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I just dropped a PPO. Here’s how I did it.

Aug. 7, 2020
Many dentists may consider dropping a PPO a scary proposition. Will they lose a lot of patients? Will they lose a lot of money? While there is much to think about, Dr. Chris Salierno dropped one successfully. Here's how you can take the step.
Chris Salierno, DDS, Chief Editor, Dental Economics

In May I wrote an article explaining how COVID-19 has accelerated my plans to drop my lowest-paying PPO. I followed the steps listed here and decided to cut ties with a PPO that I’ll call Plan X. Roll up your sleeves; let’s do this.

Which plan should you drop?

Sure, you can just look at your fee schedules and see which plans pay you the least and you can certainly start there. But you should also speak with your front desk team about which plans are playing games with your cash. Just because a fee schedule lists a D2740 at $800 does not mean you can expect to collect that much. Third-party payers can downgrade procedures (often shifting costs to the patient), exclude procedures, or otherwise generate red tape that makes it more difficult to get paid what you’re owed. I’ve also encouraged dentists to calculate their gross profit margin for their most common procedures. This is an excellent way to find out how low your fees can go before you start to break even or lose money.

How much of a hit will you take?

Use your practice management software to find out how many patients will be affected by your decision. I estimated about 7% of my patients were on Plan X, so that was my worst-case scenario in terms of patient loss. Can your practice take a hit like that? In my case, we’ve been operating above 100% capacity even before COVID-19, so we could definitely benefit from a lower patient volume. And if we retain a portion of those patients, we’ll at least be generating better revenue from that chair time. Which leads me to . . .

Have a plan to retain patients

You’ll have improved patient retention if you can present patients a solution when you break the news that you’ll no longer be in network with their plan. Some offices try to convert the patients over to an in-office membership plan. Others charge their regular fees and hope patients will be satisfied with reimbursement checks from the third-party payer. My office is going with a hybrid approach. We’ll offer a discounted fee schedule (technically not a membership plan as there are no annual fees) and any checks from Plan X will go straight to the patient.

Have a plan for replacing patients

I’m already operating above capacity, but it would be prudent for me to consider a worst-case scenario, such as every Plan X patient leaves and coincidentally my office experiences a slowdown for some other reason. We’re ramping up our marketing efforts now for that very reason. (Total sidebar: Whether you’re a marketing expert or novice, please consider taking this super short survey to be entered into a raffle to win a free CE course). You can still drop a PPO if your office is not currently at capacity, but you should seriously consider starting marketing campaigns prior to cutting the cord.

So, that was my decision process. Contractually we have 60 days of remaining in network with Plan X. As patients come into our practice, we are letting them know our decision. Anyone scheduled further out than the 60 days or anyone who has fallen off our radar will receive a polite letter. I’ll let you know how it goes.



Chris Salierno, DDS, is the chief editor of Dental Economics and the editorial director of the Principles of Practice Management and Group Practice and DSO Digest e-newsletters. He is also a contributing author for DentistryIQ and Perio-Implant Advisory. He lectures and writes about practice management and clinical dentistry. Additional content is available on his blog for dentists at thecuriousdentist.com. Dr. Salierno maintains a private general practice in Melville, New York. You may contact him by e-mail at [email protected].