Seriously, dental insurance companies?!
That statement probably resonates with you now more than ever – I can’t tell you how many times in the past year I’ve said that out loud trying really hard not to use profanity in front of my toddler. Lately, the insurance companies with whom we’ve long been in-network are throwing us curveballs. They’re sending us letters notifying us that we’ll be paying them more and making less.
Meanwhile, labor and supply costs are up, and we’ve got more patients flooding in than you can remember in recent years. Talk about a perfect storm of frustrations! So, real talk: why are insurance reimbursement rates changing all of a sudden? What should we do about it?
I’ve done a bunch of research with my colleagues at DentalHQ, and we’ve come up with some good points.
The Insurance Provider Perspective
If like me, you’ve received one of the aforementioned not-so-welcome letters, you probably wondered why on earth an insurance company would feel the need to do that now. Likely, it has to do with a tactic they’ve begun using more and more: network leasing. According to an article by Nicholas Partridge, president of Five Lakes Dental Practice Solutions, “11 of the top 15 dental networks now have 4 or more network leasing partners.”
Network leasing refers to the practice of two or more insurance companies partnering up. Let’s say one insurance company with whom you are in-network joins forces with another. You’ll now be in-network with both. This expands the size of their network as a provider, which means that more providers like yourself will be in the pocket of that original network and the one that joined on. And what does that mean?
Well, inflation! With more providers than ever before in their network, insurance companies don’t feel the pressure to raise their reimbursement rates.
Yep, it isn’t great news.
How This Impacts Us
While it depends on which insurance company (or companies) we’re in-network with and can also be influenced by other factors like location, practice size, etc., the general result is that reimbursement rates are dropping. Many of my colleagues are being notified that their fee schedules are about to be dropped by as much as 20%. That adds up to a lot of lost revenue. Combine that with the fact that we’re going through a hygienist shortage (a topic for another time), costs are up because COVID has both created a greater need for sanitation and PPE and resulted in supply chain problems, and patients are still getting back on schedule after being unable to attend appointments during quarantine—life inside our practices has been stressful and chaotic and expensive. The last thing we needed was for an insurance company we work with to say “Hi there, we’re going to demand more of your money, FYI.”
So, what do we do? How do we manage this unprecedented moment in a way that will keep your practice profitable and good for patients?
What We Can Do
There are essentially two options for dentists who find ourselves in this frustrating predicament: negotiate our fees or go out of network. Despite how in control the insurance companies seem, you have a right to negotiate your fee schedules. Based on the fees you’re charging patients, the competition in the area, and other factors, you can create leverage that will help you successfully negotiate. We’ll discuss that in the near future. On the other hand, maybe you’ve tried negotiating your fees, or maybe you’ve decided you are just done with dealing with insurance companies. If that sounds like you, going out of network might be the right move for your practice. My coding wizards at DentalHQ created an Out Of Network Calculator that can help you figure out how many patients you need to keep if you drop a certain PPO. It’s way fewer than you think!
We’ve also compiled a Guide on how to go out of network successfully, with tips on everything from retaining patients to implementing membership plan programs that will boost your revenue to compensate for any lost ones. You can download that on the same page, below the calculator. This is a challenging time for dentistry, and whether you’re choosing to negotiate fees, drop PPOs, do both, or do nothing, we’re all on this journey together. I’m not saying I have all the answers, but I know that if we stick together and share our successes and failures, I know we’ll come through stronger.
A native North Carolinian, DR. BRETT WELLS bleeds the teal and black of his hometown Carolina Panthers. He’s a consummate entrepreneur, building not only a successful group dental practice but also concepting and starting DentalHQ, the better dental membership plan platform. Despite his success, Brett holds true to his belief that intelligent alien life is “out there.” Out there, indeed.