule. This is a tactic that allows the carriers to avoid actually paying you more by downgrading or bundling your new higher fees down to the ones they lowered at the same time. E.g. raising your fee for composites, but lowering your fee for amalgams, and then downgrading all of your composites to the amalgams that you never even performed.
- Focusing on symptoms and not root causes: asking carriers for increased reimbursement rates when the entire contract itself is designed to be one-sided in favor of the insurance company isn’t going to solve the real problem here. There are still plenty of ways each insurance network can get around paying you more than the lowest rates possible, even if they do increase your reimbursement fee schedule.
Low reimbursement rates aren’t the real problem, negotiating PPO fees isn’t the real solution.
Just because you successfully negotiate for a higher fee schedule, that doesn’t automatically mean you’re guaranteed to start seeing larger deposits in your bank account.
Doctors lack adequate leverage to compel insurance companies to pay them substantially higher fees. One-sided provider agreements give carriers multiple tactics they can use to keep paying you lower rates than you deserve for the work you do. For example, provisions that give them the ability to bundle, downgrade, or deny coverage all together. Additionally, these provider agreements award the carriers the ability to access multiple leased networks they can potentially go through to pay you less than the fee schedule you negotiated for.
It’s a confusing game, with multiple layers of convoluted rules and time-consuming processes designed by the insurance industry to prevent doctors from gaining any sort of real advantage. This is possible because there is almost no legal structure regulating the relationship between insurance payers and providers. And what regulations there are can be overridden by contract terms.
So, what’s the answer? Is there any way you can create enough leverage to negotiate for a significant rate increase? Or, can you instead choose to stop playing the game all together, and change the fundamental underlying circumstances of messy one-sided insurance contracts?
Sure, it’s simple. Instead of asking nicely for marginal rate increases through a long and uncertain negotiation process, just tell the insurance companies that you want to terminate your contract altogether.
But that’s crazy, right? Don’t you need to be in network with all the major carriers in order to keep your patients? How do you know how much each network is willing to pay for out-of-network care? How can you leave insurance contracts without blowing up your patient base?
That’s what makes Solutions 101 different from other PPO negotiation companies. We don’t just renegotiate the symptoms. We treat the underlying problems. We can help you fully re-engineer your contract situation so you can stop playing the game, and start seeing your revenue increase dramatically.