Recently the ADA released a letter on negotiating and handling contract negotiations. While we appreciate the ADA’s commitment to advocating for dental practices, we found that most information included in this letter is inaccurate and has proven to be ineffective over the last couple of years.
Yes, you may need to readjust your UCR fee schedules. We often speak with practices who have not evaluated UCR fees for 5+ years. This is a procedure that should be implemented yearly. As stated in our last newsletter, you should never bill the insurance companies your contracted fee. Always bill your UCR. Insurance carriers do monitor the average fees being submitted per region and design standard increases accordingly. Keeping your UCR fees extremely low or billing your contracted fees will reduce the likelihood of natural adjustments with major companies. Our last post that includes information about UCR fees can be found here.
As far as negotiating your PPO rates, the method described in the letter provided by the ADA may have worked years ago, with some success. But today a practice could waste over six months just to see one or two companies offer a very small percentage increase, requiring them to keep the same fees for another three years.
PPO optimization is not as simple as providing practice data and requesting an increase. This may work if you are looking for a minimal percentage. Things have changed within the insurance industry to the point that the best increases and possibly the only increases in fees you will see is through advanced leverage and optimization of PPO fees. This requires a very thorough knowledge of hundreds of potential leasing arrangements and structures, including the order of precedence that will naturally take place and identifying contracts you carry that “set the bar low”.
The industry has become overly complex, which allows the carrier to maintain much more control over what they pay you and whether they can justify an increase. We encourage all practices to speak with a professional prior to beginning negotiations, signing any new contracts, or terminating existing contracts. A change to one insurance contract creates a ripple effect that can reduce fees for other contracts simultaneously or add participation with carriers you were not intending to add. Education and understanding of the insurance industry as a whole are key to obtaining the highest fee increases possible.
For a more in-depth look at PPO Optimization, you can review our article published in Dental Products Report last fall by clicking here.
We invite any practice with questions or interest in PPO services to schedule a no-obligation consultation by clicking here.