Toward the end of 2016 Delta of Massachusetts announced that there was going to be a new, for profit Delta. The new Delta will basically offer the Delta PPO schedule only. The better paying (although still discounted) Delta Premier will fade away.
Doctors are told that if they don’t opt-in they will be out of the Delta networks and as the plans turn over, the checks will go to the patients.
For the typical Delta Premier Provider Dentist in Massachusetts this means that Delta write-offs will nearly double. I talked to doctors who will see their write-offs from Delta go from $250,000 per year to nearly half a million. Ouch! Apparently the new “For Profit” Delta will make its profits from squeezing dentists. That is why probably that at the Yankee Meeting, Delta actually had an armed guard at their booth. True!
As you probably know I have written and spoken a lot regarding PPOs. (FYI Dentaltown just released my “PPO Plays” CE: http://www.dentaltown.com/onlinece/category/2/practice-management. I also recently did a podcast with Ben Tuinei at http://advancedpracticemanagement.com/guest-audioseries/.) We are increasingly fielding calls about PPO concerns from dentists all over the country. Minnesota was one of the first to feel the sting of PPO write-offs, audits, etc. Insurance companies basically are creating a race to the bottom with their fees.
Now there are about a half dozen states that no longer offer Delta Premier. For example, if you buy a practice in California it will be considered a new “entity.” Even if you were/are a Premier dentist the practice has to now be on the PPO fee schedule. This affects practice values dramatically since the buyer will not have the same profit profile as the seller.
So the big question on everyone’s mind is . . . Will Delta PPO be the only Delta in the future?
One comfort, of sorts, is that apparently Delta is losing market share. Other insurance companies are taking a bigger cut of the market, so that is why Delta is putting pressure on their provider network. It would be good to see Delta’s “monopoly” diluted.
For many U.S. dentists, Delta is not as big a deal as it is in the Minneapolis/St. Paul area. Delta might be 20- 40% of the national market instead of 60-80%.
What Can You Do About This?
Smart management always puts the time and money where it can get the biggest return. We can do nothing about controlling the insurance market, but we will do all the things we can to make your practice strong so there is less compulsion to sign up for PPOs. Delta is not the only one nicking your bottom line.
As I said in an earlier Bulletin, it’s a matter of the right balance. Most practices will participate in some PPOs, but in my opinion very few practices should participate in all of them! Our research shows that at a certain point, additional PPOs just mean additional discounts, not additional new patient flow.
You have more power than you think. We’ve helped many dental practices successfully balance their PPO participation. If you are writing off over 25% of your production you are working the first 3 months of each year for free! It probably doesn’t have to be that way. Learn more! Contact Bill Rossi at 952- 921-3360 or bill@advancedpracticemanagement.com.