Game ON—-Insurance Reimbursement
by Melinda Heryford
There is a great deal going on in the dental community pertaining to insurance. With the changing economic environment so goes changing insurance reimbursement. In order to keep labor costs down employers are looking for dental plans that are more reasonable. Because of this reality we can expect to see a continuation in the number of plan changes and reduction in reimbursements. It’s a fact, PPO’s are more popular than ever and the indemnity plans appear to be going the way of the dinosaur. Charles Blair, DDS, dentistry’s expert in Insurance Coding and reimbursement, quantifies this with his findings that it’s 80% PPO plans that are being purchased as compared to only 9% indemnity. He says he has never seen a profession go through such a radical change as dentistry has in the last 12-18 months.
Many dentists are asking the question: ‘if my insurance reimbursement is cut , how will I make it, how will I compete?” In answer to that question, some say DO NOTHING, others suggest GET OUT or, there is another option to TAKE ACTION.
The down side to doing nothing is the ramification of denial. In your daily life, denial might look like patient interaction and reimbursement are exactly the same. But in reality things are changing around you. It might well be you are in the eye of the storm. For example almost two years ago, dentists in the state of Washington went through a 15% cut in Washington Dental Service (WDS) reimbursement. Today Delta Dental of California no longer accepts enrollment of new Premier providers. New dentists are limited to enrolling only as a PPO provider. These replacement PPO’s set the fee and are generally 60-70% of UCR. Along with those changes, California Dental Association recently sent members a letter stating they have reliable information that Delta Premier fees will be reduced 8-12% before year end. With this impactful news you could feel compelled to stop accepting insurance.
Certainly this would be a reasonable reaction, facing these changes, to want to get out of the insurance game. “Some dentists in the state of Washington decided to stop accepting assignment with WDS. They considered that a 15% reduction in reimbursement for a practice collecting $1 million, having 50% of the patient base in WDS meant a 35% or $75,000 drop in net income, “ reported by Chris Pickel, DDS of the Concerned DDS of Washington. With the news of a reduction, many opted out of WDS, thinking they would collect from the patient and the patient would be paid directly by the insurance. The changes were too dramatic for a practice to withstand. This decision came with a considerable loss of existing patients as well as a decrease in new patients. Needless to say many of those practices reversed the no-assignment course within six months and are still recovering two years later. With today’s practice dependency on insurance and the patient’s mindset on being financially responsible it is no longer feasible to drop insurance assignment.
So we ask ourselves how then do we take action and make insurance reimbursement reductions work within the practice. By taking a proactive approach one stands a chance of neutralizing the effect of decreasing reimbursement. In being responsive, it is helpful to use the popular business performance management system, “The Balanced Scorecard,” by Drs. Kaplan and Norton to determine how and where to take action within the business. The BSC is a tool that divides the practice as a business into four parts; 1) financial, 2) the patient/customer, 3) internal business processes, and 4) learning and growth of team members. For us, regarding taking action, the first step begins with increasing efficiency. One of the first efficiencies, in the financial arena, can be realized by reducing costs. It will be worth your efforts to reduce your supply expenses to 4-6% of your collected revenue. Manage your lab expense with CADCAM and affordable labs. Budget lower labor and benefit costs. Next, in the area of staff growth and internal business process, the time has come to make each procedure more efficient. Great gains can be reached by each team member being more adept and faster with each procedure. Besides increasing speed one may be able to reduce unnecessary steps, as well as to do each step correctly the first time thereby reducing overall time. This area of efficiency is attained by analyzing current procedures, designing a staff training program, and creating an overall plan to improve processes, delivery time and execution. Next, developing and refining step-by- step systems so that procedures are reproducible, things are completed excellently the first time, and time after time by each team member. With these measures, proficiency can be improved and time reduced. These efficiencies will minimize resource consuming redo’s and do overs. In a nutshell efficiency will be secured by creating standards and specific accountabilities, setting time efficiency expectations, and lastly measure performance. Besides being more efficient a practice will find it easier to do well by adding procedures. “It is a time to add more service offerings. Now is the time to go from delivering an average of 60 services of the “average dentist” to becoming a “decathlon dentist,” offering over 120 treatment procedures,” according to Charles Blair, DDS. By becoming more efficient and offering more many benefits will be achieved. There is more than one way to capitalize on these advantages; each practice has a pot of gold available within its reach. The questions remains how will you tap into that Pot of Gold.
Each practice owner is affected by third party payment. Again, you are in the driver’s seat asking, “As insurance reimbursement changes in my practice how will I adjust to the change? How much will it change? When will it change? How will it affect my practice?” These are all timely questions. Will you hold them and do nothing, will you fold them and get out, or will you make a proactive course correction and take advantage of the changing times? Either way it’s Game ON.
Business Trends and Reimbursements
Dr Charles Blair, Reimbursement Specialist
Kate Willeford, CPA
Fred Joyal, Futuredontics
Rita Zamora, Social Media
Ginger Bratzel, DDS
The Dental Patient Attraction Expert, is the founder of the New Patient Attraction Automation System(TM), the proven program the shows you through a precise, step-by-step process, how to get all the patients you need…your IDEAL patients. Get your FREE Audio CD by mail and receive a weekly access to marketing tips and mindset articles to grow your practice and increase your income, visit www.GingerBratzel.com.
Larry Guzzardo, Dental Consulting