With inflation going through the roof, employee salaries soaring and other expenses rising fast, dental practices everywhere are feeling the profitability pinch. While raising fees is the most obvious solution (if you haven’t, now is the time) to offset the higher costs, there is another card that dentists can play to help mitigate the effects of inflation, and it pays off more than some might think: renegotiating PPO fees with insurance providers.
PPO fee negotiations are not a new tactic, but it’s one that many dentists either aren’t aware of or are too wary of the time, effort and frustration involved to try.
“Yes, you can and absolutely should renegotiate PPO insurance fees,” says Ben Tuinei, Managing Partner and President of dental insurance reimbursement specialists Veritas Dental Resources. “It’s not a quick and easy process, but it can pay off big time, especially in an inflationary period like the one we’re in now.”
The Case for Renegotiating Fees
According to Ben, the average dental practice forgives about 40-45% of production due to low PPO insurance reimbursement fees. However, practices that negotiate often see an increase of about 7% on the low end, with some reaching as high as 30%.
“As inflation pushes past 8% or higher in some parts of the country, renegotiating PPO fees is important for practices to sustain their business,” says Ben. “The mission among dentists right now is they don’t want to water down their services by relinquishing the labs or cutting staffing to retain profitability, and ultimately getting more from their insurance providers is a way to avoid that.”
Meanwhile, PPO fees continue to defy logic as insurance companies trend their fees lower, making the situation all the more challenging for dentists.
“PPO fees are actually trending down if you can believe that,” says Ben. “Negotiating fees creates a third-party payor strategy that allows dentists to protect the financial component—so practices can keep the integrity and quality of dentistry.”
While more and more practices are starting to make PPO fee negotiations a priority, the industry as a whole is still slow to adopt it as a common practice.
“There are about 170,000 dentists in the U.S., but only about 10% fight back,” says Ben. “Insurance companies will take that all day long.”
So why are practices hesitant to renegotiate fees? Ben says the problem many practice owners face is simple. They don’t know where or how to start.
Two Ways to Navigate the Negotiation Process
You can do it yourself.
Practice owners can task themselves or a trusted office staff member to take on the insurance companies. Full transparency, this isn’t a quick or easy task, but setting time aside and committing the hours needed to educate themselves on the process and then take action needed to negotiate with insurance providers is possible.
Prepare yourself with the information you will need when proposing fee increases with your providers. Know which procedure codes generate the highest total revenue for your practice, including frequency, current discounted fee and the extent of these procedure codes’ contribution to your overall practice revenue. Also come with your desired fee for each procedure code and the date when your fees were last revisited.
“Insurance companies design their processes to confuse both the practice and the patient,” says Ben. “It’s in their best interest to make the process difficult because the less they pay to dentists, the better they look to Wall Street.”
Basically, it’s a war of attrition, and Ben says this is usually the part of the process where individuals give up or settle for a percentage or two increase. If you spend hours of your time on this and get a 4% increase, it’s likely the insurance company is still walking away a winner because it very easily could’ve and should’ve been 7%, 10% or even more.
“Practices feel like they are playing hardball, but the truth is, the game was never fair to begin with,” says Ben. “Be patient and don’t give up. Don’t accept the first offer every time.”
Hire a specialist.
The second way to negotiate insurance rates is to hire a company that specializes in dealing with PPO insurance. These companies know the insurance game, the tactics and how to navigate them in the most efficient way possible.
“Using a specialist to handle your PPO negotiations is not unlike hiring an attorney,” says Ben. “You could represent yourself and possibly get a settlement, but with an attorney, you could get 10 times that amount—without the massive time investment.”
Another way a fee negotiation expert could help is to get a point of reference for how your fee schedule compares to similar practices in your area.
“Practices who go at it alone, usually have a blind spot when it comes to knowing how they compare to peer practices,” says Ben. “It’s our job to know that a similar practice in your area is getting $1,100 per crown when yours is only getting $1,000.”
Full-service negotiation specialists like Veritas can also help practices’ structure PPO contracts not only to make sure they are getting paid the highest rates but also to navigate them through the delicate process of eliminating unnecessary participation with plans that will not help them grow.
Finally, and possibly the most important in these uncertain times is that going with a PPO negotiation specialist can lift the burden off the shoulders of the entire practice.
“I’ve had clients tell me how relieved they are to have the day-to-day stress of the entire process off their radar,” says Ben. “We try to take as much of the worry off their plate, so in the end, they can keep their profitability, keep their staff, and keep doing what they do best for their patients.”
To get more information on the complexities of PPO negotiations and the fees involved with bringing in a specialist, Ben and his Veritas team offer a complimentary PPO Negotiating and PPO Optimization Analysis.