We’ve Been Given a Heads Up on Insurance Changes – How are You Preparing?

There’s been several notices lately of changes in the dental insurance industry. This summer news came that WDS (Delta of Washington) instituted fee schedule decreases to dentists with little notice given. Last week Delta of Idaho announced similar decreases and Delta of California has frozen fees. Additionally, Delta of California has changed their policy so that a dentist can no longer sign up as a Premier Provider only, new providers must also accept the PPO plan with the corresponding lower fee schedule. Typically a Premier fee schedule is approximately 20% higher than a PPO fee schedule so the impact is alarming. The next question is how soon it will take for Delta to stop offering Premier policies to patients? When that happens, how will that affect dentists who are currently in-network only at the Premier level? While it may seem that these changes are affecting only dentists who accept Delta in a limited number of states, the reality is that these changes are likely to move across the country with Delta and are being watched closely by other insurance companies in the industry. If Delta can drop fees 5-15% it appears logical that other companies will follow suit, it’s just a matter of time. How does this affect a typical practice and what should dentists be taking into consideration right now in an attempt to be proactive to these changes? First, be sure your fee schedules are as high as you can get them and that you are not leaving any money on the table. Do this as soon as possible because if Delta proves that they can drop fees I expect fee schedule negotiations with other companies to be harder to come by. Just yesterday my partner, Lisa, was discussing a very low fee schedule one of our clients has with an insurance company rep, noting that it was substantially lower in this particular market than other companies. The rep’s response was “I know! We are still signing up doctors though so we don’t need to increase fees”. When we see fee schedules at 45-50%+ write-offs and dentists are still going in-network more than out-of-network means the leverage dentists had in a better economy is unfortunately gone. We have heard directly from the reps of another major insurance company that similar changes are following and will begin being instituted very shortly in various parts of the country. For newer dentists signing up for a plan for the first time it’s critical that you get the highest fee schedule available in the beginning, not the first offer. Any potential future increases (or decreases) will be based off your current fee schedule and if you start out taking a low ball offer you will never make it back up. Second, consider all ways you can diversify your patient base now before insurance companies force you to. Some practices that thrive on PPO involvement may not see the same need to shift their buiness model but the average solo practice dentist will – ask the dentists in Washington and you’ll get an earful. Currently about 50% of the population does not have dental insurance so creative ways to appeal to the non-insured I believe are worth addressing. I, along with many of my other consultant peers, recommend Quality Dental Plan that is owned by dentist Dan Marut as a turn key option for offering an in-office plan to those who are looking for help with their dental costs but don’t have a traditional insurance option. Let’s be honest, traditional insurance is a horrible deal anyway but a surprising number of potential patients still perceive they can’t afford to see a dentist without insurance so this is a nice alternative to offer. The beauty of this plan is that Dan has created all the marketing and implementation materials so it can be started quickly and easily. Another way to diversify is expanding the procedures you offer to services that are not tied to dental insurance. Elective procedures such as implants and short term ortho are the buzz right now as well as sleep apnea and Botox in some areas. This yet another reason to be involved in your state’s legislation if you are in a state that still forces you to charge PPO fees for non-covered or maxxed out services. Third is to be realistic about debt levels. While I’m not an alarmist I do think the next two years will be telling about how much the insurance companies will be able to cut fees before the economy hopefully begins to rebound and the pendulum shifts again. At that point however, traditional insurance benefits may not rebound and permanent changes in how dentists participate may have arrived. There will be some dentists who will expand and continue to grow regardless of the economy or changes in the insurance industry. I do believe that the vast majority will feel some degree of effects coming and that a degree of caution would be wise in terms of how much debt a practice adds on in the near future. The more financial freedom a dentist has the easier it will be to walk away from insurance downgrades. As evidenced by the unexpected nature of the WDS changes, it’s exceptionally difficult to make those changes when an entire state of dentists are given this kind of news all at once. Those not on the immediate west coast still have a degree of time to position themselves for these changes and it would be wise to do it sooner rather than later. Fourth is to educate your patients. Their employer’s human resources staff does not care what you think of their dental insurance contracts however they are there to listen to employee feedback. Patients need to realize that if they advocate with their employer for plans that allow them to see their choice of dentists with reasonable coverage that they will have more options down the road. The best time to do that is before fee schedule decreases happen. We’re working with several practices right now where dentists are 5-10 years away from retirement and want to know whether they should go in- network with more plans or fewer plans to not only fill chair time now but also to position themselves well for the sale of their practice upon retirement. For these dentists it’s important to make decisions that are good in the long term of retirement planning as well as the short term and can mean tough choices about associates, staff, overhead and capacity issues. I’d be curious about choices other offices are making to position themselves well in light of upcoming changes and any relevant information that WDS and Idaho dentists have in addition to the input on the current “Delta Detnal Lowering Reimbursement in Washington” thread on DentalTown that’s a must read.