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Dropping a Low Paying PPO Plan and Limiting the Damage

In the January 15th Newsletter, we summarized how to best negotiate higher PPO reimbursements based on Bill Rossi’s lecture at our Scottsdale, AZ seminar in late December.  What follows is Bill’s advice for dropping a PPO plan and limiting the fallout.  Dropping a plan is a serious business decision and demands careful consideration.  This is not an ideal topic for this Newsletter, as the short format of the Newsletter items doesn’t adequately capture the nuances involved.  With that said, here are some recommendations:Don’t drop a plan out of anger.  Do it rationally.  Before dropping, always try to renegotiate.Ironically, dentists with the most PPO participation (usually 5 or more) are the ones least inclined to drop even though they are in the best position to do so.  It’s not unusual to see these dentists collecting less than 75% of what they produce. If this applies to you, it is time to start peeling off some of them.You don’t necessarily start with dropping the PPOs with the lowest fee schedule.  That is a major factor, but the ideal PPO to drop represents a small portion of your patient base (say 10% or less) and has decent out of network benefits.  The process of dropping this smaller PPO is going to be a “dress rehearsal” for the bigger ones you may later decide to drop.When giving your notice to leave network participation, always be polite and leave the door open for the PPO to pay you more. Sometimes, if they didn’t negotiate earlier, they will now.  In any case, keep the communications professional and positive.Ask them to send written confirmation to you confirming the date of the transition. Before the transition date, do not start telling patients.  Do not send letters!  These letters often aren’t fully understood and can sound sanctimonious.  Instead, train your staff to deal with patients both face-to-face and over the phone.  They have to know how to tactfully address both old and new patients about your participation as “out-of-network providers.”  There are many nuances to this that go beyond what we can discuss here.  It’s best to get professional help through this process.Be supportive of your staff.  The more confident they are, the more calmly they will deal with this transition with patients and the better the patients will accept the change.  Keep in mind that’s it’s very likely you’re already seeing patients from various PPOs on an out-of-network basis.  Patients are generally more loyal than you think.   Very few offices will be completely out of PPO participation.  The goal is to find the right balance.It is also very important that you have a plan to fortify your practice.  That is, you can’t just drop the PPO and do nothing else.  You want to build up the practice through advertising, adding services, and tuning up your systems.The bottom line: If you handle things right, chances are you’ll lose the discounts and you’ll keep the majority of the patients in any given plan.  There are substantial risks and rewards in leaving a PPO.  However, it’s probably easier and less risky than you think it is. There are few decisions that you can make that will add more to your bottom line, not just this year, but for years to come.  You can’t “outrun” the discounts forever.Massachusetts Dentists:  Before you sign up with the “New” Delta, or drop Delta altogether, it is very important to discuss the nuances of these decisions.  Collier subscribers can call Bill Rossi at (952) 921-3360 if you’d like to discuss this and get the “inside baseball” analysis of what’s happening.