Advanced Practice Management
7101 York Avenue South, Suite 300
Edina, Minnesota 55435-4407
We have the privilege to work with more area Dentists than all other Practice Management firms (local or national) combined. Thank you for your business and your referrals. It is an honor to be part of your practice.
We wish you a healthy and prosperous 2015!
Sincerely,
Your Friends at APM
We all know about D0150 Comprehensive Evaluation for New Patients. In certain instances, utilizing Code D0180 Comprehensive Periodontal Evaluation might be in your best interest.
This code came out initially for utilization by specialists. Both codes 0150 and 0180 are Comprehensive Oral Evaluations for new and established patients. The difference being 0180 is used exclusively for patients showing signs or symptoms of periodontal disease and with patients with risk factors, such as smoking or diabetes. D0180 requires complete periodontal charting, which includes, but is not necessarily limited to 6 points per tooth, probing, recording recession, furcations, bleeding points, mobility, attachment loss and a periodontal diagnosis. The 0150 may include a periodontal screening and list of any soft tissue anomalies but does not require any recording. That being said, many patients do meet this requirement both as new and/or re-establishing patients.
Most insurance carriers treat the 0180 similarly to the 0150 in that it counts towards one of the two exams that are typically paid per year, although some variations have been noted. Some carriers may reimburse D0180 every 12-24 months or every 3-5 years and some once in a lifetime. Some insurance carriers compensate at a higher rate for the D0180 vs. the 0150. So, this code can be helpful and is being used more and more by general practitioners.
We are happy to help. Call the team at Advanced Practice Management at (952) 921-3360.
Moving forward in 2015, it is best to simplify your fluoride codes. By now, most practices are using fluoride varnishes exclusively for both adults and children. That being the case, it may be beneficial for most offices to use code D1206 Topical Application of Fluoride Varnish as compared to D1208 Topical Application of Fluoride, which does not specify the type of fluoride formulation or technique used for application.
Code D1206 has also dropped restrictions for reporting related to patients with moderate to high caries risk making the code appropriate anytime you apply fluoride varnish. There may be other reasons to use Code 1206 exclusively. Reimbursement may be higher through many insurance plans and, in addition, some contracts may reimburse D1206 for individuals 18 yrs. and older if the patient is at high caries risk. “High Caries Risk” then should be put in the remarks section of the claim form.
If you have questions, call Matt Lahn at Advanced Practice Management. The number is (952) 921-3360. He would be happy to help!
You hear it from me every year because I see it work every year! Doctors with written practice goals, team participation in setting the goals and good management support do better every year. It’s almost spooky it works so well.
So, do yourself a favor. Sit down with the Goal Worksheet (see below) for 30 minutes to an hour. Be realistic and optimistic. Be true to what you really want. Maybe more money may not be as important to you as more time off or a happier, more harmonious workplace. Describe in writing your perfect practice!
How good can you stand it?!
Click on this link to download your goal setting worksheet:
YOUR 2015 GOALS
(Statistical Snapshot from APM’s Database):
Presumably, the bigger a practice’s Active Patient base is, the more referrals it will generate per year.
More people saying good stuff about you. Also, the bigger your practice is, the more new patients it needs to replenish itself. Through normal attrition, a practice with 2,000 patients will lose more per year than one with 1,000.
We measure a practice’s regeneration rate by dividing the total number of new patients per year by the active patient count.
For the average practice in our database, the regeneration ratio is about 11% per year. Strong patient flow growth is usually indicated by a ratio of 20% or more.
If your practice has a low regeneration rate, it’s very likely that your practice will shrink over time. Our analysis of the “average lifetime” of a patient in a practice is about 9 years, which, coincidentally or not, matches up pretty closely with the average replenishment rate.
Replenishment rates in our data base range from about 4% to over 30%. As with most statistics, we use them to just help frame an issue. When we are managing a practice, we are looking for the movement of the numbers—the statistical trends are more important than just the reading.
Want To Know Your Regeneration Rate? Your consultant can assist you in getting an updated Active Patient Count (2-year criteria), calculating your ratio and interpreting the results.
If you want to refine things further and you’ve been tracking new patient sources closely, you can look at your pure “referral ratio”, which would be a reading on the number of referrals you get per 100 active patients per year.
Speaking of Referrals: If you go with the general assumption that about 1 out of 10 patients refer you to another in a given year, then ask yourself, “What would happen with practice growth if I could just get 2 or 3 out of 10 patients to send another patient in per year?”
KDV* recently released their bi-annual overhead survey for general practitioners. It’s the best of its kind for our area and it’s quite useful in analyzing expenses and setting budgets. Their last overhead survey was done in 2012. Since then, dental office overhead has remained right around 65% of collections (in 2012, 64.7%). The typical GP practice in this survey of mature area offices collects about $69,000 per month and nets about $290,000 per year (before taxes). In the 2012 survey, the average monthly collections were $65,000 with a net of about $272,000.
Over 45% of dental office overhead is staff wages. Gross wages come to about 26.9% of collections, up slightly from the previous survey. Including benefits, staff costs are about 31%.
Since staff costs are your major controllable expense, it’s a very important area to focus on “Result Control” (not just “Cost Control”).
This is the time of year where many Doctors are looking at staff compensation. According to our recent survey, about 40% of Metro area practices and 56% of Outstate area practices have, or planned on, giving.
We recommend these three criteria:
*KDV is an area Accounting, Payroll and Wealth Management firm that works with over 100 area dentists (www.KDV.com)
Lab costs have decreased from 7.1% to 6.6 % of collections. This is most likely due to more offices with CAD/CAM technology (CEREC/E4D). At the same time, “Professional Supplies” are up slightly from 7.2% to 7.5%.
Professional banking and other fees are up from 2.2% to 2.4%. More patients using credit cards means more bank charges (more about that in another issue). Professional fees, including consulting and accounting, should be under 2-½%.
A quick pitch here: our fees typically come to less than 1% of our clients’ gross production and rarely over 2%. We feel that with a little help from your friends (us!) you get way more than that in return through leveraging your and your staff’s time and talents with good business practices.
Surprisingly, the advertising percentage has not really increased. It’s around 1.7% of collections. Given the typical practice writes off well over 10% of its production due to PPO discounts, I would think that more Doctors would be spending more money on advertising to enable them to cut back a bit on PPO participation and the serious discounts and expense incurred. So, for example, if you’re collecting less than 80% of your production (and I can’t believe I am saying this—there used to be a time when no one collected less than 80%!), you probably are participating in more PPO’s than you need to. Ironically, the Doctors in the best position to peel off PPO participation are the ones that are temperamentally less inclined to do so. There are few decisions in your practice that have more potential risks and rewards than those to do with PPO participation, so please make use of our expertise in this area. We have made or saved many Doctors many $1,000’s.
Incentives and Budgets: About 33% of practices have a staff bonus/incentive plan. On a scale of 1-10, the Doctors with these plans rated them at “7”. I’ve seen incentive plans work miracles. I’ve seen them fall flat or eventually fizzle out.
Good incentive plans have to be tied in with a good business plan. The staff has to know how they can win and what each individual has to do to contribute to the practice’s growth. Just setting a production or collection target with no concrete ways to get there is a sure way to frustrate the team.
Mathematically, all the incentives we recommend are in light of the above overhead statistics so that the more incentive you’re paying, the better your ratios are getting. Everybody wins.
If you’d like our assistance in setting up an incentive program, let us know. If you already have an incentive program, please check with us at least once a year so that we can make any necessary adjustments. All incentive programs need to be tuned at least annually.
Some highlights from our recent Fee/Wage/Technology and Insurance Participation Surveys:
PPO/Insurance Participation: PPO participation and write offs continue to dig in. Participation with Delta Premier (87%) and Delta PPO (30%) remains about the same as last year. 7% of Doctors reported they had dropped participation in a PPO in the last 12 months and 4% plan on dropping a PPO in the coming months. However, 12% have joined a PPO network in the last 12 months.
Again, if you’re considering joining or dropping a PPO, please check with us first.
In descending order, Dentists’ top issues are:
Metro Area fees were up 2.4%. Outstate Area fees were up 3.2%. Wages were up about 1.8%.
We have detailed Overhead, Technology, Wage, Fee and Benefit Surveys on our website. Plus, numerous Bulletins, articles and interviews that address a wide range of subjects.
We are your source for reliable, practical information. In a world full of big insurance companies, corporate dentistry and governmental complications, we are the pros that are on your side. That is, the Doctors who are and want to continue to practice independently, deliver top-notch service to patients, take good care of their staff and earn a good living doing good!
Photo Credit: Dollar Photo Club
Image Source: Search Engine Land
This year has been has seen a lot of change in local search and that has kept dental offices on their toes trying to keep up with the developments. Now there is another development that you should be aware of, as well. Now, Mozilla’s Firefox has changed it’s default search engine from Google to Yahoo!
According to an article on Search Engine Land, the number of searches on the Firefox that used Yahoo for the search engine has since grown from 9.6 percent to 29.4 percent.
That is still to be determined. As clients of APM, we will keep you in the loop. In the meantime, make sure your Yahoo local business listing is claimed and up-to-date (in addition to your other basic listings on Google, Facebook, Yelp, HealthGrades, etc.). If you have any questions, feel free to contact Kelly Larson at kelly@advancedpracticemanagment.com or by phone at (952) 920-3360.
Click to see CareCredit’s new look
Thanks to Emmott On Technology for making us aware that CareCredit has a new look and a new name for their parent company.
If your dental office uses Care Credit for financing, make sure your links and materials are up to date.
Any questions, let us know!
Most doctors believe that when an insurance company provides them with a managed care (PPO) fee schedule, there’s no negotiating. That’s not the case, says practice management consultant Bill Rossi*, based in Minnesota, a managed care stronghold. While insurance companies undoubtedly hold the upper hand, negotiations are not only possible, but when successful, can lead to thousands of dollars in increased profits!
Rossi provides several reasons that insurance companies will negotiate. First, they want to keep patients where patients are happy. Also, they need to maintain the provider network to keep their employer-customers happy, and paying their premiums. Furthermore, many insurance companies reward their network managers for maintaining or building their network of participating doctors, and penalize them for related losses.
That being said, market conditions often dictate if, and how much, insurance companies are willing to bend, says Rossi. If managed care penetration in the area is relatively weak, insurance companies are more likely to negotiate because they need your practice to build their network. Furthermore, the fewer doctors that are a heady in the network, the more bargaining power you have. Also, the more patients you have in a given plan, the more negotiating power you wield since the loss of your practice would blow a bigger hole in their provider network.
The few doctors who do negotiate are often unnsuccessful because of their lack of preparation, knowledge, and skill, says Rossi. Too often, doctors negotiate fee increases on a handful of procedures, only to later determine that those were low-volume procedures that will only minimally increase practice profits. While they’ve won the battle, they’ve lost the war!
Doctors need to understand that insurance companies are not bound by antitrust rules and so they share the actual fees charged by you and all your competitors with each other. As a result, they have complete knowledge of the practice fee landscape, while doctors don’t. Furthermore, they often pay two doctors in the same town, doing the exact same procedure, different fees (varying as much as 40%). Often when insurance companies are seeking to expand their network, they offer a fee schedule that is well below what they may be paying other doctors already in their network, to see if the new doctor will “bite.”
In order to negotiate successfully, doctors should prepare well and pick their battles intelligently, says Rossi. He recommends establishing a fee grid detailing the fee reimbursements provided by each PPO plan for the top 20 procedures (by dollar volume) performed by the practice. Furthermore, doctors should also compute the discount off the practice’s full fee for each of these procedures. Once completed, the doctor should look for mistakes and inconsistencies between the plans, and use this information in the negotiating process.
Armed with this information, doctors are now ready to play “PPO poker,” says Rossi. He recommends calling the PPO network manager and negotiating directly. Avoid being confrontational or combative in the fee negotiation process, but rather try to be civil and informative instead.
If the fee the doctor is receiving is 40% of UCR from one PPO, but 65% of UCR for the same procedure from another plan, ask the underpaying plan if it is paying another doctor more for the same procedure. If so, tell them that they shouldn’t discriminate and should pay each doctor the same fee for the same procedure. Also, ask them if they would be willing to match the higher fee paid by the competing plan to keep you in the network.
It’s important for doctors to threaten to leave the network if reasonable fee requests are not met. Otherwise, the plan has no reason to negotiate with the doctor and will refuse to budge. While Rossi concedes that fee negotiations are successful less than half the time, when they are he has been able to increase reimbursements by up to 30% for some clients.
Also, look for added profit dollars from plan “glitches.” In some cases, Rossi has seen some procedure codes discounted more heavily than others due to insurance company errors. In other cases, the insurance company is simply not paying the correct (higher) fee that they agreed to pay under the contract. Rossi has also found errors when the insurance companies reset fees based upon an old, outdated fee schedule, resulting in the doctor’s reimbursements going down, rather than up, as agreed.
If your practice is already at full capacity, dropping a PPO plan is relatively easy and certainly cost-effective. If not at full capacity, doctors need advance preparation and a concrete plan of attack. Without one, Rossi says you can do serious damage to your practice!
First, doctors need to determine how much of their production and fee adjustments (write-offs) come from each plan and determine the related write-off percentage. Doctors also need to investigate and compare the in-network fees versus the out-of-network fees available if plan participation is dropped.
With all other factors being equal, Rossi recommends “peeling off’ the smallest PPO plan first, since it will be easiest to replace the lost volume. Before dropping a PPO plan, however, doctors need a three-step plan of attack. First, they need to develop strategies to minimize loss of patients from dropping the plan. Next, they need strategies to slow down that patient loss. Finally, they need to develop strategies to counteract, or offset, the loss of patients.
Doctors’ biggest fear in playing PPO poker is the effect that patient loss can have on their practice, says Rossi. While doctors will certainly lose patients when they drop a plan, the loss is usually not nearly as severe as feared. Many patients are loyal, and will stay with the practice if the situation is handled correctly, says Rossi. And doctors should be emboldened to act with the knowledge that if they leave the network, they can very likely come back, making this a very low risk decision.
Proper communication about the change in plan participation is critical. In most cases, doctors are best served by NOT sending letters to patients announcing that they are leaving the network. Rossi says that such letters often sound self-serving, and can confuse and irritate patients. Rather, he recommends developing the message (or script) and delivering it “face-to-face” to the patient while they are in the office. Over time, the doctor can refine the message based on patient responses to help minimize attrition. This approach also slows down the patient loss, providing more time for the doctor to implement marketing efforts to rebuild practice volume.
Rossi has had great success in negotiating increased fees from managed care plans when the conditions are right. Furthermore, he has performed many managed care “exorcisms” through dropping plan participation and converting practices from PPOs. He says these strategies can add more bottom line profits for mature practices than virtually any other.
In one recent situation, Rossi assisted a practice producing close to $70,000 a month, but who was so heavily involved in managed care participation that it was collecting only 63% of production. He performed exorcisms on several PPO plans and implemented new marketing strategies to boost new patient flow. While the level of practice production remained stable, the collection rate increased to 82%, up 19 percentage points. Thus, the doctor was able to increase collections and related profit also need to investigate and compare the in network fees by over $150,000 annually – not by working harder, by working smarter! That experience makes playing PPO poker not only fun, but also extremely rewarding!
If you have questions about whether your dental practice would benefit from going out of network with insurance, call Bill at (952) 921-3360 for a complimentary 20-minute consultation.
Dr. Bruce Christopher
On Friday, September 25, we celebrated our first APM Client Appreciation Event. We were thrilled by the response and even had to switch venues to accommodate a larger crowd for our dental teams. As dental practice management consultants, when we meet with our dental teams we are continually challenging them in new ways to grow both personally and as teams, so this day was intentionally a day to just celebrate them and for us to say “Thank You” for the opportunity to join them on their journeys.
We began the morning with a delicious breakfast playing a round of “What Did You Say When?” and then enjoyed an entertaining presentation by renowned speaker and entertainer, Bruce Christopher.
During the morning, each practice also had the opportunity to have their team photo taken by our friend, photographer John Magnoski. John will be sending an email to each office with their photo by Monday, October 6th. We will also have a link from this blog page, so stay posted.
We have a number of “thank yous” we’d like to share for helping to make this day such a great success: