A frequent topic of discussion on social media these days is whether to drop out of dental insurance plans. In the most recent Levin Group national dental survey, we found that only 10% of practices stated that they were completely fee-for-service. This number has been stable for some time, remaining relatively the same even during and after the pandemic. But it does mean that approximately 90% of dental practices participate in one or more dental insurance plans. The question is, should you?
Start with analysis.
We received many calls, texts, and emails at Levin Group asking about dropping out of one dental plan or all dental plans. These are often triggered by frustration on the part of the doctor over low reimbursements. The decision to drop a specific plan should depend on analysis and not emotion, and it certainly shouldn’t be a knee-jerk reaction.
The following points need to be considered:
- What percentage of the practice revenue is derived from dental insurance reimbursements?
- What percentage of the practice revenue does each individual plan represent?
- What percentage does each individual plan represent of the total dental insurance reimbursement revenue for the practice?
- Rank each of the plans in priority order by revenue.
- How many patients are in any of the insurance plans accepted by the practice?
- What percentage of patients are covered by dental insurance plans in which the practice participates?
- How many patients are in each individual dental insurance plan that is accepted by the practice?
- How many patients have dental insurance plans in which the practice does not participate?
- How many new patients joining the practice are in dental insurance plans that are accepted by the practice?
- How many new patients joining the practice have dental insurance coverage that is not accepted by the practice?
Analysis is important when making financial decisions. At first, this may seem complex, but in reality, it is relatively easy once the basic data is available. It is simply a series of mathematical calculations that look at both the numbers and the percentages from several different viewpoints.
Not to get too detailed, but if the practice only looks at patient numbers or practice revenue, it is probably not analyzing the insurance picture deeply enough. It is important to look at both because one could override the other in making the correct decision.
Every year, practices should perform an insurance analysis. Using the questions or points made above and other common-sense calculations and comparisons will allow a practice to quickly analyze whether it makes sense to keep certain insurance plans or even to add others. Once the data is available, it takes only a few hours to run the analysis and determine where the practice stands. And those are hours well spent.
ABOUT THE AUTHOR
Roger P. Levin, DDS, is the CEO and founder of Levin Group, a leading practice management consulting firm that has worked with over 30,000 clients to increase production. A recognized expert on dental practice management and marketing, he has written more than 60 books and over 4,000 articles and regularly presents seminars in the U.S. and around the world.
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