Why are PPO negotiations so important? Many dentists wish to avoid this complex and time-consuming process altogether, but errors in your PPO negotiations can cost you serious money.
Did you know?
- Dentists write off nearly 40% of PPO reimbursements. That’s almost $4,000 of every $10,000 you make on insured patients!
- It takes over 30 hours to complete credentialing for a dental office.
- 7 out of 10 dental startups do not set their UCR fees correctly.
Navigating PPO negotiations in the dental industry can be daunting for dental practices of all sizes. Participating in PPO networks can be a great way to attract new patients, but it can also be a significant financial burden if not managed properly.
Essential PPO Dynamics for Better Financial Success
A Preferred Provider Organization (PPO) is a group of dentists under a joint contract to charge specific fees for approved services. Dentists and specialists in a PPO network agree to provide services at discounted rates ranging from 25% to 50% less than the provider’s usual and customary rates.
Here are some essential dynamics to consider when negotiating or renegotiating your PPO contract.
Understand Your Costs
Before entering into any negotiations, it’s essential to understand your costs. You need to know the cost of the following:
- Property rental or ownership
- Property upkeep
- Utilities
- Insurance
- Supplies
- Taxes (local, state, & federal)
- Employees (salary, benefits, training, etc.)
- Professional fees & associations
- Marketing
An accurate evaluation of your operational costs is critical to determine your pricing and profit margins. Knowing your costs is also essential for determining where to reduce costs for a more significant profit.
Know Your Worth
It’s essential to know your worth when negotiating with PPO networks. You need to understand what your services are worth and how they compare to other dental practices in your area. This information can help you negotiate better rates with PPO networks.
A vital aspect of understanding your worth involves setting your fee schedule. Your “usual, customary, and reasonable” (UCR) fees are the guidelines by which an out-of-network dentist can charge a patient if the dentist is not a member of the patient’s PPO network.
You must adequately balance your fee schedule to at least 80% to ensure your practice remains competitive while allowing room for future negotiations. All your PPO contracts with insurance providers are based on your UCR fee schedule. Therefore, make sure you balance your fees before you negotiate for a PPO reimbursement contract.
Negotiate from a Position of Strength
The dual knowledge of your costs and worth above allows you to negotiate from a position of strength. Insurance companies desire a popular and vital dental practice. They want profitable practices in their PPO network because this makes them a healthy profit, too. With accurate knowledge of your needs and a good idea of your overall value, you can push for better fees and benefits from the PPO.
Be Flexible
This may seem contradictory to the above topic, but it is integral to negotiations. Being willing to compromise on some terms, and knowing where to compromise, can often win you a much better overall PPO contact. For example, you may need to accept a lower reimbursement rate for specific procedures, like those you don’t often do, in exchange for higher reimbursement rates for more popular procedures. Dentists willing to give and take for the greater good will find PPO negotiations go smoother and often more in their favor.
Keep Up with Industry Changes
Like everything else, today’s dental industry is constantly changing, and keeping up with those changes is essential. This includes changes in reimbursement rates, new technologies, and changes in regulations. Staying informed can help you negotiate better deals with PPO networks. Sometimes this means you should begin offering unique or specialized services to meet modern patient demands. This can often mean investing in new equipment and training for yourself and your team, so consider those costs in your PPO negotiations.
Consider Outsourcing Your PPO Negotiations
Outsourcing your PPO negotiations to PPO Negotiation Solutions can save you time and money. Our team of seasoned PPO negotiators can negotiate on your behalf and help you get better rates with PPO networks. They can also keep up with industry changes and ensure you get the best deals possible. When we negotiate better deals with your PPO networks, this attracts more patients to your dental practice and significantly increases your profitability.
We help:
- Startups
- Fee-for-Service Practices
- Established PPO Practices
- Practices Seeking to Add Associates
- Those Seeking to Purchase a Practice
- Those Needing Assistance with Credentialing
Take our PPO Revenue Assessment to determine which PPO contracts may be eligible for negotiations and an estimated revenue increase. Or, contact us today to schedule a consultation to discuss your unique needs.