Do you pull your hair out when looking over insurance reimbursement rates compared to the office fee schedule? Why don’t PPO providers negotiate their fees, and how frustrating are they to deal with? In my experience, it’s frustrating to put in the checks from the explanation of benefits, just to have my stomach sink at all I have to write off. Being able to close that gap of write-off to your real fees is half the battle. We all have to stay in the game of dentistry by accepting one, or in most cases, all of the PPO insurance providers.
There’s a rumor of another economic downturn for dentists. It’s true some PPO providers do not negotiate fees. However, it’s worth it to ask what PPO companies do negotiate fees. Dentists are coming out of school $500,000 in debt just from student loans. The irony is they come out with debt, yet were not taught how to run a business. Hiring and training staff to run a business is very expensive. Dentists are forced to be part of a partnership, pursue corporate dentistry, or become an associate in an existing practice.
Just like medical doctors that used to make house calls, the days of dentists becoming sole proprietors are becoming fewer. Just like medical doctors, dentists often have to work for big hospitals or go into a group practice. Dentists need to have the newest technology to stay competitive, and new technology is costly. Dentists have great financial burdens to overcome to start a business. As a result, there will be fewer standalone dental offices in the future. Group practices will flourish. General dentists who want to keep their doors open may have to entertain the idea of adding a specialty to share the practice.
We have to develop the mindset that it doesn’t hurt to ask. Even if they proclaim to be non-negotiable, in my experience insurance companies need dental offices as much as we need them. Many insurance companies have not recovered from the drop in patients carrying dental insurance during the recession. Many employers dropped the benefit of dental insurance for their employees. When it comes to negotiating fees, dentists have more leverage than they realize. If sole proprietor dentists can negotiate fees, imagine the power a group practice can have to negotiate fees.
There’s no need to pay expensive costs to outsource the fee negotiations for your practice. Does your practice have a practice administrator? If not, then I advise you invest in one. It is actually quite easy to do, it just takes time and patience.Click here to see a copy of a letter that I send out to dental insurance companies every two to three years. First, read over your contracts. There is a portion telling you when and how to ask for a fee increase. Second, send the letter out in the last quarter of the year and give the company a deadline to respond. The practice relations department is the best resource to send these requests. Third, give them all the information by attaching a copy of your office fee schedule. We all know there is a huge disconnect regarding reimbursement rates.
Success happens when you ask. Principle, Guardian, Humana, and Cigna – just to name a few insurance companies – were open to negotiating by increasing the reimbursement by $3 to $5. This may seem like a small victory, but pennies make dollars. Those small victories can be huge gains.
When your front office members learn these skills, they will be valuable assets to your practice.
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