Shelley DeGroff, can you tell us how you got started in PPO negotiation and analysis and what the climate is like today?
Absolutely. I began working as an office manager in dental practices over ten years ago. This hands-on experience from the back to the front end allowed me to see the challenges firsthand. Initially, navigating PPO solutions was relatively straightforward, but it has since evolved into a more complex and intricate process. The current climate, especially post-COVID, has introduced new variables and challenges for dental practices. Insurance companies have adopted new policies and strategies that often complicate negotiations. For instance, introducing the most favored nation clause has added a layer of complexity by allowing insurance companies to default to the lowest fee schedule they can attach to through shared agreements. This often catches practices off guard, as they may not realize that their negotiated fee schedules can be overridden by lower fees from other agreements they are unaware of. This underscores the necessity for expertise in dental PPO negotiation and a deep understanding of PPO insurance companies to ensure practices remain profitable. At PPO Advisors, we offer comprehensive PPO consulting to help practices navigate these complexities and optimize their PPO arrangements.
Main Takeaways
1. Has it become more difficult for practices to negotiate with insurance providers in recent years?
Yes, significantly. The landscape has changed dramatically over the past few years. Two major factors have contributed to this increased difficulty: the most favored nation clause and backdoor agreements. These clauses and agreements allow insurance companies to default to the lowest fee schedule available within their network, often unbeknownst to the dental practices. This means that practice may believe they have negotiated a favorable fee schedule, only to discover that payments are made based on a much lower fee schedule due to these hidden agreements. Practices need to be proactive in analyzing their contracts and understanding these clauses to avoid unexpected reductions in reimbursement rates. At PPO Advisors, we offer free evaluations to help practices understand their current situation. We analyze existing contracts, identify any backdoor agreements or clauses that could impact reimbursement, and provide strategic recommendations for improvement. This thorough analysis is crucial for practices to navigate the increasingly complex world of PPO negotiations effectively.
2. Shelley, do you help clients transition to a fee-for-service model?
Yes, we do. Every analysis includes a comprehensive review of the practice’s insurance network and the potential for transitioning to a fee-for-service model. Overly contracted practices often have too much overlap in their insurance networks, leading to inefficiencies and lower profitability. Identifying and eliminating less beneficial contracts, we help practices achieve a healthier mix of PPO and fee-for-service patients. This transition involves several steps, including educating the practice about the benefits and challenges of a fee-for-service model, renegotiating or terminating existing PPO contracts, and implementing strategies to attract and retain fee-for-service patients. We aim to create a sustainable and profitable business model for the practice. We also provide ongoing support and consulting to ensure a smooth and successful transition, helping practices adapt to changes in the dental insurance landscape and maintain financial stability.
3. What features make a practice a good candidate for this transition?
Several factors determine whether a practice qualifies for transitioning to a fee-for-service model. First, we evaluate the practice’s demographics, including the patient base and local competition. Practices in areas with a high concentration of PPO patients may find it challenging to transition entirely but can benefit from a mixed model. Second, we assess the practice’s current busyness and capacity for growth. Practices already busy and with a strong reputation for quality care are better positioned to attract fee-for-service patients. Third, we look at the practice’s financial health and readiness to invest in marketing and patient education. A well-executed transition plan includes marketing efforts to attract new patients and educate existing ones about the benefits of staying with the practice. Finally, we consider the practice’s long-term goals and readiness for change. Practices committed to reducing their dependence on insurance and willingness to invest in the necessary changes are more likely to succeed. We guide practices through this process, helping them set realistic goals and implement strategies for a successful transition.
4. Communication seems crucial in this process. How do you ensure that practices implement these changes effectively?
Effective communication is indeed crucial. It starts with ensuring that everyone in the practice, from the front office staff to the back office, understands the goals and benefits of the changes. This includes training sessions to explain the rationale behind the new strategies and how they will be implemented. We provide verbiage and scripts to help staff communicate these changes confidently and clearly to patients. Additionally, we work closely with the practice to develop a comprehensive communication plan that includes both internal and external messaging. This plan ensures that all staff members are on the same page and can address patient concerns effectively. Regular team meetings and updates are important to keep everyone informed and engaged. By fostering a culture of transparency and collaboration, we help practices navigate the transition smoothly and maintain high patient satisfaction.
5. Can you share some pitfalls and practices you might encounter during this transition?
One common pitfall is inadequate communication. If the staff is not well-informed or comfortable with the changes, it can lead to patient confusion and dissatisfaction. Proper training and clear communication strategies are crucial. Another pitfall is failing to review and update fee schedules and insurance contracts regularly. Practices that do not stay proactive in managing their PPO arrangements can find themselves locked into unfavorable terms. Additionally, some practices may underestimate the time and effort required to transition to a fee-for-service model. It involves strategic planning, patient education, and often a cultural shift within the practice. Practices must be prepared to invest the necessary resources to ensure a successful transition. We work closely with practices to avoid these pitfalls by providing comprehensive support and guidance. We aim to help practices achieve a smooth transition that enhances profitability and sustainability.