Your Dental Practice Should Negotiate Insurance Fees
In the medical industry, insurance companies don’t take a one-size-fits-all approach. In fact, some dentists receive up to 10% more than others for providing the same service. Why? Because of the reimbursement amount the dentist and insurance company agreed to. And whom do you think usually gets the better deal? Spoiler alert: It’s rarely the dentist.
How much reimbursement your practice receives from insurance companies depends on your negotiation skills. Some dentists do their own negotiating while others partner with companies like ours whose expert teams handle the negotiations.
Preferred Provider Organization (PPO) plans represent over 80% of available dental plans. With the increased growth of large dental networks, PPO dental plan popularity has similarly increased because it’s more likely that someone’s preferred dentist will be in-network. Today, insurance companies are less likely or willing to negotiate fee increases.
Many years ago, dentists could call their contact, request — and get — a 5% annual increase. Alas, those days are long gone, and negotiation offers the best strategy for receiving fair, market rate compensation for your services.
Negotiating Appropriate Compensation for Your Services
If you’re buying an existing practice, the first step before negotiating higher fees is to compare your current rate with the compensation other area dentists receive. You can choose a company to conduct a fee information survey.
These surveys verify what fees other dentists in your area charge insurance companies — and arm you with the information you need to support your case during negotiation, especially if your rate is substantially lower than your competitors’ rates.
If you’re just starting, this information allows you to compare fees and compensation rates among other dentists to give you a ballpark starting figure for negotiations.
Know Your Insurance Companies
Here’s a little-known fact. While dentists are contractually obligated to provide dental services to specific insurance companies, it’s hard for dentists to know which ones. Why? Because many insurance companies contract with each other so they can share patients and fees.
So what does this scenario mean for you? If you’ve signed an agreement with one company, have you read the fine print to see whether you’ve also agreed to work with a network of other insurance companies connected to the original company you negotiated with? Confusing, isn’t it?!
The Dreaded Fee Increase Negotiation
It takes time to negotiate payment fee increases and what feels like an endless supply of patience. Most dentists lack the training and expertise to navigate the process. If you’re not keen on spending hours conducting due diligence and spending hours on the phone and dealing with the headache and hassle, you can hire a company to negotiate on your behalf.
Because these companies have teams of professional negotiators — and typically represent many dental offices — they have a significant advantage (and valuable information) to use during negotiations.
Think of it like this. Many people could opt to change their car’s oil. You-Tube has hundreds of how-to videos walking you through the steps. But the process could take a lot longer, because you might not have the equipment, like ramps or a lift, to make the job easier. Yes, you’ll get the job done eventually. But what if you forget to secure the drip pan or double-check that you replaced the filter? Even though it’s more expensive, it’s easier to take your car to the garage and have the experts do it — especially since today’s cars are much more complex than cars of 5 or 10 years ago.
Don’t Sell Yourself Short
Your practice provides an important, necessary service. You want to be competitive and fair with your pricing, and you deserve fair, appropriate compensation for those services. Few insurance companies — or even dental practices — would willingly share their fee schedules if you ask. But when you partner with a company to negotiate on your behalf, their teams research and survey dental service fees paid in your area. This data gives you the insight to know if it’s time to negotiate a fee increase and a ballpark range for how much.
Another benefit to securing sufficient compensation? Your dental clinic is a business requiring ongoing investment in its people and equipment. Of course, you want to provide high-quality care and position yourself as an asset to your community and the people you serve. Thus, the level of compensation you receive becomes even more critical.
Some dentists opt for cash-only models, but that strategy can affect your patient numbers because not everyone can afford to pay for dental care out of pocket. If, however, your reimbursement plan is too low, you’ll have to cut corners to save costs — and that approach can lead to an inability to provide the level of service your patients expect.
Myth: You Can’t Negotiate Reimbursement Fees
Wrong! And yet many dentists still believe this fallacy. While it’s a challenge and requires persistence, insurance companies will negotiate. Start by reviewing your current contract. It will tell you how and when to request a fee increase.
You can send a letter to the insurance company’s practice relations department requesting a fee increase. Include your practice’s fee schedule and a deadline by which to respond. If the company ignores your request or refuses to negotiate, hire a professional.
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Insurance companies are in business to make money — but it shouldn’t be at your expense. Some companies use stall tactics to delay fee increases. And insurance companies will never voluntarily reach out to a dentist to offer an increase. Those reimbursement increases only happen when the dentist takes the initiative. Learn more about how MDent Consulting can help you.