Delta Dropping Premier Fees in California – How Does it Affect You?

Notice was given this month that Delta is lowering fees in California for Premier dentists.  For details on the specifics of this change from the California Dental Association, visit their site here:  http://www.cda.org/NewsEvents/Details/tabid/146/ArticleID/771/CDA-responds-to-Delta-Premier-fee-reduction.aspx

If you are not located in California and are tempted to ignore this information, we suggest you pay close attention as it’s a trend that is likely to move into the rest of the country.  We’ve received many questions about this change and how to position a practice to withstand the effects as much as possible.  A few suggestions that we’ve suggested to our clients are below:

1. In some states Delta Premier is no longer an option with new contracts. If you are in a state where that option is still open then if you ever were considering being a Premier only provider now is the time you want to consider finalizing that decision. We don’t know how long that window will be open in other states, could be 1 month, could be 5 years but the trend is certainly moving towards eliminating Premier only status. We tell all of our clients that we assume at some point Delta Premier is going away so the move to Premier only status, where available, is still a temporary move. You’re catching the train while you still can, getting higher reimbursement rates in the short term and proactively planning ahead to position your practice so that when Delta Premier is gone you’ve done what you can to mitigate the risks.

2. If you are Premier only and 5-10 years away from retirement assume that your practice will not necessarily have the same value for the dentist who buys your practice anymore. If 20% of the practice is Delta then a purchasing dentist will see that pool of production drop 20-25% in collections. So a practice with $200,000 of Delta production for a Premier dentist would typically drop $50,000 in collections if the purchasing dentist has to take PPO instead. This is how Premier will eventually go away (along with the newly instituted drops in fee schedules) but will be a factor in the sales prices of practices for Premier only dentists in the next several years as the policy continues to spread nationally.

3. When Delta starts changing major policies and dropping fees is when dentists come out of the woodwork to start looking at how other companies compare with their fee schedules. Don’t wait for that to happen. As soon as Delta drops fees then the other companies know it and are bombarded with dentists calling to negotiate. Be proactive, negotiate with the other companies you participate with now and as often as possible (18-24 months in most cases) so that you’re in the regular flow of negotiations and aren’t subject to the timing of Delta policy changes.

4. Give serious thought about how growth, added locations and associates may play into your future. Even if your office is currently Delta Premier only, in the states where these policies have changed, a new associate must take PPO even when they are working under the same tax ID number/ownership as the Premier dentist. We even had a situation recently in Georgia where a father who was a Premier dentist was bringing in his son to the practice and not only did the son have to take PPO, they were requiring that the dad change to PPO. We are in talks right now with a Premier dentist who is getting ready to build a second location and he’s put those plans on hold until we can get written verification from Delta that his new office will not be required to take PPO. Even if the new office is under the same tax ID number that is no guarantee you can still keep that new location or any new associates Premier. That’s why written clarification directly from Delta is so important.

5. Despite the lack of control dentists may have about this there is one thing dentists could do that would change the Delta issue to some degree. In most cases, Delta will not send dentist the check if they are not participating at Premier level as a minimum. Dentists should take up this issue just like they have taken up the issue of PPOs not being able to control what dentists can charge if it’s a non-covered benefit. Currently there are 29 states that have passed the law which states that dentists cannot be held to the PPO schedule if the insurance policy won’t cover the services. Dentists now need to fight for laws that say insurance companies can’t refuse to send payment directly to the doctor based on participation status. Patients (you know, the ones who actually pay premiums) should legally be able to direct their benefits payment checks wherever they want. This would be a huge shift because currently many dentists participate only at the Premier level so that they don’t have to either charge the patient up front for services or chase the patient down later for $ because the patient spent the insurance check instead of paying their dental bill. Many dentists feel strong-armed into participation with Delta for this reason and a legal change to this would at least be an attainable step in the right direction.

 

There are no easy answers to the upcoming changes that are being forced upon dentists but do your best to keep control of your options!