Re-Negotiating Your PPO Contract Fees
Pre-COVID-19, most practices contracted with third-party payers planned to re-negotiate their contracts at the earliest possible date allowed by the carrier – generally every 18-24 months. The COVID-19 era of dentistry creates an opportunity to re-negotiating PPO contract fees prior to the end of your contract term.
The cost of providing dental care is increasing with added PPE costs and safety engineering systems, such as Plexiglas shields for the front counter and air purifying systems. You may consider an additional infection control fee per visit, under D1999, to help cover the costs of your PPE, however, there are other costs to consider. A soft opening requires fewer team members and patients in the practice, increased time per patient visit to accomplish sterilization tasks, and scheduling to allow for more physical space between patients. All of these affect your net profitability. Plan to contact and re-negotiate fees now, regardless of your PPO contract date limitations.
Pre-Work to Re-Negotiating PPO Contract Fees
- Your current fees: The first step to successfully re-negotiating PPO is to review your current office fee schedule. If you set your UCR fee schedule too low for your area, you will have a difficult time negotiating. It is important to maintain your bargaining power. Ideally, make sure your fees are in the 80th percentile for your zip code. We can provide a complimentary fee analysis to get you started (reach out to your Account Manager or Practice Support Team for more information).
- Stay up-to-date on popular plans in your area, in addition to the plans you are already in-network with. Research plans offered by major employers within your targeted patient area. Consider schools, hospitals, federal and state offices, as well as large employers who may have a national footprint. Call the Human Resources Department to inquire as to who holds the contract for their dental benefits. This provides opportunities for new contracted plan agreements that may benefit the practice more than your current contracts.
- Determine your top 30 codes based on production to the practice. For most dental practices, 30 codes will account for 90% of your billable production. Determine the top 30 codes by running a “Report by Procedure” code report, or get a general listing of these from our Practice Support Team.
- Compare contract fees from each provider with your UCR fees. Prepare a weighted average write-off by multiplying each code and fee by the frequency of use for the last 12-months. This provides the basis for your re-negotiation conversation. Our Practice Support Team provides this service at no charge to our clients, as part of our complimentary consulting service.
Determine Your Leverage
Be prepared to discuss how your practice can benefit the payer and the employers they are serving.
- Know the added per-patient expense you are incurring due to COVID-19 related changes. This can be broken into added disposable PPE costs per patient, as well as added per-patient estimates to recover engineering controls.
- Geographical location and saturation of dentists in your area
- Specialty services offered
- Appointment availability for new patients and current subscribers
- Availability of patient-convenient hours offered. For example, 30% of scheduled practice hours are outside traditional 8-5 work hours.
- Retention rates of current plan subscribers
- Your philosophy of care in regards to preventative services designed to avoid the need for more extensive, and expensive, dental treatment. For example, 40% of the services billed last year were to provide preventative care.
- The availability of teledentistry. Many carriers use teledentistry as a selling benefit for additional employer recruitment.
- Patient satisfaction as evidenced through internal surveys and social media review sites. For example, 350 5-star Google reviews from patients attest to a positive patient satisfaction rate.
- Electronic claim processing capacity
- EFT enabled for receipt of claims payments
- Use of online portals for eligibility and pre-authorizations
- Date of last contract increase as compared to the cost of living increase in your area for the same time
Contact the Carrier
- Determine the correct agent to speak to; this will likely be a “retention specialist” or “provider relations manager/specialist.”
- Discuss your situation, focusing on the added overhead you are incurring per patient that is resulting in an automatic decrease in revenue from your current contract.
- Carefully review all advantage points you have that will benefit the carrier.
- Ask for a review and increase for 30 codes you select.
- Ask for an additional per-visit fee specifically to cover your added PPE expenses. If this is not possible, ask for D1999 to be considered an uncovered benefit, rather than a disallowed benefit, so you can balance bill the patient.
- Ask each carrier if they have a “co-lease agreement” or “network share arrangement/agreement” with any other carriers. This happens when a plan, such as Aetna, shares fee schedules with another well-known carrier, such as Principal. Find out if the new fees will apply to those carriers as well.
- Plan to contact the network share opportunity individually if you are unable to negotiate successfully with the carrier. Keep in mind you can always opt-out of a network share arrangement. You must submit a letter with your signed contract stating your opt-out preference. Continue negotiations through e-mail to create a paper trail.
- Summarize any phone conversation in an email to create a written verification of your discussion.
- Ask for a custom fee schedule. Let them know you would like a custom fee schedule based on 30 codes. (30 codes you identified previously.)
- A custom fee schedule is more successful than asking for an overall percentage increase to your contracted fees.
- Request a response to your proposal within 72 hours.
- Be prepared, a few insurance carriers simply do not negotiate. Everyone in the same geographical area operates under the same fee schedule. These carriers may be willing to offer a per-visit added reimbursement for PPE expenses. Other plans will offer “tiered” schedules. If you don’t accept the first one, they send the second schedule that is slightly higher. You will benefit the most from a custom schedule based on your 30 codes.
- Review fees offered and do not hesitate to send in a counter-proposal (if you never ask, the answer is always no).
- Once fees are accepted, keep a list of the accepted contract terms and copies of all final fee schedules.
- With dentists facing dramatically increased costs and decreased patient volumes to comply with new infection control requirements and state and local public health orders, managed care plans need to provide relief now in order to maintain their provider networks and prevent extensive disruption to oral healthcare access. We encourage you to contact your contracted dental plans to stress the need for stabilization grants that will help sustain dental practices in the new COVID-19 environment.
TAKE ACTION: If you are concerned, here is a template that may be helpful in your efforts to communicate to each of the major dental plans in your state, with which you are a contracted provider.
A few other notes:
- The dentist should initiate the re-negotiating process. Statistically, the dentist has a much greater chance of re-negotiating favorable PPO fees.
- Remain politely persistent. Emotional conversations lead to unfavorable outcomes.
- Stay organized with bullet points to refer to and an Excel spreadsheet to calculate fee schedule offers.
- The first offer may not be the final offer, continue to negotiate until you have exhausted the process.
- Audit claims over the next three months to make sure the agreed fee schedule is honored. Create a healthy protocol to audit a dozen claims on a semi-annual basis.