2.24.17 Issue #781 info@mckenziemgmt.com 1-877-777-6151 Forward This Newsletter

Belle DuCharme, CDPMA
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Should You Cancel In-Network Insurance PPO Contracts?
By Belle DuCharme, CDPMA

CEO Training Case #CEO450

“Dr. Memo” (names have been changed) signed up for McKenzie Management’s Dentist CEO Training Course because she was purchasing the practice where she had been an associate for ten years. She wasn’t happy with the way the practice was currently being managed and wanted to make some positive changes. Her vision of a fee for service practice with limited PPO out-of-network was what she wanted to create from the current practice, which was in-network with six different PPO contracts and chaotic with the pressure to keep eight treatment rooms filled. Often Dr. Memo felt that trying to balance numerous staff to treat a large volume of patients was a break-even situation. 

She was aware of total production and collection statistics, but didn’t know the breakdown of what accounted for in-network insurance, fee for service numbers, and out-of-network insurance numbers. She had heard from experts that it wasn’t wise to cancel any contract until she analyzed the impact each PPO contract had on production/collection numbers. 

Most major dental software such as Eaglesoft and Dentrix can provide reports of this information with a search for the number of patients on a plan and the total production generated from each group. Your dental software support team can help you with this if it is difficult to find. Remember too that you must check the terms of each contract for instructions to follow when cancelling. Some plans require a 30-day notice, others require a year and some state that you must send a letter to all the patient members of your intentions.

Before you embark on a campaign to free yourself from dental PPO contracts, read the following list to make sure you have done your homework.  

Before cancelling your PPO contracts:
What percentage of my production and collections come from the patients in this PPO?
What is the amount of revenue written off per month with this PPO?
Check the referral report to see how many patients come to you from insurance lists and from this PPO.
How much do I have to discount my normal fees for this PPO?
If I lost half of the PPO patients, would I still have a very good chance of being busy? If I lost all of them, would I still be OK?
Will I have to increase my marketing budget to attract new patients to replace those leaving due to the termination of the contract?
Does this PPO have decent out-of-network benefits?
Are the patients on this PPO young and can they only afford the in-network benefits, or are they long-standing patients of record with good incomes who can absorb more out of pocket costs?
Have I tried talking to the PPO to see if they will consider increasing their reimbursement to me?

Can your practice let go of the PPO?
Are the patient numbers there to fill an additional hygiene day per week if they had the time to reactivate patients?
Do new patients wait more than a couple of weeks to get into hygiene because the schedule is maxed in capacity?
Are your dentist producers appointed out more than a couple of weeks?
Are you examining more than 160 patients per month?
Do you meet with your team to discuss patient education and treatment acceptance? If there is more time will they use it to improve treatment acceptance?
Can you increase your visibility through improved signage or is access to your practice limited by parking restrictions or location?
Is the number of dentists in your area increasing or decreasing relative to the population?
Are other dentists in the same area dropping plans (thus causing an influx of patients from that plan into your office)?
Are you producing everything you can produce, yet you still are not experiencing a good or growing bottom line?
Have you had a reputable practice-management consultant look at your practice to determine if you could maintain or increase production without the PPO?
Are you experiencing (or about to experience) a loss of any producers in the practice due to life events such as retirement, childbirth or moving?
Can you improve the types of services offered to patients and refer out less treatment? For example, can you do more endo, implants, or ortho?
Have you talked to colleagues in the area who have dropped this plan? What has been their experience?

Practice due diligence before pulling the plug on the PPO. To learn how to manage your practice for success, call McKenzie Management today and schedule a business training course.

If you would like more information on McKenzie Management’sTraining Programs  to improve the performance of your team, email training@mckenziemgmt.com

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