Managed PPOs for Practice Profitability

PPO insurance plays a large role in most practices. How well a practice manages its PPO participation and reimbursements can be a significant factor in that practice’s profitability. The following four steps can help practices more effectively manage PPO revenue to increase profitability:

1. Evaluate Your Office Fees.
The market rate for dental services is set by the usual and customary fees (office fee schedule/UCRs) charged by dental practices. Most insurance carriers target a discount of at least 25 percent or more off the average market rate for dental services for their insured members. Given that office fees correlate to the rate of PPO reimbursements, all practices should regularly evaluate their office fees and increase them to reflect the increasing cost of providing quality dental care. Practices concerned about alienating cash paying patients may consider implementing an in-house discount plan where they can offer discounts for a low-cost membership fee.

2. Review and Analyze Your In-network Participation.

Review in-network plans and the reimbursements under each plan. Use the practice’s top 25 to 35 most utilized procedure codes and chart the reimbursements under each plan. Compare and rank each plan based upon the level of reimbursement and the approximate number of current patients insured under each plan. Identify any reimbursements that do not provide an acceptable margin or exceed the cost of the performing the associated procedure.

3. Understand How You Participate In-Network With Each PPO plan.

In-network participation has become more complex over the last several years due to the provider network sharing relationships amongst insurance carriers. For example, PPO insurance carrier Principal and PPO insurance carrier Ameritas share their in-network dentists with each other. A dentist contracted with only Principal may be considered in-network for Ameritas insured patients as well, and vice versa, because of this shared network relationship. Network sharing relationships can lead to unwanted participation or, alternatively, present opportunities to obtain higher reimbursements (i.e. participation optimization) for an insured patient group. Thus, it is important to review and understand the manner in which the practice participates in-network with each plan.

4. Negotiate Reimbursements, Optimize Participation and Terminate PPO Plans.

Contact the PPO insurance carrier’s provider relations department and request that they review the practice’s current reimbursements for the purpose of negotiating an increase. Be sure to use the PPO plan comparison chart to review any increase offers and calculate the dollar increase and percentage increase per code. If the PPO insurance carrier is unwilling to negotiate, ask for the reason why, when they will next be willing to negotiate, and schedule a follow-up date. Then evaluate whether you can participate in-network through a shared network relationship that will lead to higher reimbursements. Be sure you understand benefits and risks before attempting to adjust any current in-network participation. After exhausting all negotiations and evaluating any optimization opportunities, consider terminating the PPO plan(s) that rank lowest on the comparison chart, especially those plan that cover a relatively small number of the practice’s current patients.

For additional information about managing in-network PPO participation, negotiating reimbursements, optimizing PPO participation, or credentialing and in-house discount plans inquire about Unitas Dental.

Mike Alder is the President of Unitas Dental. Unitas Dental is one of the largest PPO Management service companies in the United States representing over thousands of Dentists in 47 states.