The dental practice I’ve worked in for more than 17 years has been fortunate in that we’ve not had to contract with multiple PPO dental plans in order to maintain a healthy patient base and attract new patients. We are, however, contracted in the Premier Dental Plan with Washington Dental Service (WDS). Three years ago when WDS slashed our contracted fees for both the Premier Plan and the PPO Plan, my office was forced to either make adjustments to patient accounts or set up our practice management system to use the WDS fee schedule for billing. Since my philosophy in practice management consulting with dental practices that contract with multiple PPOs is to use the fee schedule method, I knew exactly what I was going to do in my own practice.
The fee schedule method, or the write-off method, is a choice your office will make depending on your doctor’s philosophy and/or what your practice management system allows you to do. Many offices I work with have never used the fee schedule method because they either don’t know how to set it up or they haven’t heard a great reason to switch. My philosophy of using the fee schedule method differs from many other practice management consultants … and that’s OK because it gives you more information to choose what’s best for you.
Since my entire career in dentistry has been based on efficient systems, simplicity of tasks, and accuracy of data entry, using the fee schedule method in my practice and teaching it to client offices is a perfect match. Using the fee schedule method satisfies all three of these things. Let me elaborate on the reasons why.
· Accurate treatment plan estimates — Does it drive you crazy having to use a manual calculator, pull out your fee schedule sheet from the PPO binder, and write on your patient’s treatment plan estimate what the patient portion will be because your software won’t do it? Wouldn’t it save you a ton of time if you could just click “print” and your system would calculate the patient portion? When I’m working with an office and creating more efficient systems, this is a big one. The financial coordinator wants to give patients the most accurate estimate possible so they can prepare and budget properly. Using your PPO fee schedules in your practice management software can make this happen. If your system can more accurately estimate the patient’s treatment plan, you open up the possibility of other team members having the ability to print an estimate if your financial coordinator is not available.
· Collect over the counter — Payment on the day of service is one of the top five stats an office should monitor. (http://www.dentistryiq.com/articles/2012/11/the-stats-every-dental-practice-should-monitor.html). If this number is going to reach the 50% or more mark, your front office team must be able to quickly calculate the patient’s portion. Just like with treatment planning, does it drive you crazy having to use a manual calculator and work from a paper fee schedule found in your PPO binder? This is another benefit of inputting your fee schedules into your practice management software so you can have a more streamlined, efficient way of collecting at the time of service.
· Send out accurate billing statements — Do you wish you could send a full statement batch without having to go through and withhold the ones still awaiting insurance payment? Sitting on billing statements costs your office money. The longer you wait to collect the patient portion, the less that money is worth, and the more likely the patient will move your payment down the list of priorities. Using your PPO fee schedules in your practice management software will allow your office to send out billing statements without having to wait to make that insurance adjustment on the patient account.
· Eliminate inflated production numbers — Many of the offices I work with have production goals. However, those goals are based on “net” production, which means it’s challenging for the office billing the full fee to get a good picture of how making goal for the month is looking. If you’re using your PPO fee schedules for tracking production, you have a much more accurate picture of your actual production and what you can expect to collect over the next three to four weeks. This is extremely important to me because I want to be able to see what I’ve produced and what I’ve scheduled so I know what I have left to make goal.
While these benefits sound great, I still see many doctors and team members who don’t want to use their PPO fee schedules because they want to bill the full fee to the insurance company. I agree with you 100%. You always want to bill out your full office fee to the insurance company. This helps with collecting demographic data when they’re planning to increase the PPO fee schedule in the future. Check with your practice management software and see if it has the capability to bill PPO fees to the patient and full fee to the insurance company. (I know that Dentrix has this feature.)
The other argument I hear is, “I want my patient to see the adjustment.” But do they really care? In my opinion, the efficiency in your front desk systems and accuracy in your collections far outweigh the feelings of your patients. See if your practice management system has a way of showing patients what the full fee is on their treatment plan estimates. I know that Dentrix has a “compare to fee schedule” feature on printouts.
If you switch to the fee schedule method and you’re billing PPO fees to the patient and full fee to the insurance company, remember that your EOBs will look a little different. The submitted amount will be higher than the approved amount, and it will appear that you’ll need to do an adjustment, but you have already used the PPO fee on the patient’s account so the adjustment will not be necessary. Another tip is to use your full office fee for any procedure codes that are not included in the PPO fee schedule. If the insurance company reduces the fee, this is one of the few times an insurance write-off would be necessary.
This philosophy does not mesh with everyone. However, for those offices that want to streamline front office systems, collect more accurately over the counter, and send out accurate billing statements promptly, this is definitely something to consider.
Note from the author: If you are using Dentrix software, click here to read my blog titled “Fee Schedules . . . the Method of Choice for PPO plans."
Dayna Johnson, founder and principal consultant of Rae Dental Management, helps dental offices improve patient care, increase collections, and reduce staff headaches by implementing efficient management systems. With 18 years’ experience in the business and technical side of dental offices, Dayna’s passion for efficient systems is grounded in both personal understanding and professional expertise. She can be reached at [email protected] or visit her website at www.raedentalmanagement.com. If you’re a Dentrix user, you can also check out her blog with front office tips and ideas at thedentrixofficemanager.blogspot.com/.