Is My Attitude Towards Dental Insurance Effecting My Practice?
Dr. Allen Franco – Case Study #521
Dr. Franco contacted McKenzie Management with a frequently asked question…”Since I am not as busy as I would like to be right now, should I sign up to be a ‘participating provider’ for a particular plan?” The answer depends on the current state of the practice and the local economy as well as the future vision of the practice. Dr. Franco had a hygienist 3 days a week and his practice had been operating 3 years. They were averaging 8 to 12 new patients a month, did not accept assignment of benefits nor did they participate with any PPO’s. His fees were also higher than many of the dentists in his area.
Dr. Franco purchased his practice from a retiring dentist who also did not accept insurance assignment. The purchase was made during the economic incline and everyone was happy, including dental consumers. Dr. Franco followed in the footsteps of his predecessor, as he was also not interested in getting involved with the time-consuming paperwork that is required when working with insurance processing and follow-up. He also wanted to avoid his patients making treatment decisions based on “What will my insurance pay?”
The business decision he made three years ago regarding how he would manage his practice, coupled with a decline in the nation’s economy affected the practice dramatically over the past six months.
Production and collections dropped 25% over the past six months. New patients dropped from 20 a month to an average of 7 a month. Gross wages for his team increased to over 33% of his net collections per month instead of 26% last year. Hygiene demand per week dropped due to patients leaving the practice to go to an office that “accepts” their insurance plan.
What are his options?
Reduce the practice fees for his restorative and prosthetic procedures. These are the areas that he feels may be higher than many of his colleagues in the area.
Participate with PPO plans that are given to employees of the largest employers in his area. Should he elect to take this step, he hopes that having his name on the “lists” will bring in more new patients. Also, by participating, more of his current patients will stay with him instead of seeking another local dentist that will accept their plan.
What does he need to know if he elects to participate?
It is very important to review the contract with the PPO plan to have a good understanding of what the plan considers to be “not covered” and “not allowed”, as well as other clauses, such as missing tooth and waiting periods. Dr. Franco’s business team must be well-versed on the plans in order to be better prepared in communicating the approximate patient portion, even though the financial policy clearly indicates that the patient understands that they are responsible for any amount that the plan does not cover. Bottom line – review the contract carefully and understand how it will effect the practice.
Dr. Franco should not expect that by signing the contract with a PPO, the floodgates would open with new patients. His name must be added to the website and won’t show up in the printed list until it is published again….and there is still no guarantee of additional new patients.
Each patient that is a member of the plan and has currently been paying full fee for their services will now enjoy the lower fees and patient portion as well. It is imperative to run a computer-generated report from his dental software to see how many patients he has in the practice that will be affected by this change. A mathematical estimation can be made based on an average fee per patient to determine what the financial ramifications will be.
Dr. Franco must make strategic changes in his current office policies regarding dental insurance. It is imperative that his practice be as profitable as possible, making it necessary to alter his personal feelings about dental insurance and “play the game”. However, before taking this step, it was recommended that all his current business systems be evaluated to be certain that they are efficient and the team is trained in excellent customer service and developing a plan to lower expenses under the existing circumstances before taking this major step.
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