Episode 102: What are the Consequences of Staying In-Network with PPO Plans?

Naren:

This is the Less Insurance Dependence podcast with my good friend Gary Takacs and myself, Naren Arulrajah.

Gary:

We appreciate your listenership, we appreciate your time and most of all we appreciate your intention to reduce insurance dependency in your practice. Our goal is to provide information to you that will allow you to successfully reduce insurance dependency and convert your practice into a thriving and profitable dental practice that provides you with personal professional and financial satisfaction. Welcome to another episode of the Less Insurance Dependence podcast, I am Gary Takacs your podcast cohost and I am very excited about bringing a topic to you that I know you are going to benefit from and the topic is what are the Consequences for Staying in Network with PPO Plans? Hey before we get tot to that episode though a quick announcement about our September thriving dentist MBA live stream workshop and man we had a great time on that you know that MBA workshop is all about the 10 elements of a thriving practice – it is an 8 hour course and during that 8 hour course I go through all of the 10 elements in detail it actually is a true workshop we have 11 workshop exercises throughout the day the exercises are all about helping you apply the information that you are learning we also have a 64 page workshop workbook to support you in applying this information and apply it in your practice – so they come join us in October we have another live stream format it is October 23rd and 24th that is a Friday Saturday, and you can find that we will put a link in the show notes just click on that link and it’ll take you right to the landing page where you could learn more about that October one day thriving dentist MBA live stream workshop – we have got some very attractive pricing, we have got some early bird pricing available for you. I will give you a heads up our workshops have been selling out we limit attendance because of the workshop format and they have been selling out if tickets are still available you can see that on the website and you can see some very attractive pricing. Hope to see you join us in the October one day thriving dentist MBA live stream workshop.

Naren:

Hello everyone this is Naren your cohost of the less insurance podcast show – I am excited to talk about today’s topic but before we jump in I just want to kind of give you the back story as to how you know we picked this topic recently Gary did a book club for his coaching clients and he discussed case presentation – a book on case presentation by none other than Doctor Frank Spear. It is an amazing book and everyone who was part of this book club conversation loved all the insights and the lessons Garry shared, and one of the things that stood out to us was what frank taught or talked about in this book – he makes it a point to talk to potential patients, the consequences of not doing anything and that kind of gave us an idea – many many many people even though thy know that they might be writing off hundreds or thousands of dollars in PPO write offs – still choose to stay in network. So we thought why not talk about the consequences of staying in network with PPO plans today – Garry does that sound good to you?

Gary:

Yeah let’s recognize Naren possible choice is to stay in network – in fact I might even go far s to say that that is the popular choice –

Naren:

Right

Gary:

That is what the vast vast vast majority of dentists will do however this choice has consequences and as you framed it so well – the book that we did in book club written by doctor Frank Spear – I love the way frank introduced the concept of always let your patient know in an informative way not a scary way – in an informative way what are the consequences of not doing any treatment. you know Naren I remember when Paul learnt that concept – he took a workshop from spear education and that was one of the core elements of this particular workshop and I remember when Paul applied it in our practice we were a solo dentist at that time and I remember when Paul applied it – and it was quite literally a break through when you present that for example Naren – I want to share this because I know our listeners can benefit from it. Let’s say our patient has old amalgam fillings – a mouth full of old amalgam fillings that might have been placed 25 or 30 years ago – maybe when they were a young adult when these old amalgam fillings were placed and the doctor can clearly see that they are breaking down but the one problem is nothing hurts and now what do some people think when nothing hurts?

Naren:

Those things are fine

Gary:

I don’t need to do anything! And as Frank would do that with a patient I would say something like you know Naren you might be wondering why do I need to do anything about this when nothing hurts and so I wanted to share with you what are the possible consequences of not replacing these amalgam fillings – well one possibility is because of the fillings now decay can get underneath those filings and cause more decay. Decay never solves itself – it only gets worse and if you wait till it hurts that decay maybe much greater than it is now – and we may need to do more aggressive treatment like a root canal and crown if we wait. If we can treat it now –we can treat it more conservatively and save more tooth structure and maybe save something a lot more complicated in the future I just wanted you to know what the possible consequence of not doing anything whatsoever

Naren:

That is a great tip Garry thank you for sharing it.

Gary:

So hey let’s talk about the consequences of sating in network because it is a choice – you don’t have to go out of network. However there are consequences to that choice – let talk in my mind there’s many many many consequences however I have thought of 5. Let me go through those – I’ll number them one through 5. number 1 – your practice overhead will continue to go up – because dental insurance companies will reduce your PPO fees even more so in the future now Naren I made that statement pretty badly – they will be lowering your contracted fees, now we can I say that so confidently Naren?

Naren:

Because they have done

Gary:

Because they have done it may times before!

Naren:

Exactly

Gary:

And that’s what they do yeah it happened recently in Arizona it happened recently as December – December of last year – they send a certified letter out all Arizona contracted providers with Delta and they just unilaterally said hey due to pressure from our clients – we are cutting your fees 15% – now notice the languor they used in the letter – due to pressure from our clients we have no choice but to reduce the reimbursement you have received so who’s the client?

Naren:

The employer not the dentist

Gary:

The employer – not the paint not the dentist – it is the employer. So it is safe to say that I have seen this go on throughout my career that they have reduced the fees that they are paying – right. Not paying more. As they reduce the fees and think about what is happening – as they lower the fees they are saying you and as your overhead goes up – for example right now because of PPE expenses and other expenses as your cost go up and your income goes down – it creates an ever widening gap and having the effect of increasing your overheads and decreasing your profitability even further as if it isn’t bad enough already –

Naren:

Right – Can I share a resource Garry?

Gary:

Please

Naren:

I know you and I did a math exercise not too long ago and we looked at a practice doing collecting a million dollars and 80% of that money will be coming from PPO patients and we discovered that particular practice was writing off half a million dollars in PPO adjustments every single year – so what you are saying I – if you don’t do this they would end up writing off let’s say hundreds of thousands – in this case half a million dollars year after year, and is it okay for us to add that resource – that PPO resource?

Gary:

The resource why we created that resource for our listener’s benefit Naren is that – many dentists don’t know what their insurance adjustment is

Naren:

Right

Gary:

They don’t know and they don’t know because they have entered in their fees schedule – they have entered their contracted fees – 90% of dentist in the US enter their contracted fees in their dental practice management software – so we want to create a quick way to estimate and our estimation is accurate to plus or minus 2 percent so pretty darn accurate – and we’ll put it and I think we will call it our insurance adjustment calculator? I think it’s called the PPO write off?

Naren:

The PPO write off calculator

Gary:

The PPO writes off calculator – we will put a link in the show notes. If you don’t know what your insurance The PPO write off calculator write offs are the calculator will help you determine it with a ninety eight percent degree of accuracy. Okay so that is the consequence number one – is your overheads are going to keep going up. Consequence number 2 – you will remain dependent on the fact that the majority of your new paints will come from the dental insurance companies. Practices that are PPO practices – majority of their patients come from the insurance companies and if you stay in network that is going to be a cycle that just keeps continuing you know Naren in social circles there is a lot of discussion about cycles of poverty.

Gary:

If you are born into a poverty situation, and perhaps you live in a city that is experiencing your deceased and decades of poverty it is kind of hard to break that pattern – to break out of that pattern – and I think the same thing can happen here if all the new patients you get only come from the insurance companies you are stuck in that pattern – and that is another consequence that you will experience if you stay in network. Number 3 – you will continue to experience fruition with your patients who will only wan treatment done that is covered by their insurance, this causes a lot of dentists frustration Naren – they know they can help the patients the know they have the skillset we have the technology we have the treatment predictability where we know we can help someone but the patient will only want – the only criteria they care about is –doctor is this converted by insurance, f the answer is yes – then they say let’s do it – if the answer is no then they say – no I am not interested and that causes such a I think – a frustration on the part of dentists knowing you can help some but in fact being limited by this crazy insurance plan.

Naren:

I remember the story shared with e when you purchased your prates – you know the shaggy carpets and you know pretty much and it is all infected with 33 insurance plans.

Gary:

34

Naren:

And I guess at some point the dentist jut gives up and does what the people want which is what covered insurance is – he doesn’t try to do the right kind of dentistry he doesn’t have the money to invest in his practice – he just gives up.

Gary:

It’s a cycle that just perpetuates that just keeps going – which kind of leads me to the 4th consequence, if you continue to stay in network you will have a challenge growing the high value services component of your practice – you know for us high value services are things like – placing and replacing implants, adult orthodontics, cosmetic dentistry, complex restorative dentistry, oral conscious sedation – those are things that are typically aren’t covered by insurance. When you have patients that only want to have things covered by insurance do you think you are going to get to do much of those high value services? No. you know they are not interested in those – now you have the skill set you have invested time and money in your continued education – maybe even invested in technology to be able to do XYZ service – and now your audience is not receptive.

Naren:

Let me understand this Garry – so you are saying you have a challenge growing in the high value service component of your practice – is it because you have an audience that is not receptive or is it because you have said no so many times.

Gary:

Yes you don’t even bother asking anymore. Well it could be both – if you hear not enough at a subconscious level you quit presenting it. Because you anticipate the no and this happens subconsciously. It’s not conscious – doctors don’t consciously say jeez I have heard no to adult ortho a hundred times I am not going to present – they don’t process it in a conscious way that way

Naren:

Right

Gary:

However at a subconscious level if you keep banging your head against the wall – pretty soon you will figure out I am not going to bang my had against the wall anymore and you sort of just resign.

Naren:

Right

Gary:

Resign to just to the everyday drill stuff, because that is just what the insurance part is – but I actually think it the answer is another level as well and that is if you have an audience that is only interested in what is covered by insurance – then you are not going o have a lot of success presenting into that audience because they are not interested.

Naren:

It’s like if somebody is at McDonalds you can’t present them a steak meal for 50 bucks – just

Gary:

Right? Because that is not why I am here!

Naren:

Exactly –

Gary:

Hey! If that is what I wanted you know I would go to the restaurant the high ends I would go to the Chris which is in the other part of town

Naren:

Right

Gary:

You’re right

Naren:

Exactly

Gary:

That’s why McDonalds doesn’t have a 50 dollar fillet entre – you know it doesn’t. leads me to consequence number 5, and this one is very timely for us to talk about right now if you continue to stay in network with the PPO plans your practice will likely be very very vulnerable to the crisis. Now I am not a fear monger in fact I am the opposite *laughs* I am very much an optimist, however one thing I can safely say based on history is that the current crisis we are still experiencing – the Corona virus crisis is not the last crisis any of our listeners are going to face in their career – not at all

Naren:

Right

Gary:

There will be I mean – al we have to do, let’s just go back 20 years and I can name two other crisis – the 07 08 which we now call the great recession and the 9/11 recession that happened after 9/11 and that just happened in the last 20 years

Naren:

Yeah

Gary:

And that just happened in the last 20 – and if we go even further back I can name 4 other crisis you know that cropped up now I certainly hope we don’t experience another virus crisis like we have with the corona virus now I would hope that, but I think it is very safe to say that we are not done navigating crisis in your career doctor is that safe to say Naren?

Naren:

Absolutely Garry I mean every ten years or so we tend to have some kind of a major major shock.

Gary:

Something! You know something crops up and you know when you look at the offices that we were all affected by corona virus – there is no denial we are all affected by it, but when you look at the offices that were biter positioned to deal with it they had lower overhead higher profitability higher practice reserves in other words money in the practice account to deal with a rainy day – they had higher personal reserves, they had money in personal savings accounts to deal with crisis

Naren:

Right

Gary:

and those practices and those doctors navigated the corona virus crisis much biter than those that were on the other end the opposite end those that had higher overhead, lower profit as a result of higher overhead and lower profit they had less money in their practice bank account to deal with a rainy day they had less money in their personal bank account as an emergency fund and the single most significant factor is lowering your profitability is that 42 to 44% you are writing off by participant gin PPO plans – that is the single largest contributor to your high overhead and your low profitability so Naren there is 5 consequences so I just want you to be informed and want you to have all the information in hand so you can make informed decision with proper information so let me recap – 5 consequences of continuing to stay in network or PPO plans – number one your practice overhead will continue to go up because dental insurance companies will reduce future PPO fees – number 2 you remain dependent on the fact that majority of your new patients will com o you from the insurance company hence the cycle jus continues, the cycle just perpetuates – number 3 you will continue to experience frustration who will continue to want services covered by their insurance treatment plan . Number 4 as a result of that you will have a challenge of high value services that you love to do and you like to do more of – you are kind of hitting a brick wall with your patients and you will have trouble growing that component of your practice and number 5 sadly your practice will likely be very vulnerable to the next crisis like it was in this crisis. So what is the solution to all of this Naren? The solution is to go through all of your preparedness – get ready to successfully go out of network and then step by step by step start to successfully resign from these PPO plans – Naren much of the plan of how to do it successfully is found in past episodes of the les insurance podcast – and also a sled promotion – if you are interested in coaching to help you with it, that is one of the core elements that we cover in our coaching services as well veritably welcome the opportunity to work with you doctor to he you successfully reduce your insurance dependence but I would start by perhaps binge listening to some episodes of the less insurance dependence podcast and just know that if you would like some specific coaching and guidance on that we would love to help you with this in our coaching program.

Naren:

Thanks you so much for everything you do we can’t do this without you we love that you share this with your friends and that you write your views for us and also another extra bonus– of you haven’t checked out thriving dentist. Com Garry has done 400 and fifty episodes- he is the podcast Godfather – he is the first one to do podcasts in dentistry – so you can go back and binge listen and we will put a link to the thriving dentist show so you can go and binge listen to all those episodes. Thank you for your time and we really appreciate you and everything you do for us.