Dental Insurance Education
Network participation is a term used by insurance carriers and insurance networks to describe a doctor’s status with their insurance plan or network. There are 2 forms of participation status a doctor can have with an insurance carrier:
1) In-Network: This means the doctor signed a contract and submitted a credentialing packet seeking to become in-network with a particular dental plan and that the insurance entity verified the credentials of the dentist and accepted the dentist as a qualified “Preferred Provider.” PPO stands for Preferred Provider Organization and PPO Insurance Plans will do whatever they can to drive the members of their network to In-Network providers only. Some insurance companies do not provide out-of-network benefits for their policy holders to ensure that they stay with in-network dentists. When a dentist becomes a Preferred Provider for a PPO insurance plan the dentist is required to provide a discount to patients from that network by accepting the PPO fee schedule. The fee schedule will dictate the highest reimbursable amounts an in-network provider can receive payments on from the combination of insurance and patient payments. The dentist agrees that anything above the fee schedule will be a write-off.
In-Network Provider and Preferred Provider mean the same thing.
2) Out-of-Network: This means the doctor has not contracted with an insurance plan and is not listed in the Preferred Provider Directory for that particular insurance entity. Being out-of-network doesn’t bind the dentist to a contract or a fee schedule when seeing their patients. Patients will have higher out of pocket expenses when seeing doctors out of their PPO network. Statistically, patients are less likely to see an out-of-network doctor if there is another doctor nearby that is in-network. The major challenge dentists face in this economy, is being able to build a dynamic patient base that has the proper mix of in-network and out-of-network patients to keep the practice profitable and growing. Some dentist thrive being out-of-network, others find it challenging. What is the first priority for most patients when considering a doctor? The majority of patients answer that question thinking first about cost, and second about quality of care. This is a reality most practices deal with.
Adding Insurance Plans – Deciding Your Network Involvement
There are a couple of reasons to add insurance participation to your practice: the first is to build the practice by driving new patient flow through the door. The second is to build the value of the practice for prospective buyers who may be interested in a patient base that is not tied to a personality. Not all insurance plans will drive new patients into the practice. Some insurance plans will cost you money by placing you under contract with a fee schedule poorly constructed for your practice (meaning the insurance carrier is asking you to write-off 40-80% of your full fees). You must be wise when determining which plans with which to contract (or credential). If you choose the wrong plans, those plans may bring patients through the door, but you could be losing money each time one sits in your chair. Choosing the right plans is something we can help you with. Your “Out-of-Network” status could be sending valuable patients to a neighboring dentist, even though they would have come to you had you been in-network.
Here are a few situations which warrant choosing In-Network involvement:
- A new practice seeking to become established in the community
- A new owner taking over a practice
- A practice that is needing to fill chair time
- A dentist who is considering selling his practice (adding insurance plans may add practice value)
A practice getting 10 calls a month from patients from an insurance plan and the potential patients are refusing to see you because you are out-of-network
Let’s touch on that last situation. In January 2012, we worked with a dental practice that was losing 30 patients a month because of their out-of-network status. This office was only contracted with 3 insurance plans and felt that it was not necessary to “play the insurance game” and so remained out-of-network with all other insurance plans. We talked to the office manager and discovered that they had been turning away about 30 patients a month for the last 18 months.
Dropping Insurance Plans
The decision to go out-of-network is a big business decision. There are only two reasons to drop an insurance plan. (These reasons are based upon current market trends and patient activity)
2) Unsustainable fees. There are only a handful of dental plans that cause dentists to lose money when treating patients and most of those plans are either HMO or discount plans. Before making a firm decision to drop an insurance plan it is always best to conduct a fee impact analysis, or revenue analysis to see if you could survive without the revenue from an insurance plan you are looking to drop.
Here’s a real example of a practice that recently decided to drop a popular insurance plan in his area:
Their reasons to drop a plan: Insurance fees were too low. The doctor and office manager felt that this insurance plan was bringing too many patients without enough financial benefits.
Facts about the insurance plan:
386 active patients in 2011
$297,885 total revenue in 2011
Results after dropping the plan:
By April 2012 nearly 75% of their active patients scheduled regular hygiene appointments with another dental practice. This office proceeded with terminating their insurance contract which resulted in them (the practice) losing 75% of patients who were on this particular insurance plan. The doctor fired the consulting firm who had advised him and hired us to re-contract him with this PPO plan in order to stop the bleeding.
Even if you think an insurance fee schedule is unsustainable, find out all the facts about what that insurance plan is doing for your office, financially, before you drop that plan. Depending on where you are in your career, dropping a few plans may or may not help. But if you are looking to grow your practice, we suggest taking a long and hard look before making decisions concerning dropping insurance plans. If you need to talk to an expert about this issue feel free to call us to obtain a thorough analysis of your insurance participation.
Insurance Credentialing and Contracting 101
Dental Insurance Credentialing is tedious and time consuming. If you are purchasing a practice it is highly recommended that you begin the credentialing process as soon as you can in order to maximize your new patient opportunities. When you complete the insurance credentialing process, insurance carriers will promote your practice to their insured (patients) for free.
How Long is the Insurance Credentialing Process and what’s Involved?
Every insurance company credentials at their own pace, but the process could take up to 4-6 months from when you begin the application process. When you send in an application, be sure to check how long the process takes for that particular insurance network. You will want to give patients the right expectations during the treatment planning process. In today’s economy, most patients are likely to not schedule treatment with you until you become an in-network provider, and if you make a mistake by misrepresenting your Network Participation Status, you could upset a patient and lose them to a nearby competitor.
Throughout the entire credentialing process always verify your Network Participation Status with an insurance carrier prior to telling a patient that you are In-Network. Welcome packets from insurance carriers are usually sent in the mail; so check for those letters and update your “List of Accepted Insurance Plans” once those letters are received. It is always important to verify you are a preferred provider for the new insurance plans your patients are presenting.
As a participating provider, it can be helpful when you verify benefits to also verify the fee schedule the patient is under. It is a good practice to check and be sure that the insurance company has your service set up correctly for this patient. It also gives you a chance to confirm which company or network is actually carrying this patient’s insurance.
Whenever you submit paperwork to a network or an insurance company, check the paperwork thoroughly before you send it to be sure you have:
- Verified that you have all the paperwork you need to accomplish the task at hand and that the paper work you have is up-to-date.
- The right paper work for what you want to do. Too many times the wrong paperwork is sent and it delays the process.
- Be sure you are sending the correct company’s paperwork to the company that you are contracting with. It is easy to send the application to the wrong company or address with all the various insurance options. This simply slows the application process down.
- Be sure that you have the correct information on all your paperwork before you send it for submission. It can cost weeks or months because the wrong information was sent, or the form was sent back with blanks and missing pertinent information.
- Be sure to have each signature space signed and dated. You should always double check that this has been done before faxing or sending your paperwork.
- Always make and file a copy of all materials sent to an insurance company or network, you never know when you might need it again. It is not uncommon to have paperwork lost.
- Whenever you submit paperwork, ask for a confirmation by either email or phone call in order to confirm that it has been submitted for processing.
- Never assume that anything is complete until you have documentation in hand that it is. Even then, keep all your documentation filed so that you can easily access it, you never know when you may need to prove something that you thought had been done.
We can help negotiate or renegotiate your dental insurance fees, contracts, and rates. Trust us to assist you in finding the best PPO plans for your office along with the appropriate PPO fee schedules.