Keep Your Money

– How to Make PPOs Valuable to Your Practice

Thank you so much for joining us this evening. We’re excited to jump into this topic with PPO Advisors, and Shelley is here to dive into the insurance side. Shelley, can you start by introducing yourself and telling us about PPO Advisors?

Thank you, Janina. I’m Shelley DeGroff, the founder and CEO of PPO Advisors. We specialize in analyzing and negotiating PPO contracts for independent dental practices. I started in this industry over ten years ago, initially working in various roles within dental practices. My journey began with a degree in agriculture. Still, I found myself drawn to the dental field, from answering phones and managing practice management software to becoming an expanded function dental assistant and then an office manager. Through these roles, I developed a deep interest in insurance, which led me to establish PPO Advisors. Our goal is to help practices navigate the complexities of PPO solutions, ensuring they maximize their reimbursements and improve their profitability through strategic dental PPO negotiation and consulting.

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Main Takeaways

1. How have recent PPO negotiations and climate change, especially after COVID?

The landscape of PPO negotiations has become significantly more challenging over the past few years. Two major factors have contributed to this: the most favored nation clause and the increasing complexity of backdoor agreements. The most favored nation clause allows insurance companies to default to the lowest fee schedule available within their shared network agreements. A practice might believe they have negotiated favorable fees, only to find that payments are made based on much lower fee schedules due to these hidden agreements. Additionally, the insurance web has become intricate, making it difficult for practices to understand their contracts fully. At PPO Advisors, we offer comprehensive PPO consulting services to help practices navigate these complexities, analyze their current contracts, and identify opportunities for improvement. We aim to empower practices to optimize their PPO arrangements and enhance profitability.

2. Can you explain the importance of credentialing and the challenges associated with it?

Credentialing is critical to managing a dental practice, but it has become increasingly difficult and time-consuming. What used to take six to eight weeks to complete can now take 16 weeks or even longer. This delay can be particularly challenging when bringing on new associates or acquiring a practice. Proper credentialing involves understanding exactly what you are signing up for and how to be in-network with a particular insurance company. Credentialing correctly from the start leads to better negotiation potential in the future and ensures compliance with various regulations. We also educate practices about the risks of NPI fraud, which occurs when one provider’s NPI is used by another to be in-network for claims. This is a serious federal crime with severe penalties, and it is crucial to avoid such practices.

3. Many practices are considering going insurance-free. Is this a viable option, and what should they consider?

Going insurance-free can be a viable option for some practices, but it requires careful consideration and strategic planning. The decision to drop insurance plans should not be made hastily. Practices must analyze their demographics, patient base, and the competitive landscape. It is crucial to understand the percentage of patients with third-party payers and their spending patterns. For instance, while many patients value their dental insurance and prefer in-network providers, there is a growing trend of practices moving towards fee-for-service models due to the increasing challenges posed by insurance companies. At PPO Advisors, we help practices evaluate whether going insurance-free is right for them. This involves analyzing current PPO contracts, identifying which ones to keep or drop, and implementing a step-by-step transition plan. The goal is to ensure the practice remains financially stable while reducing its dependence on insurance reimbursements.

4. How do you help practices negotiate better PPO contracts and improve their profitability?

Negotiating PPO contracts effectively is essential for improving profitability. At PPO Advisors, we start by analyzing the practice’s current fee schedules and understanding the impact of each insurance company on the practice’s revenue. We identify opportunities to negotiate better rates by focusing on the top ten procedure codes that generate most of the practice’s production. Insurance companies often have a budget for each practice, and by redistributing this budget to increase fees for the most frequently used codes, we can significantly improve reimbursements. Additionally, we educate practices about the power of stacking contracts. This involves strategically opting in and out of certain agreements to ensure the highest fee schedule is utilized. For example, if a practice is directly contracted with Aetna but can achieve higher reimbursements through an umbrella company like Connection Dental, we guide them through the process of making this switch. By negotiating better fees and optimizing contract structures, we help practices achieve substantial increases in their revenue.

5. Can you explain how negotiating PPO contracts can impact a practice’s revenue?

Certainly, let’s consider a $2 million dental practice that is 50% fee-for-service and 50% PPO. Of the PPO revenue, half of the networks will negotiate rates, representing $500,000 of reimbursement revenue that can be improved. We typically achieve a 20% increase in these reimbursements through strategic PPO negotiations. This results in an additional $100,000 in annual revenue. Over ten years, this translates to a $1 million increase in PPO revenue. Additionally, updating the practice’s UCR (usual, customary, and reasonable) fee schedule can lead to further increases. For instance, by adjusting UCR fees to reflect market rates and ensuring they fall within the recommended percentiles for their demographic, practices can see a 5% increase in fee-for-service revenue. This combined approach of PPO negotiations and UCR adjustments can result in significant financial benefits, illustrating the importance of regularly reviewing and updating fee schedules.

6. How can practices ensure they are not over-contracted with PPOs, and what are the benefits of streamlining their contracts?

Many practices are over-contracted with multiple PPOs, leading to unnecessary complexity and lower reimbursements. Being over-contracted means a practice has multiple overlapping agreements with different insurance companies, often reducing efficiency and profitability. At PPO Advisors, we help practices analyze their current contracts to identify and eliminate unnecessary overlaps. By streamlining these contracts, practices can focus on the most beneficial agreements and reduce administrative burden. For example, if a practice is contracted with Aetna directly bthrough several shared agreements, we evaluate which arrangement offers the best reimbursement rates and simplifies network participation. This not only improves financial outcomes but also reduces the workload on the front office staff. Simplifying PPO contracts allows practices to focus on providing quality care without the added stress of managing multiple, often conflicting, insurance agreements.

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