How to Safely and Strategically Drop PPOs

How to Safely and Strategically Drop PPOs

First, make a simple spreadsheet with the fees for your most common 15-20 procedures. In parallel columns list the fee allowances of your most active PPOs. At the same time, get an idea of how many patients, or what percentage of your practice, are in the various PPO plans.

Most doctors have spent years signing up for PPOs. Now it is time to learn how to “un-sign” up! Pick a smaller PPO as a “warm up.” If a PPO represents less than 15% of your practice, your write offs are over 40% of your standard fees, and there are decent out-of-network benefits, then that one is a prime candidate. (Many doctors across the country recently received a letter from Cigna stating that it will be reducing its reimbursements. If this applies to you, then you may want to put Cigna first in the firing order.)

Ask the insurance company what the notification period is. Send them a notice by certified mail (sometimes they get “lost”) and ask for written confirmation of the transition and date. If the insurance company tells you that you must notify your patients of the transition, that means its likely they are not going to be sending letters. That is usually the case. This is good, because then you can call or talk to patients face to face about the transition. Here is language that can form the basis of these conversations:

“Mrs. Smith, since your last visit we’ve changed your network affiliation. We are now independent providers with XYZ-PPO. We’ve checked on your benefits. The good thing with XXX-PPO is that for most of our patients, the benefits are fairly standard. They will cover all or most of the preventative care. We will do our best to estimate your costs on a case-by-case basis…”

If your staff is well trained and believe in what you are doing, most patients will be fine. Patients like their dentists for more than their in-network status. Ironically, if you get so busy and overloaded trying to outrun the PPO discounts, you can create an atmosphere where patients can only like you because of your in-network status! So, if you are an independent practice that has good relationships with patients, you can do this.

If the insurance company sends letters, then you can do a counter-campaign with letters of your own and follow-up calls. This is in addition to one-on-one personal conversations with patients at their recall appointments prior to the PPO drop. We do not recommend getting into letter wars with insurance companies if they can be avoided. If the PPO is not sending letters, you shouldn’t either. It is best to speak with patients face to face. After your staff has had a dozen or so conversations and they see that patients are still happy in the office regardless of their insurance coverage, they will gain confidence and get better at handling them.

To quantify the impact of dropping a PPO, consider a hypothetical example of a practice that is (1) producing $100,000 per month, (2) where 10% of the production is for patients in network with XYZ-PPO; (3) that XYZ-PPO discounts fees by 40%; and (4) where monthly collections are therefore $96,000. With a successful transition, even allowing for 20% patient attrition, the practice will collect $8,000 per month on the now out-of-network XYZ patients (versus $6,000), a gain of $2,000. This goes straight to the bottom line, each month, for this year and for years to come. There is no extra work and no additional overhead. Then go on to the next PPO. . .