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  01.20.05 Issue #150

Take the Insurance-Free Plunge Without Going Under

Sally Mckenzie, CEO
McKenzie Management

The temptation is intoxicating and many have been so enticed they've leapt into the waters of the cash-based practice with both feet and no life preserver. The allure is difficult to deny - no insurance, no forms, no hassles, no headaches. Unfortunately, the sound of money in your pocket can be so powerful the voice of reason is never heard. Before you dive into the waters of what you think is prosperity, make sure you're not swimming with the sharks.

Do not plan to jump ship overnight. In most communities, unilaterally ceasing to take insurance will have you drowning in a sea of red ink. Carefully plot your strategy to increase revenues, patient services, and overall quality of care before you order the managed care plans to walk the plank.

  • Ease out slowly. Begin to freeze or greatly reduce participation in insurance plans. Maintain existing levels but refuse to accept new managed care patients. This will allow the practice to build the volume of new, full fee patients and gradually dilute the influence of managed care of the practice.
  • Adjust your fee schedule. Establish a solid fee schedule based not on insurance reimbursement rates but on the time required for each procedure, the fixed expenses necessary to run the office, variable expenses including supplies and lab fees, income required per hour to compensate you, the dentist.
  • Know your neighbors. Study the fees of other dentists in your area as well as the income demographics of your patients. Base your fees on the quality of your work and the overall quality of your team.
  • Build up practice profits through increased production. Improve your treatment presentation skills and you improve your treatment acceptance.
  • Take advantage of every appointment and find out about what's on the minds of your patients from an oral health standpoint. Ask if they have questions about new treatments they've seen in the news media.
  • Tell them about the continuing education program you and your team participated in that will benefit them.
  • Explain any new services that are available through the practice.
  • If you've been seeing a patient for three years and haven't asked them lately about how they feel about the condition of their mouth, now's the time.
  • Diagnose based on the patients' needs and wants.
  • Schedule to meet daily production goals.
  • Shore up your hygiene recall and involve hygiene in identifying patients that have unscheduled treatment plans.
  • Identify the two worst insurance plans. Explain to patients, in person if possible, why you cannot continue to accept those insurance plans but that you sincerely hope they will stay with the practice.
  • Educate patients on the limitations insurance is placing on them.
  • Educate staff on the importance of providing the highest quality of care, not the cheapest dentistry.
  • Take a good look at customer service. Examine the entire patient process from the first phone call until the moment the patient pulls out of the parking lot. Is the practice friendly and inviting? Do patients feel valued and appreciated or do they feel like they are just another stressor in your anxiety filled day?
  • Tell patients that you welcome referrals and acknowledge those patients that have referred.
  • Offer patients other patient financing options, such as those offered by CareCredit.

Not every practice can be a luxury dental boutique that can insist on cash up front. In fact, few practitioners would feel comfortable with such an arrangement. However, practices can significantly curtail the influence of insurance plans without undermining the profits or needs of the patients. But it does require a plan and a total commitment to enhancing those factors that set your fee for service practice apart from the managed care-based practice down the street.

If you have any questions or comments, please email Sally McKenzie at

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From Masters of Tasks to Empowered Leaders of Change

Nancy Caudill
McKenzie Management

As the often and overused cliché affirms, "Change is difficult." And we've all experienced the fear that comes with change, fear that serves as a tether to the status quo. Countless dental teams teeter at the edge of tremendous professional achievement, but their dread of the unknown is often so much more powerful than their belief in the possibilities that change holds.

In working with dental practices around the country, McKenzie Management consultants consistently find that when doctors are able to relinquish the false security of the status quo and are willing to give staff the freedom to excel, the results are nothing short of phenomenal.

I recently served as the McKenzie Management point person for a dental practice located in the mid-west. Like so many dental teams before them, success required taking a leap of faith far into the unknown. Here's their story.

Two dentists run this suburban practice. Three employees work at the front desk. There is a full-time and a part-time hygienist, and two dental assistants. At the time McKenzie Management was called in, there were no job descriptions for any of the positions. One of the front desk workers, "Betty," had recently been assigned the role of office manager and was very uncomfortable with this position. She didn't want to be responsible for "making" other employees do their jobs or serve as the go between for the doctors and staff.

In addition to being the designated "task master" of sorts, Betty was responsible for accounts payables and managing a small apartment complex - a role she felt wholly unprepared to handle. Betty had been assigned responsibilities that she was neither equipped nor trained to carry out. Consequently, the doctors were becoming more and more frustrated. They felt that tasks weren't getting done and the only thing they could do was complain to Betty, the reluctant office manager. This was particularly stressful for one of the doctors who has strong micro-management tendencies.

Meanwhile, serious problems were occurring with practice revenues. Accounts receivables was more than five times the monthly net production, well beyond the recommended one month benchmark. In addition, nearly $120,000 in outstanding insurance claims had piled up. What's more, although the practice has been in operation for more than 50 years it had only one full-time hygienist. The part-time hygienist came in just one day a week and the schedule frequently was laced with holes.

A Customized Plan
Every dental practice is different and in some cases an office manager is necessary and tremendously effective. In this case however, it was clear that the best approach would be to create three specific positions at the front desk and give each a clear job description. The position of "office manager" would be eliminated and in its place would be the schedule coordinator, financial coordinator, and patient coordinator. Each person would have clear responsibilities and would be accountable for specific outcomes. A part-time bookkeeper would be brought in to manage the accounts payables and the rental property.

The doctors were concerned. They believed that eliminating the position of "office manager" meant that they would have no one to go to with their problems. There would be no one who would monitor and "make sure" that everyone was doing what they were supposed to be doing. Who would be the intermediary? They were being asked to empower and trust their team. They would have to change not only how they do things but also how they view the roles of their staff. From autocratic to empowerment - change was, indeed, very difficult.

Betty was assigned the responsibility of schedule coordinator. She was elated to surrender her role as task monitor/office manager. Her salary was kept in tact and today she happily embraces the critically important responsibility of scheduling to meet production goals. The patient coordinator ensures the hygiene schedule is full and the part-time hygienist's days are steadily increasing. The financial coordinator files insurance claims in a timely manner and is addressing the $118,000 backlog. Each month the team evaluates the practice statistics. If an area does not achieve its goals the doctors address the matter with the individual responsible for that system. They no longer need an office manager to serve as messenger; they are discussing issues directly with each employee on the 9-member staff. Over the last several months patient retention has increased significantly, monthly production goals are regularly exceeded, and overhead is well within striking distance of the 55% industry benchmark.

No longer tethered to the status-quo, this practice now has an empowered team whose members are free to make significant contributions and are rewarded for their efforts. But achieving that outcome required an acceptance of change and a willingness to envision the possibilities. Once skeptical and reluctant, today the doctors and staff are reaping the professional and personal rewards of a job well done and a practice well run.

With 2005 now underway perhaps it's time for some real change in your practice. Click here for more information.

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Write-off! What write-offs are you talking about?

Tom Limoli
Atlanta Dental

Is your practice management software working for or against you? Are you getting at least basic information to make sound business decisions, or is your computer nothing more than a glorified pegboard?

Have you ever heard your contemporaries make one of the following statements?

"If we were not a participating provider for ABC Dental Plan, we would not have had to write off the difference for all those crowns."

"Our office lost $ because we participate with ABC Dental Plan."

"Look at all the money you are losing by participating with ABC Dental Plan. Those write-offs should be going into your pocket, not the insurance company's."

Let me go on record as saying, "Never join or participate in any managed-care plan that reduces your usual fee unless you need additional patients to fill empty chairs."

Write-offs are most often associated with that which occurs when your usual fee in the open unrestricted marketplace is $800 and the plan's maximum is only $600. Did you lose $200 doing the procedure or did you never have it in the first place? A write-off is that which you intended to collect but were unable to do so. You did not and cannot lose that which you never had.

My point being - do not rely solely on the total dollar amount of financial adjustment to determine the stability and vulnerability of your participation with any specific benefit plan. Look at and closely scrutinize your data with the following specifics:

Utilization reports

By frequency - how many total patients have the plan directly reimburse you?
By total dollar - of those patients/plans that pay you, how much are they paying?

These reports will tell you from where your money is currently coming.

New Patient data

By plan - are these patients coming to you because of the plan and your willingness to wait on the check? By frequency - how many new patients are plan-dependent? In analyzing this data, remember that new patients are the lifeblood and lifeline of your practice.

Contract considerations

Exit clauses at 30-, 60- and 90- as well as 180-day intervals.

Don't write patients a blanket letter because it will always make your office look selfish and greedy. Have the courtesy to tell the patient face to face.

Your automated practice management system must be able to track multiple participatory fee schedules. Of utmost importance is the confirmation that your computer submits the right dollar amount to the right plan at the right time.

Right Amount

Does the benefit plan want you to submit the patient's claim with your usual unrestricted fee or some variation of a participatory reduced dollar amount? If you are submitting your usual fee, do you have to individually adjust the patient's account, or does your system automatically account for the discrepancy in dollar amounts?

Right Plan

Does your automated practice management system know which plan is assigned to which patient? Remember that plan specifics are based on indexing the employer, not the insurance company. An individual employer may have several benefit plans, but insurance companies have thousands. The individual patient record is assigned an individual benefit plan. Don't fall into the trap of indexing and linking individual patient records by "family" or "responsible party." You can't apply dad's overpayment to mom's out-of-pocket obligation.

Right Time

Does your automated practice management system know when to generate the claim? Can you submit the claim for the crown on the date of preparation or do you have to wait until cementation? This is a plan specific issue and has nothing to do with the revised ADA Claim Form.

With participatory plans you NEVER have open patient accounts receivable. These patients pay their dedicated portions prior to or at the time of service. No statements or invoices are ever issued to patients with reduced dollar participatory plans. Remember you agreed to contractually accept a reduced dollar amount for the completed procedure in exchange for the reduction and/or elimination of administrative aggravation.

Your point of control for the accountability and overall profitability of any and all participatory plans must be limited to your automated practice management system and never the operatory.

What write-off were you talking about?

Tom Limoli, Jr. is the author of the Dental Insurance & Reimbursement Coding and Claim Submission Manual. To order click here. Tom can be reached at 404-252-7808 or at


Insurance Codes

Unsure which ones to use?

This newly updated Dental Insurance and Reimbursement - Coding and Claim Submission manual is packed with additional descriptors and sample narratives to assist you in streamlining your coding accuracy. With this manual, your coding challenges are soon to be a thing of the past.


Missed Past Issues of Our e-Management Newsletter?

Sally's Mail Bag

Hi Sally,

If I keep my hygienist waiting because I can't go into examine a patient at the precise moment she calls for me, how can I complain about her running behind in schedule?

Dr. New Orleans

Dear Dr.,

Providing you trust the work of your hygienist, feel free to examine the patient whenever you have the time available or a natural occurring break in your treatment delivery, no matter whether she just seated the patient or just finished. Of course, this is subject to state make sure you check. You could also have your hygienist call you between scaling and polishing, which would give you some time leeway.

Hope this helps.



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