For over 30 years, I’ve surveyed Upper Midwest dentists on the issues most important to them. Attracting patients, finding, training, and paying staff are always mentioned. However, the top issue for the last years, has been “PPOs & Insurance Write Offs.”

I also asked how many dentists in the past year have joined a PPO. Last year, about 9% had joined A PPO and 13% said they left one in the previous year. That’s the first time ever that there have been more Doctors saying they left a PPO than joined. Still, when I see collection percentages as low as 80%, 75%, even 55%, I am amazed that there aren’t more Doctors cutting back on PPO participation.

I’ve written over a dozen articles to help Dentists with this issue. Of course, the reason that more dentists don’t drop more PPOs, is fear of losing patients. It’s not just having lower numbers – there are patients that you know and like in any PPO and you hate the idea of losing them. They are more than a number to you.

In 20 years of helping dentist with these transitions, I say confidently that you have more power than you think. Most patients do like you for more than your “network status.” You do not have to keep riding your fee schedule down and down. You do not have to accept fees that were from 10 years ago (or even the turn of the century!). You do not have to have a situation where some patients pay full fee in your practice (patients without insurance) while others get a 50% discount. Where is the justice in that? So, if maybe, just maybe you are now seriously considering acting on this challenge – which is probably the greatest sap to your profitability and independence – this article will be a guide to help in that decision.

What are PPOs Costing YOU?

• Do you actually know how much you are writing off? With which PPOs?

• Are you writing off more than 20% of your production? More than 30%? Even more?

• Do you know for sure which PPOs you are in? Lots of times, doctors with Delta PPO don’t know they are on the PPO instead of regular Delta (Delta Premier). Networks like Dentemax, Connection, DHA, etc. can be terrifically confusing. You can have some patients in network with MetLife, some out of network. If you don’t really know what networks you are in, find out.

• Do a side-by-side comparison of fees (see, “You to PPOs… Deal or No Deal”, The Profitable Dentist, Summer 2018). Even though this will be an unweighted sample, it gives you an idea of which PPOs are paying the least. More importantly, seeing your fees side by side with the PPOs is sure to put a fire in your belly.

• Get an estimate of the presence of the various PPOs in your practice. Is MetLife more than 15% of your practice? What percentage of your practice’s patient have Delta?

• Some offices on Dentrix, Eaglesoft, and other software have adopted a procedure by which their software is charging out the insurance companies’ fees. In this way, the amount that the practice is actually producing and writing off is obscured. I’ve seen situations where doctors were writing off $70,000+ per month and didn’t even know it. I strongly advise you to charge out your normal fees and make a credit adjustment code for each insurance company so that you can clearly see how much each PPO costs you each month.

These expenses can be greater than staff wages and it is a mistake not to have a handle on them. Get a handle on them and then maybe you can start throwing them out!

• Are you netting less than 35% of your collections? If you have a mature practice netting under 35%, chances are, you either have: 1.) Staff salaries as a percentage of collections are too high due to under-performing staff or over-staffing. 2.) More likely it is due to the fact that you are writing off so much. It is simply impossible for most practitioners to “outrun” discounts that are more than 40% of your fees.

Are you in a good position to drop a PPO?

Check the boxes below that apply to your practice:

▢ On a scale of 1-10 for personal busyness, you rank yourself at an “8” or more.

▢ You are attracting at least 20 comprehensive exam new patients per month per full-time doctor.

▢ You are checking two or more hygienists per day (per Doctor).

▢ Your hygiene is booked out and it’s hard for new patients to get in.

▢ You do not want to add additional hygiene time because you do not want any more exam interruptions.

▢ You cannot add additional hygiene time because there is no more room in your facility.

▢ You will be cutting back on Doctor capacity (e.g., a Doctor retiring and not being replaced).

▢ You have a good team with low turnover.

▢ On a scale of 1-10, would you rank your administrative staff at a “7” or better.

▢ You are buying a retiring doctor’s practice to merge with your own. This is a great way to top off your practice but you have to be strategic in how you deal with the PPO profile of your practice (the host practice) and the merging one. There is a lot at stake (see “PPOs and Practice Transitions”, The Profitable Dentist, Summer 2015).

▢ You have PPOs that are paying you less than 70% of your fees and are less than 20% of your practice.

▢ You have up-to-date equipment technology and décor.

▢ Your Active Patient Count is 1,500 or more per FullTime Doctor. (The number of unique patients that visited in the last two years.)

Doctor, if you’re maxed out, why work at a discount?

Pulling the Trigger: If you’ve checked a majority of the boxes above and are ready to roll, it’s a matter of picking the right PPO to drop. You don’t necessarily drop the PPO with the lowest fee schedule first although obviously, that is a consideration. There are many others, such as: The PPO’s size in your practice; Out-of-Network Benefits; How smoothly (or not) the PPO processes claims; The sources of your new patients. Deciding which PPOs to drop and in which order, is an important part of our job in advising Dentists.

Fight the Fear!

It’s a lot easier to join a PPO than to leave one. Almost always in these transitions, there is going to be some trepidation on the part of your team. Patients aren’t just numbers to them either. They are worried about job security – if the practice loses too many patients, will they lose hours? They are mostly worried though about unpleasant confrontations with patients. This won’t be an issue if things are handled correctly because the staff will be well prepared and trained. Doctor, if there is ever a time for strategic planning and staff training, it is through a PPO transition.

The Other Side of the Curtain: I am often working with doctors, some who are in and some out of network with a given insurance company. The doctors who left PPOs are doing just fine but the doctors contemplating going out of network are fearful about doing so. The transition is the scary part. Once you are on the other side, it’s not as big a deal.

Doctor, unless you are signed up with every single PPO you can be, chances are you are already out of network with many of your patients. If you really believe that patients only choose their dentist by which dentists are on their provider list, technically you shouldn’t have any patients that you see out of network. We’ve found out time and time again that a network provider status is a factor but not the only factor or even the main factor in how patients choose a dentist or choose to remain with a dentist.

As I alluded to above, I know you hate to even lose one patient, Doctor, but you have to recognize this is a form of pricing. Now your fees are set, in effect, by how many PPOs you join and how deep their discounts are. It’s unlikely that in the past when you did have control over your fees, you set them at the lowest in your area, so you would not ever have to risk losing a patient that wanted the cheapest price. If you bend over backwards to please everyone and to outrun the insurance discounts, you may eventually be creating the sort of environment that appeals only to people that want discounts!

When is PPO Participation a Good Thing? It’s About Balance.

There is no question that because of dental insurance, millions of Americans get better care and thousands of dental practices thrive. Insurance companies have their own economic pressures as they compete to get customers. Much of my writing and work has been about leaving PPOs, but that’s only because things have become so out of balance. And balance is the key word. I rarely recommend that someone go completely out of network with all insurances. And believe it or not, sometimes I recommend they join.

If you are participating in a PPO, it’s important to do so wisely. Yes, sometimes you can negotiate, but you will be more effective in negotiating if you know that you can drop. I’ve had clients who were offered significant increases when they sent in their drop notice (even by PPOs that said “They don’t negotiate”). Some took the “raise;” some chose to drop anyway. Sometimes you can increase your reimbursements from insurance companies by how you line your agreements with them… whether you negotiate with them directly, or through groups like Connection and Dentemax. In some cases, you’ll get a better fee schedule directly, in other cases you’ll get a better fee schedule through the network.

I feel it’s best to work with insurance companies that give decent allowed fees and processes claims expeditiously. Reward those that treat you well with your participation.

With an efficient practice, to a degree you can outrun the discounts. You can also maintain or add to practice revenue by adding services such as implants and aligner orthodontics and adding to your skills so you can keep more endo and oral surgery in house.

In conclusion: With the correct balance of PPO participation and good management, you can have a more secure, profitable practice without running yourself ragged. Don’t Get Mad, Get Smart!

Bill Rossi has over 35 years in practice management. He is an ally for private and independent practices in a profession increasingly impinged on by corporate dentistry and PPOs. You may contact Bill at Bill@AdvancedPracticeManagement. com, 952-921-3360, or his website at

Balancing PPO Participation

FEBRUARY 15, 2016 

By Bill RossiFor many practices, PPO participation is their biggest expense after staff wages (or even greater than staff wages in some cases).  Historically, dental practice collection percentages had been 95%+ (of gross production).  Now it’s not uncommon to see collection percentages at 70-80%…and sometimes less.Most dentists join a PPO in the hopes of gaining or retaining patients.  No dentist likes to lose patients, and when you do lose a patient because you’re not in the network, it can be a powerful inducement to sign up for a PPO.Once you’re participating in a PPO, it’s easy to feel there’s no other choice.  However, you don’t have to take everything the PPOs dish out.In many areas, the PPOs will have the majority of the providers in the area but no PPO has 100% of the providers.  Therefore, it is possible to survive and thrive outside the participation of any one PPO.  For most doctors, it’s a matter of having the right balance.As a general rule of thumb, if you’re collecting less than 90% of your gross production, this should be reviewed.  If you’re collecting less than 80%, chances are very high that you would benefit by cutting back on PPO participation.  It is possible to cut the PPOs and keep the patients!For example, take a look at your own practice.  You probably have patients that are already seeing you out of network.When deciding where to cut back on PPO participation, look first for plans that are 15% or less of your patient base and have ­­­­­­­­­­­­­­­­­­­­­­­­­­­­fee allowances with greater than a 30% discount.Providers have more options in a marketplace that has a greater variety of PPOs.  You don’t have to be chained to any one PPO.The worst case scenario is to be in an area where 90% of the insurance is through just one company.  That makes it tough!  Fortunately, that’s not the case everywhere.  Cut back one at a time.You may be participating with group plans that include multiple PPOs.  There can be “PPO creep” on these plans where you can sign up for several plans and then find out several more had been added despite the fact that you didn’t directly contract with them.Sometimes you’re better off directly participating in the PPO network and sometimes you’re better off just dropping the network altogether.  And to add to the complexity, sometimes the PPO network pays better out of network than it does in network.If you are netting less than 35% of your collections and gross staff wages are in line(<27%) and you don’t have extraordinary equipment/facility expenses, then the PPO’s are the likely culprit.PPOs are sort of like the casinos in Las Vegas.  The “House” has all the odds in its favor.  However, as a player, you can play smart, and sometimes you don’t have to play at all!  You have more power than you think.For most practices, two to four plans are the right mix.  You can adjust the participation in plans just like you’re adjusting ballast in a hot air balloon.  Cut back the plans one by one until you have the right mix of profitability and busyness.  Every year negotiate fees for the plans with which you have contracts (a topic beyond the scope of this article).It’s been my experience that most doctors join a plan too impulsively or leave a plan too irrationally.  This is a serious issue and deserves serious analysis.  A good look at your PPO situation can do more for your bottom line than almost everything else.  You can add $1,000’s and even $10,000’s to your annual profits.We all know that hard work, integrity and skill make a difference in your success, but don’t forget the other component, courage.  Serious consideration and a bit of courage can save you a lot of sweat and stress.Bill Rossi and his team at Advanced Practice Management are actively involved in the ongoing management of over 220 dental offices in the Upper Midwest and monitor over $30,000,000 per month in Dental activity.  They are nationally recognized experts in dealing with PPO issues.

“PPO Transition: Lose the Discounts, Keep the Patients!”

by: Bill RossiGoing through a PPO transition is serious business. It is one of those moves in dental practice management that has substantial risks and rewards like adding an associate or building a new facility.So as dentists “balance” their PPO participation and decide to peel off some of them, I offer the following suggestions based on many years of helping clients through this process.It’s always better to talk face to face with patients about this transition. Letters are rarely thoroughly read, sound self-serving and can confuse and irritate patients.I know because a long time ago I used to help write those letters! I found it wasn’t the best approach.However, if a doctor insists on writing letters, we suggest sending them out a small batch at a time and following up with phone calls—just like you would with a recall notice. In this way, you can adapt and tailor your message. A mass sending of letters can seriously damage a practice.Remember, the goal when a client leaves a PPO is not just to minimize the loss of patients; it’s to slow down any loss. That gives the practice time to “heal up.” So, if the practice is otherwise well managed and has decent new patient flow, it will be fine.Slowing down the loss is another reason not to send letters. If you do things face-to-face, you’ll see every patient at least one more time. Face-to-face communication is always best especially when it’s a potentially difficult subject.As far as deciding which PPOs to peel off, it’s not just a matter of which ones have the lowest fee schedule. There are other key factors, such as the number of patients on the plan, out-of-network benefits for the PPO (plans with good out-of-network benefits are easier dumped than plans with no or puny out-of-network benefits), how many of the doctor’s patients are on the plan and how many new patients are brought in through the PPO.If the conditions are right and things are handled well (the staff coached, the groundwork done, etc.) a PPO transition should result in less than 30% of lost patients from that plan in the first year. However, I ask my clients, “If you lost 50% of the patients on this plan, would you be okay?” That is sort of a gut check.We keep very close track of the statistics before and after a PPO transition. We watch new patients, total patient flow and, of course, production and collections, as well as some other key statistics. That is how our approach to transition has evolved. Doctor, you do have the power to peel off bad PPOs!Bill Rossi is President of Advanced Practice Management. He and his team are actively involved in the ongoing management of over 220 dental practices. He has over 35 years in practice management, has been a contributor to Dental Economics, Excellence in Dentistry, The Madow Brothers Audio Series and Dentaltown CE.Mr. Rossi is an ally for private independent practices in a profession increasingly impinged on by corporate dentistry and PPOs.

According to Bill Rossi of Advanced Practice Management, There Seems to be a Law of Diminishing Returns by Adding the Next PPO

Practices with little or no insurance participation generally see fewer new patients than practices with more participation. However, is there a point where there are diminishing returns with increased PPO participation? Anecdotally, he (and we) have noticed that practices that participate in almost every PPO available don’t see a proportionally greater number of new patients, and sometimes even see a drop. So, he looked into his company’s considerable database to measure this statistically.To summarize the results: Practices that have no or very little PPO participation tend to have significantly less new patients. On the other hand, practices with deep PPO participation do not see proportional increases in new patients to account for the added write-offs. The data shows the best position is to have a modest amount of PPO participation. For most practices this would mean a collection percentage of 80% to 90%. The moral is don’t be quick to sign up for the umpteenth PPO. It won’t be worthwhile

Negotiating PPO Reimbursements

In case you weren’t able to attend our recent Scottsdale, AZ seminar, here are some recommendations from practice management consultant, Bill Rossi.  There can be a lot of money to be made if you handle this correctly:

  1. Do your homework. To get a sense of your fee reductions, prepare a spreadsheet with vertical columns going left to right listing first your top procedures by frequency.  The second column will be your full fee for each procedure.  The remaining columns would be for each PPO plan and their reduced reimbursement for each procedure.  Add the totals at the bottom of each column to see how much of a percentage discount you’re taking in the aggregate from each PPO.

If you haven’t done so recently, raise your fees.  This will give you more ammunition to argue the PPO reimbursements are too low.If you are aware of other doctors’ reimbursement levels, use it to your advantage against the insurance companies.  For instance, an office employee who used to work in another office may tell you that the other doctor’s reimbursements are higher than yours.  This is not privileged information.

  1. Call and negotiate. The doctor should be the one making the call, not an office manager and not an out-of-state management consultant.  You will be the most effective, as you are the only one who can make a credible threat of dropping that plan.

If you call saying you want to renegotiate, you may be given the run-around.  So, if necessary, tell whomever answers the phone that you’re a new doctor thinking about signing up with their network.  When you get through to the network manager, explain who you really are.Do not be demanding and argumentative.  Approach this in the likeable style of detective Columbo and consider the following kinds of lines: “Maybe I’m missing something, but I have to ask, is it true you are paying others more for the exact same procedures?” and “Delta is paying $800 for a crown and Aetna is paying $750.  That’s more than what you’re paying.  Can’t you do any better?  Can’t you help me with this?”Use specific fees to make your case, and then ask them to review all of your reimbursements.  Then, pin them down.  Take their name, when you should expect to hear from them and how you can follow up with them in the future.Finally, review the results to verify that they didn’t raise some reimbursements but lower others.

  1. Odds of success. In Bill’s experience, you might be successful one-third to one-half of the time – even with Delta.  It is well worth the effort.  If for example, Aetna represents 15% of your practice and you can get a 10% raise, then on $100,000 of monthly production, you will earn an additional $1,500 of free money each month going forward.  Get into the habit of doing this with each of your plans each year.

In the next Newsletter, we will summarize Bill’s recommendations for dropping a lousy PPO and limiting the fallout.

Dropping a Low Paying PPO Plan and Limiting the Damage

In the January 15th Newsletter, we summarized how to best negotiate higher PPO reimbursements based on Bill Rossi’s lecture at our Scottsdale, AZ seminar in late December.  What follows is Bill’s advice for dropping a PPO plan and limiting the fallout.  Dropping a plan is a serious business decision and demands careful consideration.  This is not an ideal topic for this Newsletter, as the short format of the Newsletter items doesn’t adequately capture the nuances involved.  With that said, here are some recommendations:Don’t drop a plan out of anger.  Do it rationally.  Before dropping, always try to renegotiate.Ironically, dentists with the most PPO participation (usually 5 or more) are the ones least inclined to drop even though they are in the best position to do so.  It’s not unusual to see these dentists collecting less than 75% of what they produce. If this applies to you, it is time to start peeling off some of them.You don’t necessarily start with dropping the PPOs with the lowest fee schedule.  That is a major factor, but the ideal PPO to drop represents a small portion of your patient base (say 10% or less) and has decent out of network benefits.  The process of dropping this smaller PPO is going to be a “dress rehearsal” for the bigger ones you may later decide to drop.When giving your notice to leave network participation, always be polite and leave the door open for the PPO to pay you more. Sometimes, if they didn’t negotiate earlier, they will now.  In any case, keep the communications professional and positive.Ask them to send written confirmation to you confirming the date of the transition. Before the transition date, do not start telling patients.  Do not send letters!  These letters often aren’t fully understood and can sound sanctimonious.  Instead, train your staff to deal with patients both face-to-face and over the phone.  They have to know how to tactfully address both old and new patients about your participation as “out-of-network providers.”  There are many nuances to this that go beyond what we can discuss here.  It’s best to get professional help through this process.Be supportive of your staff.  The more confident they are, the more calmly they will deal with this transition with patients and the better the patients will accept the change.  Keep in mind that’s it’s very likely you’re already seeing patients from various PPOs on an out-of-network basis.  Patients are generally more loyal than you think.   Very few offices will be completely out of PPO participation.  The goal is to find the right balance.It is also very important that you have a plan to fortify your practice.  That is, you can’t just drop the PPO and do nothing else.  You want to build up the practice through advertising, adding services, and tuning up your systems.The bottom line: If you handle things right, chances are you’ll lose the discounts and you’ll keep the majority of the patients in any given plan.  There are substantial risks and rewards in leaving a PPO.  However, it’s probably easier and less risky than you think it is. There are few decisions that you can make that will add more to your bottom line, not just this year, but for years to come.  You can’t “outrun” the discounts forever.Massachusetts Dentists:  Before you sign up with the “New” Delta, or drop Delta altogether, it is very important to discuss the nuances of these decisions.  Collier subscribers can call Bill Rossi at (952) 921-3360 if you’d like to discuss this and get the “inside baseball” analysis of what’s happening.

Three Case Studies Show How Dropping a PPO Plan Increases Profits

Practice management consultant, Bill Rossi of Advanced Practice Management, has shared some numbers for three practices that he helped guide through dropping the same large national PPO plan.  In each case (one on the East Coast, one in the Midwest and one on the West Coast), the PPO discounted fees about 30% and the PPO patients comprised about 33% of the practice.  In each case, production and collections increased in the months following the drop.  Here are the numbers:Case History #110 Months Before Drop           7 Months After Drop          Gain/MoProduction/mo                     $192,755                                   $203,487                      $10,732Collections/mo                     $112,853                                   $133,968                      $21,115Patient flow (exams/mo)            308                                           320Case History #212 Months Before Drop           6 Months After Drop           Gain/MoProduction/mo                     $84,759                                   $93,130                            $8,371Collections/mo                     $79,005                                   $93,422                         $14,417Patient flow (exams/mo)         240                                           251Case History #35 Months Before Drop               7 Months After Drop*        Gain/MoProduction/mo                     $134,645                                   $138,551                          $3,906Collections/mo                     $106,262                                   $111,323                         $5,061Patient flow (exams/mo)           268                                           249*Dr. working fewer hours this yearAccording to Rossi, these case histories are representative of his clients’ outcomes, though he is careful to say that every case is different.  In our own experience, based on informal polling of doctors who have dropped a PPO, in almost every case, they were very pleased with their decisions.  (The exceptions were unique situations such as the practice being located in a one company town, and it couldn’t handle the huge patient loss after it dropped that company’s PPO.)In each of the above cases, the patient retention has been better than the doctor and staff expected.  There is always some patient loss and some hassles as the practice goes through the transition, but even in the worst case scenario, the practice can always sign back up.  One large national dental insurer might threaten that they won’t take a practice back for two years, but Rossi believes that is probably a bluff.Given the cost of PPO participation, we’re dumfounded that more doctors aren’t taking action and renegotiating or dropping all PPOs that discount fees by 20% or more.  Fear is the likely culprit.  Every dentist is out of network with some plans, yet still manages to treat patients who have those plans.  It is definitely possible to cut back on PPOs and stay busy.It’s high time that dentists turn the tide on PPOs.  Make it a goal to peel back one or two in the coming year.  Until more dentists get proactive, PPO reimbursements will continue

Is Your Practice Primed To Drop One Or More PPOs?

Is Your Practice Primed To Drop One Or More PPOs?

PPO write-offs are one of the biggest practice management issues dentists face.  Dropping PPOs can add tens of thousands of dollars to the bottom line.  In fact, the impact on net profits is magnified beyond the simple percentage increase in the fee reimbursement by going out-of-network.  For example, if overhead remains fixed at 60% of revenue, then a 10% increase in fee income translates into a 25% increase in the bottom line.  We asked Bill Rossi, a practice management consultant and PPO expert, for the practice attributes he looks for before recommending that his clients drop a PPO. Here is Bill’s response:

While the rewards can be great, you never want to go off half-cocked.  We want to make sure the practice is ready.  Here are the signs I look for:

  • On a scale of 1-10 for personal busyness, you rank yourself at a “8” or more. For example, are you attracting at least 20 comprehensive exam new patients per month per full-time doctor?  Are you checking two or more hygienists per day?  If you’re maxed out, why work at a discount?
  • Your hygiene is booked out and it’s hard for new patients to get in.
  • You do not want to add additional hygiene time because you do not want any more exam interruptions.
  • You cannot add additional hygiene time because there is no more room in the facility.
  • You will be cutting back on Doctor capacity (e.g. a Doctor retiring and not being replaced).
  • Do you have a good team? Low turnover?
  • On a scale of 1-10, would you rank your administrative staff at a “7” or better?
  • Do you have PPOs that are paying you less than 70% of your fees and are less than 20% of your practice?
  • Do you have up-to-date equipment and technology and décor?
  • Is your Active Patient Count 1,500 or more per Full Time Doctor? (The number of unique patients that have had a visit in the last two years)

It’s a lot easier to join a PPO than to drop it.  But, if you’re collecting less than 80% of your gross production, you should seriously look into your options.

In an upcoming Newsletter, Bill will explain how to fortify your practice before and during the PPO transition process.

Bill Rossi, President of APM can be reached at or (952) 921-3360.

Fortifying Your Practice Through A PPO Transition

By Bill Rossi:

This article is a follow-up to “Is Your Practice Primed to Drop One or More PPOs?” which appeared in the October 15th Newsletter. 

So you’ve pulled the trigger and decided to drop a PPO.  It’s important that you don’t just leave PPO participation.  You have to be working toward something.  The stimulation of a PPO transition can help create a “Practice Renaissance.”

You’ll be adding thousands to your collections each month – plow some of that back into strengthening the practice through:

  • Taking good care of your team: Chances are, they have some trepidation about the transition. Let them know that as they make progress leaving a PPO, and on the above, that there are rewards for them too.  Give them a stake in the practice’s success.  Perhaps they share in, say, 15% of the practice’s increase in collections over the next 12 months.  Or, add a group bonus or celebration for collections over a certain target.
  • Continuing Ed: Learn new procedures to keep more procedures in house.
  • Team Continuing Ed: Keep you and the team psyched up and energized to present the treatment you already can provide.
  • Tune-up your Recall System: Do not assume that your team has this nailed down. This is the number one way you’ll keep patient flow strong and your active patient base active. 75% of your hygiene patients should be committed to their next appointment.  You have to actually measure  Many offices overestimate how well they are doing.  Set up a well-planned pattern for contacting patients due and past due including calls, emails and texts.  Put someone in charge of monitoring this, your most important administrative system.
  • Make the best use of your digital communications: (e.g., Lighthouse, SolutionReach, RevenueWell, etc.): Set up quarterly email blasts to patients on topics such as implants, Dental Health Month, your team, seasonal events and so on.
  • Have a “Clinical Protocol Meeting”: Go over all of the procedures your practice does with team members.  Refine and reassert your clinical guidelines.  See my article on Clinical Calibration ( If you do more for the people you see, you don’t have to see more and more people on the PPO treadmill.
  • Ask the hygienists to light up and track use of the intraoral cameras: This should be done for the majority of your adult hygiene patients.  Over half of intraoral cameras are used less than five times per week.  And make sure every hygienist has a working intraoral camera.
  • Train your administrative team on how to tactfully deal with financial arrangements for patients in and out of network. They have to know how to do this.  Talk them through how they will handle patients’ questions, such as, “Do you take my insurance?,” “Will insurance cover this?, “Why did you drop my PPO?,” and “Can I remain a patient?”  One good all-purpose phrase is, “No insurance covers 100% of recommended treatment, but it certainly helps and you’re lucky to have it.  Here’s how your insurance works here . . .
  • Google Reviews matter: Pick someone in your office to run the campaign to get these. At least 50 per full time Doctor is a worthwhile goal.
  • Update your website: If it’s been more than three years, it’s time!
  • Train your administrative team to tactfully welcome patients into the practice, whatever their insurance.
  • Don’t send letters! (unless the PPO does). It is best to talk to patients face to face. Assume that most of your patients will want to stay and act accordingly. I can assure you Doctor, that patients like you for more than your “Network Status.”  You will keep more than you think.  If a patient does decide to leave, be graceful about it and let them know, “They are always welcome back if their circumstances change…” Some will come back.

Dentists have spent the last 20 years signing up. Congratulations on starting to “un-sign” up and taking back control from the PPOs.

Evaluate PPOs When Building Your Practice By Purchase

Our 2014 practice economic survey published last month revealed that most practices are now operating at only 80-89% of optimal capacity, defined as being as busy as the doctor wants to be, doing the kind of dentistry the doctor wants to be doing. This means that the average doctor is losing $100,000-$200,000 in profits annually, compared to what she would be making at 100% of capacity.

Many doctors have attacked their busyness problem by increasing external marketing expenses or, even worse, signing up for or increasing managed care participation. However, we recommend a much more cost-effective strategy: purchase a nearby competitor’s practice and merge it into your practice’s existing location.

This allows doctors to build practice volume to the desired level as quickly as possible. Since fixed overhead costs such as rent, equipment, utilities, insurance, etc. have already been covered, incremental overhead (usually just supplies, lab, and additional labor) usually runs only 30-40% of the additional volume purchased. As a result, the purchasing doctor can bring 60-70% of the added volume to the bottom line as increased profit, before taking into account annual debt service costs. These annual debt service costs on practice purchases typically run no more than 10-15% of the incremental added collections, and then only for the typical 7-year buyout period. As a result, a purchasing doctor can usually generate a net profit of 45-60% on the added volume purchased, even after paying the related debt service.

While the economics make adding another practice through purchase a “slam dunk” financially, doctors must carefully analyze the impact of managed care before cutting the deal. Doctors who “leap before they look” can lose thousands of dollars to unforeseen managed care implications, says Bill Rossi, a practice management expert.* As the trend toward group practice continues, Rossi has seen an increased number of practices grow by purchasing one or more additional practices. Rossi has worked with dozens of clients through this practice purchase/merger process and describes below some important managed care issues that must be carefully considered and successfully navigated.

For example, what if you’re purchasing another practice that’s participating in a large PPO that your practice is not? Do you join that PPO for the sake of having a smoother transition?

Continuing with this example, let’s say you’re a Delta Premier provider. In many parts of the country, patients with Delta Dental insurance have the option of going to a Delta Premier provider and getting that level of benefits, or going to a Delta PPO provider where they have the incentive of reduced co-payments.

If you are a Delta Premier provider (the “regular Delta,” not with Delta PPOs) and you buy a practice that’s with Delta PPO, those patients will experience a transition as they blend into your practice. This must be handled carefully, or the patients you are assuming the care of may leave your practice.

On the other hand, if you join Delta PPO and have a significant number of Dental Premier patients, you will experience deeper discounts on the patients you already have. This can be terribly expensive, in fact even more expensive than the actual practice purchase in some cases!

It’s very important to get a specific list of all PPOs the selling doctor is participating in, along with the related fee schedules, as part of your due diligence related to the purchase. Unfortunately, many doctors purchase without knowing what PPOs the practice participates in. Sometimes, even the current owner isn’t aware of the plans for which they are a provider!

Even if the practice you’re purchasing participates with the same PPOs, be sure to compare both practices’ PPO fee schedules. Believe it or not, PPOs do pay different fees for the same procedures to different providers! The practice you are purchasing might be getting higher (or lower) reimbursements than your practice. Obviously, doctors would want to negotiate with the PPO (if you’re going to continue to participate) to ensure that you get the higher fee schedule of the two, even if you are bringing the selling doctor over to work in your practice.

If you’re purchasing a practice that has significantly more PPO participation than your practice does, make sure that you and your staff are ready to take these patients through the transition, much the same as if you were leaving a PPO. However, this situation is significantly more delicate, because you don’t have the patient loyalty working for you yet.

On the other hand, if you’re purchasing another practice to “top off” yours, it puts you in a better position to dump PPOs and take some patient loss. As you can see, successfully navigating the managed care issues in a practice transition can be quite complicated.

In conclusion, the right “PPO plays” can add thousands of dollars to your bottom line when you are buying a practice. Make sure you perform the due diligence to determine all the facts and then implement a carefully planned strategy to come out ahead.