Harnessing the Power of Dental PPO Negotiations
As a dentist, you likely understand the importance of negotiating with PPOs (preferred provider organizations) to maximize your practice’s revenue potential. And if you don’t yet understand, you should. PPOs are a type of dental insurance plan that contracts with dental providers to offer discounted rates to their members.
For instance, a patient may purchase a healthcare plan through an insurance company and that insurance company may contract with you to be one of their preferred providers. If you are a preferred provider, patients who see you will pay a lower cost because you are in-network, meaning you have a contract agreement with the insurance company. While PPOs can increase patient volume, they can also come with challenges like low reimbursement rates and limited treatment options.
Fortunately, there are several strategies you can use to effectively negotiate PPO contracts and increase your practice’s profitability. Here are some things you should know about the basics of PPO negotiations. Also, here are some tips that will give you the ability to successfully navigate the process.
Understanding Dental PPO Negotiations
Dental PPO negotiations can be complex and time-consuming, but they’re also a crucial part of growing your dental practice. There are a few key concepts to keep in mind if you want to negotiate a PPO contract:
You need to know your numbers. Before you enter negotiations with a PPO, it’s essential to understand your practice’s financials inside and out. If you’re already involved in a contract, you need to have a crystal-clear idea of the following:
- your dental practice’s revenue
- dental practice’s expenses
- profit margins
- how much you receive from PPO reimbursements
Knowing your numbers will give you a clear picture of your practice’s finances and help you make informed decisions during negotiations.
You also need to have a clear understanding of the PPO’s policies. It’s important to thoroughly review the PPO’s policies and procedures before beginning the negotiation process. This includes understanding their fee schedules and payment policies. Remember – this is not only something that can affect you and your staff. A PPO can affect your patients as well. This can affect the treatment options your patients have at your practice, so be sure you understand any limitations on treatment options. Having a clear understanding of these policies will help you negotiate more effectively and avoid any surprises down the line.
Also, it’s worth noting that negotiating with PPOs requires preparation and strategy. Before entering into negotiations, it’s essential to have a clear understanding of your practice’s value proposition. This includes the quality of care you provide and the services you offer. You should also have a plan for how to approach negotiations and a clear understanding of your bottom line.
Tips for Successful Dental PPO Negotiations
Now that you understand the basics of PPO negotiations, you can dive into some specific strategies to maximize your reimbursement and harness that negotiation power.
When walking into a negotiation, know what you have to offer and be confident in your value – know what you can use as leverage. As previously mentioned, understanding the value of your practice’s proposition is key to successful PPO negotiations which involve:
- being able to effectively communicate the quality of care you provide
- communicate your treatment philosophy
- convey the services you offer
By highlighting your practice’s strengths, you can demonstrate your value to the PPO. You can also negotiate for higher reimbursement rates and fewer restrictions.
Another powerful tool you have available to you is knowing the data from your practice and making that data available as proof of your value during negotiations. Track your practice’s performance metrics so you can demonstrate its value and negotiate for better reimbursement. Patient retention rates and treatment case acceptance are just some of these performance metrics that you can track. You can also use data to identify areas where you can improve your practice such as:
- increasing patient volume
- optimizing your treatment options
While knowing your worth is potentially the most important thing you can do, it can help to build relationships with PPO representatives. If you’re able to cultivate positive relationships, you may find that you can negotiate more effectively. Moreover, building a more profitable practice which includes the following:
- communicating with representatives regularly
- providing feedback on their policies
- being willing to negotiate in an honorable, trustworthy manner
By building trust and rapport with PPO representatives, you can increase your chances of successfully negotiating for higher reimbursement rates.
Finally, it’s important to remember that you always have the option to walk away from a PPO contract if the terms are not favorable. While it can be tempting to accept lower reimbursement rates or unfavorable policies to bolster the number of incoming patients, accepting that lower offer may ultimately harm your practice’s bottom line. By being willing to walk away from unfavorable contracts, you can protect your practice’s financial health and remain open to negotiating for better terms in the future.
If you’re ready to learn how to harness the power of negotiation and sign the dotted line under the most favorable terms for you and your patients, PPO Negotiation Solutions can help. We can get you started with assessments for your practice available at no cost to you and a consultation to discuss the terms you’re looking for in a PPO. Contact PPO Negotiation Solutions today!