February 10, 2021 | Podcast
Dentists could potentially save tens of thousands of dollars each year just by mastering the complex world of dental insurance. For dentists who are currently contracted with Preferred Provider Organizations (PPOs) or are thinking about starting to go in-network with PPOs, or want to reduce their dependency on PPOs, there can be a lot of intricacies to navigate. It’s important to learn which PPO plans to participate in and how to maximize insurance reimbursements to increase revenues in your dental practice.
In this episode of The Art of Dental Finance and Management podcast, Art meets with Clint Johnson of Profitable PPOs to help dentists navigate the complex web of dental insurance plans and tells them how to make the best decisions on which PPO plans to participate in. Some considerations for dentists include:
Reach out to Art if you have any questions regarding dental finance and management for your dental practice. More information about the Eide Bailly dental team can be found at www.eidebailly.com/dentist.
Are you looking for other ways to increase profitability in your dental practice? Let’s talk.
Art Wiederman, CPA And hello, everyone, and welcome to another edition of the Art of Dental Finance and Management with Art Wiederman, CPA. I am your host, Art Wiederman, and it's a pleasure to have you on our podcast today. And as I tell you, every week, we are pretty much date stamping all of these to try and keep you up to date on what's going on with all of the government financing programs. And I'm going to give you a short update on that today.
But I have a very special guest that I'm talking to, a very good friend of mine. And as I've told you, in 36 years in dentistry, I have lots of friends and people that serve the dental profession well, and I only bring the best of the best on. And today, my friend Clint Johnson from Profitable PPOs is my guest. And he was actually the second or third I don't remember the second or third podcast I did back in seems like forever ago, over one hundred podcasts ago in 2019. And Clint spends every day of his life helping dentists all over the country to maximize their utilization and their involvement in PPOs in being in network and plans how to get in plans, how to get out of plans. How do you play the game of the insurance companies? That's what we do. And he is an absolute master. So we're going to spend a good chunk of the hour talking about that.
But I do want to share with you some information before we get started and then an update on all these government programs. So first of all, please go to our partner, Decisions in Dentistry magazine, which is www.DecisionsinDentistry.com. Decisions in Dentistry is one of the best clinical magazines in the country for dentists. They have been on the cutting edge of all the COVID-19 issues, vaccinations, treatments, et cetera, as it involves the dental profession, you can find our podcast on there. Go look at their clinical content there. Great continuing education courses. They have one hundred and forty courses that you can purchase for a very reasonable price. And again, that's at DecisionsinDentistry.com.
Also, folks, with all the stuff going on, if you are not working with a dental specific CPA and I've gotten a lot of calls and here's the call. The call is, well, you know what? I'm trying to get this PPP loan. And I've heard about this Employee Retention Tax Credit. And my CPA doesn't know anything about it. And then the HHS and I go, yeah, because unfortunately, we at our Academy of Dental CPAs and we at Eide Bailly. And by the way, I am a dental director at the CPA firm of Eide Bailly. That's E i d e B a i l l y. We've been living this nightmare now for 10 months. So if you're not working with a dental specific CPA, I'm in Southern California, please go on to our website of our academy, which is www.adcpa.org, and look for a member in your area. Or you can go ahead and email me at awiederman@EideBailly.com. And my cell number is 657.279.3243. That's not my cell. That's my office number. I'm sorry.
So let me give you the update, folks, on what's going on with the alphabet soup. We'll call it. OK, so let's start with PPP. Round two of PPP is out. All the banks are pretty much up and running. Many of my clients have already received their round two loans. You're going to use the greater of your 2019 or 2020 payroll and you're going to go ahead and apply. You can apply for a round two loan if you applied for round one loan, if you've used all the money, which most all of you have, and if you used it for the intended purposes, in other words you didn't use it to buy a Rolex or pay child support. And I come up with those because that was in the newspaper. There are people that have done that and those people are going to go to prison, unfortunately. So we don't want you to do that. So if you've used it for the intended purposes, go ahead and apply. It's going to be pretty much the same amount of money as you got the first round. And the rules are pretty much the same.
Now, I will also tell you that you can also file for forgiveness. The one hundred and fifty thousand dollar or less simplified forgiveness form is out. However, if you had a greater than 50 percent reduction in your revenues, probably in the second quarter of 2020 as compared to 2019, or if your dental office was shut down, either in whole or in part by a government order or mandate, do not file for forgiveness. Do not pass go do not collect two hundred dollars. Don't do it. Wait until the government comes out with regulations because you can now very high level. You can now get a hundred percent forgiveness if you met the rules and potentially a five thousand dollar per employee tax credit called the Employee Retention Tax Credit. You can get this credit for the if you meet the rules second and third quarter of 2020.
And we at Eide Bailly and the ADCPA are working on a very sophisticated spreadsheet to make that happen for our doctors. So don't file for forgiveness. There's no rush. If you file for forgiveness and you put all the information down, you can't use those wages for the ITC, the RTC and finally, the HHS. The end of the alphabet soup, the Department of Health and Human Services Provider Relief Fund money. The portal is open. You can register. They will be delaying the date to report until after February 15th. They're not even ready yet. So it'll probably be March 15th or April 15th. We'll report to you on that. In fact, when that portal opens up, we will probably do a separate podcast on that with one of our partners from Eide Bailly.
OK, enough of that. I'm getting tired of talking about this stuff, folks. I want to talk about football. The Super Bowl is this weekend. We're recording on February the 4th, the Super Bowl. And then there's basketball and there's golf. And there's more fun stuff that we all want to deal with. But today we're going to hopefully help your bottom line or maybe your top line. So my friend Clint Johnson is the president and founder of Profitable PPOs. He works out of Phenix, Arizona, Clint has been in the business, I'll let him tell you a little bit about his background for well over 20 years. And the bottom line is Clint is a master of how the whole system with PPOs and dental offices works. So my good friend Clint Johnson, welcome to the Art of Dental Finance and Management.
Clint Johnson Thanks so much. It's great to be here. And I'm glad that you're looking out for all these doctors, because that gave me a headache just hearing about all the government programs and HHS and PPP. So thank goodness for you and the other members of the ADCPA looking out for these docs.
Art Wiederman, CPA Well, you're very kind. And actually what you want to do, everybody, is you actually want to buy stock in companies like that manufacture Bayer and Ibuprofen because we are all absolutely having headaches. One of the one of the other things I didn't even mention is the fact that now these banks who are taking the round two they should just be using the round one information, but they're requiring so much more information and driving the dentists and the CPAs absolutely crazy. We've actually reported that to our friends at ADA and SBA because it's just not fair. So but that's not what we're talking about today. We're going to save these guys some money. We're going to get higher reimbursements. We're going to make sure that they're doing the right thing when working with PPOs. So, Clint, before we get started, let's tell everybody a little bit about your journey and in your career path.
Clint Johnson Sure, sure. Happy to do so. You know, I've had the pleasure of working with dentists on a full time basis since the late 90s. And it's sort of been a love hate relationship in terms of where I've seen dentistry go lately with PPOs. But looking backwards real quickly, I was fortunate enough to grow up around a lot of dentists. My father was a dentist. My grandfather was a dentist. My great grandfather was a dentist. I had seen a lot of dentistry over the years. And I grew up reading the book of Elly Pinky, as a matter of fact for fun it seemed like.
But since the 90s I have been fortunate enough to work with doctors across the country, been in hundreds and hundreds of practices and now having focused exclusively on PPOs for nearly a decade, we're in the fortunate position of working with hundreds of practices nationwide each month to help them improve their reimbursement with PPOs to eliminate PPOs when appropriate, and also to avoid some of the common and costly errors that happen when working with PPOs.
Art Wiederman, CPA Well, you're going to tell everybody exactly how to do all that in the next hour or so. Let's start off what's happening in the marketplace now. We're in a pandemic. I mean, insurance companies are I've seen a maybe they're backing off a little bit, trying to be more user friendly and kinder to dentists. Maybe you agree. Maybe you don't. But what's happening, you know, in the marketplace now with insurance companies and PPOs.
Clint Johnson Sure. There's a few things that I would say are happening. One of the very notable things is that because of the pandemic, a lot of insurance companies have got employees, team members working from home or have reduced their staffs. And so one of the direct results of that is that for a doctor who's joining an insurance PPO at this point, they're credentialing time is being extended much, much longer than the normal. As an example, it's not uncommon at this point. Instead of having a 90 day credentialing timeline to be one hundred and eighty days to get into the same network, we've got doctors depending upon where they are in the United States who are six to eight months before they can get credentialed with Delta or coming up on a year for other doctors who might be joining Blue Cross.
Now, it's not that way for every state. But many insurance companies tell us they're just very short staffed. And that's leading to significant delays for doctors who are starting a practice or buying a practice. That's something to be aware of when it comes time to start thinking about what insurance is they're going to credential with.
Art Wiederman, CPA I was just going to say, because, again, we see this in in dental practices when our buyers buy dental practices, a lot of times what will happen is, is they will use the sellers, you know, credentialing in number and, you know, for, like you say, 60 to 90 days. And most of the insurance companies understand that. But now you're saying it's six to nine months maybe. So what are these people that are buying practices? What do you tell them?
Clint Johnson Well, it really is a quandary because utilization of the seller's information is not really what the ADA is comfortable with based upon what we've been told and certainly the insurance companies are not. And so what ends up happening is doctors will often be out of network for a significant amount of time. And it really requires that they work closely with their front desk team on how they're going to manage that and what they're going to say to those patients and often communicating to them that, hey, we're not in network yet, but we intend to be. And in this process, we're still going to honor the seller’s fees. And that way, you as a patient aren't paying any more to see the new doctor who's not yet credentialed than you would have if you had seen the seller who's now retired or something like that, and working closely with them.
Because what we certainly want to avoid are situations where a doctor has gotten a loan for a significant amount of money to buy that practice. And then their first visit with the patient is significantly different and the patient is paying significantly more out of pocket than what they're used to because the doctors, you know, who's buying and practice, they're largely buying access to an income stream and access to a group of patients there. And so a doctor buying a practice needs to be very careful to have a plan in place to make sure that that first and second visit, while credentialing has not been completed, is as close to what the patient is used to as possible, therefore, keeping the retention level of those patients very, very high.
Art Wiederman, CPA Now, I'm not obviously I'm not an attorney, but I don't know, there's nothing wrong. If, you know, if Dr. X was contracted with X, Y, Z insurance and they're doing a prophy and their usual customary fee was 100 dollars. And their contracted fee for the seller beforehand is maybe seventy five dollars. Is there anything that says that the buying doctor right out of the gate can't charge 75 dollars for those patients for a cleaning?
Clint Johnson No a doctor is able to move their fees around as appropriate, meaning so long as it's disclosed to the insurance company. There are sections on the insurance claim form where a doctor is able to notify a insurance company if there is going to be a different fee than the normal charge. And depending upon your state, some doctors don't even need to do that as an out of network provider. They can use whatever fee they would like. So it does vary a bit from state to state. But yes, a doctor is able to do that just depending upon whether they're in one of those states where they need to notify the insurance company or whether they're not.
Art Wiederman, CPA OK, so let's talk about some common mistakes that offices make. And I've seen them. And you live with them on a daily basis, I would assume. So what are some of the biggest mistakes that you're seeing offices making that hurt their reimbursements or hurt their bottom lines?
Clint Johnson Well, it could actually turn into that. Yes, but we'll spare everybody the gruesome details. But so one of the most common mistakes Art is that doctors are not clear when they're signing up for a PPO who they're signing up for. Now, that sounds strange, but follow me here for a second, because in dentistry, what has happened is a lot of insurance plans have linked up with others. And so what we see on a regular basis is a doctor will join insurance company A and doesn't realize that insurance company A has a relationship with B, C and D. So therefore, a doctor signing a single PPO contract may get pulled into four networks or five or depending upon the PPO, as many as 20 different networks.
Now, the challenge with that is a doctor, when signing up may say, well, I'm fine taking to PPO adjustment on this small group of patients. However, that can change dramatically when we say, well, it's going to impact insurance company B, C, D and E, and here's how much revenue that would impact. So a lot of doctors, if they're not working with a professional, are signing up for insurance companies without finding out who else that insurance companies linked with, and therefore they're getting stuck into many additional PPOs.
Art Wiederman, CPA So that means that they might have access to more patients, but those other insurance companies might have significantly lower reimbursements than the one that you thought you signed up with, right?
Clint Johnson Well, they would ultimately be sharing the same PPO fee platform. So let's take the example of an insurance company that's got a horrible fee schedule, but the doctor says, I'll take that because there is a large employer next to me and I'll just deal with that large fee schedule or that large insurance company. Because they have this one employer, but if that employer I'm sorry, if that insurance company has a bad fee schedule, that bad fee schedule is like an infection that spreads out to seven or eight other insurances.
Art Wiederman, CPA I got it. Yeah. So and that's something that in your work, you know, we called I think you taught me this term we call them trains, right. Kind of.
Clint Johnson With those trains, they're just like a train it's there's one engine that's driving it, meaning the plan that you've signed the agreement with but linked up to that, that train engine, so to speak, or subsequent linked PPO networks. And if I were to use the example of a United Concordia, if a doctor were to join that particular plan, there's 18 or 19 linked networks that are associated with that. And so signing that singular agreement with United Concordia or and this applies to many different plans, you're going to get a whole lot of other PPOs using that fee schedule.
So in that example, were you to sign up with Concordia and they have bad fees, you're now allowing 18 or 19 other insurance companies to use those same bad fees. So that would be one of the really common errors that that we're seeing doctors make is not knowing the ramifications of what plans will be linked to any fee schedule that they're signing up with.
Art Wiederman, CPA And I'm assuming that when they either call the company to discuss signing up with them, nobody is explaining this to them. Right?
Clint Johnson Well, unfortunately, you're correct. And very few companies are willing to volunteer that information so that the positive thing here is that this has come to the attention of numerous states and, of course, the American Dental Association. And we're now starting to see some movement with some state laws being passed saying that a doctor, when signing up for an insurance PPO, if that PPO is linked to others, that needs to be disclosed to the doctor. So that's a trend that I would really well, that's it. That's happened a few times. And I would really like to see a trend so that doctors know when they sign up for a plan, who else is linked. Otherwise, the doctor needs to really question the insurance company or the recruiting company and say, who else are you linked with? Or they need to work with a professional who knows those things.
Art Wiederman, CPA But if and again, just so I understand, if the fee schedule is the same with all these, like you mentioned, United Concordia, the 17 or 18 other companies. Does it really why does it matter what is the bad thing for the doctors?
Clint Johnson Yeah, so let's say a doctor has a thousand dollar normal crown fee and they decide to sign up for United Concordia at six hundred and fifty dollars on a crown. And they're willing to do that because there's one employer who has United Concordia that they want to be a network with. However, what the doctor doesn't realize is 17 or 18 other totally different insurance companies can now use that six hundred and fifty dollar crown. Whereas if the doctor had done their homework instead of participating with one of those linked networks at six hundred and fifty dollars on a crown, they could have gone directly to that insurance company and signed an agreement for maybe eight hundred and fifty or nine hundred. And so they're shorting themselves. They're essentially allowing one fee schedule to spread out among 18, 20 different insurance companies when they could have gotten a lot of those other insurance companies to pay a higher reimbursement through a direct contract instead of a linked contract.
Art Wiederman, CPA Interesting. And then I guess the other thing is, if you have private pay patients where you're not in network, a bunch of your patients could now come and say, oh, gee, I guess you now take my insurance. So instead of getting the thousand dollars, you're getting the 650, right?
Clint Johnson Correct. And when we're looking at a PPO for a doctor to join. We and any doctor who's considering it really needs to run the numbers and say, what's the financial impact? So just continuing that Concordia example, we would run the numbers and encourage any doctor to do so, to say, all right, if we take this bad fee schedule, what's the financial ramification now beyond that? What's the financial ramification going to be on each one of these other linked companies that Concordia's has a relationship with? And suddenly what may have looked like a eight or ten thousand dollar a year cost to participate, if we were just looking at Concordia patients now, maybe 80 or 90 thousand, when we look at the rest of the insurance companies that are linked with Concordia.
Art Wiederman, CPA Yeah, yeah. And the patients that have the insurance. Wow. OK. So let's talk about these PPO agreements. You mentioned these agreements. I'm sure the print is very clear and very concise and very understandable. Kind of like Go Dog Go Dr. Seuss book, right?
Clint Johnson Absolutely. They want this to be they want this to be very easy to understand. And if you believe that, then I'm happy to sell you a bridge here in Arizona.
Art Wiederman, CPA I think you do have one, don't you? Anyway, so you've told me before that the fees can vary up to 30 percent on the same plans. How does that work?
Clint Johnson Oh, yeah, that's a pretty common thing. And there's probably three ways that I would point out. The first would be that some insurance companies have different levels of fee schedules and they're going to start off by offering a doctor the lowest level. And so if a doctor were to reach out to an insurance company and say, hey, I'm interested, I'm a new doctor or I'm an established practice and thinking about joining send me a proposal, well, frequently the insurance company is going to send you to the worst and they're not going to send you the best and final fee schedule.
And the difference between that first fee schedule and the best may be twenty five or thirty percent. So we would encourage any doctor who's exploring joining PPOs on their own to go into it with the mindset that they're not going to take that first offer. And to negotiate with the insurance companies. Now, some will and some will not, but from a approach perspective approach it as if you're going to request several revisions to that contract from the fee perspective so that that would be one thing. Those variances can be absolutely astronomical. I mean, we're talking the difference we will often see offers of low seven hundreds on a crown and after saying, well, no, that's not good enough, they may end up eight hundred and seventy or eight hundred and eighty just for asking for an alternate fee schedule.
So that would be one way. The second thing to understand when it comes to fees that are associated with PPOs is that a lot of PPOs have different levels or what we would call tiers. And so a lot of doctors are probably familiar with Delta and how they have a premier tier and a PPO tier, and the reimbursement level is significantly different. And so it is a smart play for a doctor to ask if that insurance company has a tiered system and if so, to provide a proposal for both fee levels or multiple fee levels. Somebody like Anthem has three levels, let's say. To get a proposal for each one of those three levels and then to do your due diligence, to talk with your front desk, where to look at the large employers and find out what they're offering.
Meaning in my backyard. Seventy seven percent of the policy holders of a certain insurance company have the high fee plan, but if a doctor just reaches out to that insurance company and says, hey, I'd like an offer, the insurance company is going to send them an offer based upon participating at the lowest fee schedule, meaning the insurance company will send you a fee schedule that would allow you to be in network for 100 percent of the patients. But 77 percent of those patients would have been eligible for a much higher fee schedule.
So if you're a doctor looking to join, ask them if they have a tiered network, ask them for proposals on fees at both levels and ask them if they can disclose and some can, but ask them to disclose what percentage of patients have each of the levels. So if I were, if you were a doctor, I would say, doctor Art, would you rather be in network for 100 percent of the patients at bad fees or seventy five percent at great fees?
Well, you're smart enough with math as a CPA to know that you would probably make a much better profit making dramatically better fees on seventy five percent than bad fees on one hundred percent.
Art Wiederman, CPA Yeah, absolutely. So if someone comes to you and says, hey, I'm opening an office and I want to take PPOs, I mean, do you actually get on the phone with the insurance company and do the negotiating or is that something the doctor has to do?
Clint Johnson Yeah, that's something that we take care of, because, frankly, most of the doctors don't have the expertise, the time nor the interest to do it. And a lot of doctors are busy assembling a staff and overseeing the construction and picking out of equipment. So, yes, if the doctor wants help starting a practice, then that's absolutely something we help with. Everything from helping them establish their initial fee schedule, meeting their standard UCR schedules, to going out, negotiating with the insurance companies, handling the credentialing, figuring out which of the networks are appropriate, which have tiered networks that are available, what percentage of patients have the high and the low fee plans. We handle that for them because in all honesty, very few doctor make a habit out of studying dental insurance.
Art Wiederman, CPA Oh, my God, no, you have to be a specialist. And then, you know, the other thing I'm thinking about is the fact that there might be another dentist down the street. I mean, if we're looking at an 11, 10, a prophy and again, the fee is let's just say one hundred and twenty dollars. OK, you know, that insurance company might offer doctor A down the street a 90 dollar fee, but they might offer doctor B who's just opening up a block away seventy five. Right.
Clint Johnson Unquestionably, there's a wide range of fees that are out there within the same geographic area.
Art Wiederman, CPA But I've always said, insurance companies have two objectives. Number one, collect as much a premium as they can from their people they are insuring and number two pay out as little in benefits to the people, you know, that are providing the services, whether it be medical or dental or whatever. That's the game. Right. And that's why you're so critical to have that game.
And by the way, folks, I'm going to let Clint give out his information here in a second. I did not mention I will mention now, as I have in the past, we are doing a one year, one year program called the Business of Dentistry for six local dental societies in Southern California. If you want to participate, our next one is this coming Wednesday, the 10th, which is going to be with Kristie Boltz on marketing, dental marketing. And she's dynamite. Absolutely amazing. And if you can't see them live, you can get to all of them on our YouTube page. And we've got information on our website at EideBailly.com.
So one of the things is that we're going to do in this 12 month program of which we're now going to do the second one, in the fall. My friend Clint here has agreed that he's going to do one of these and he's going to give you a two hour deep dive into the, you know, the ABCs of how this all works. And he'll have a PowerPoint, I would assume, and all this kind of stuff. So be watching out for that. So, Clint, if someone wanted to get a hold of you and work with you, you know, they have PPOs, they're not happy. They want to get in them. They want to get out of them. They want to change them. They want to blow them up. And whatever it is, how would one get a hold of you? And we'll put this in the show notes, by the way.
Clint Johnson Sure. It's very easy. We're online. It's ProfitablePPOs.com or give us a ring. 855-PPO-GAIN and happy to connect a doctor with one of our team who can help them with improvement or for doctors buying a practices or starting a practice. We have different team members who are available to help with those specific areas. And we're fortunate that we get to work with a lot of different type of practices and see a lot of different things. And that's pretty fun. It's an interesting thing to experience each day seeing so many doctors doing so many different projects.
Art Wiederman, CPA Yeah. If you're working with PPOs, you need to work with a specialist, Clint is as good as it gets. He's done a lot of really great things. I sent him to one of my clients in Orange County who before he met me, bought a practice that was 90 plus percent PPO, and the guy was doing one point three million dollars and getting about eight fifty a year in fees. After Clint was done with him, my client told me that his top line grew a little over one hundred thousand dollars. So it was a fantastic investment.
All right. Let's go back to the subject, Clint. So, you know, I see a lot of dentists that they're starting a practice, they're buying a practice and they just say, I just have to sign up for everything. I have to sign up for every PPO. There's no way I can succeed unless I do that. Then you're shaking. I can see you on the video. You're shaking your head which you should be.
So do you think it's a good strategy for dentists to sign up for every PPO? I mean, what do you tell? If I were a young dentist, I'd call you up and say, you know, I'm opening an office in Tempe, Arizona, in Tucson, Arizona, wherever it's going to be, you know? And how do I what do you tell them?
Clint Johnson Oh, boy. Yeah, so. Oh, boy, there's a lot to unpack there, but the first thing I would tell them is start really early, because as I referenced at the beginning of our conversation, insurance companies are taking much, much longer. So ideally at this juncture and doctors should start exploring the PPOs or having professionals explore those PPOs six months before opening because you're looking at often a four to five month credentialing window. There's got to be time to even negotiate on the front end. So, first of all, start much, much earlier than anticipated. If you have a tax ID number that can be done well before opening.
Beyond that, philosophically, should every doctor sign up or I'm sorry, should a doctor sign up for every PPO? No, no, they should not. And taking PPOs is a philosophical discussion for some doctors, but I'm pretty dogmatic that signing up for every PPO is not a good approach. And the reason why is because most PPOs are linked to two or three or four others. And so what happens that doctors are not aware of is when you sign up for a boatload of PPOs, you've created a network that's incredibly complex of linkages. And when PPOs are linked, then they get to choose the lowest fee schedule.
So to put that in a more tangible example, if a doctor signs up with company A, B and C, those companies have a relationship, then those companies, when a claim is filed, they can choose which fee schedule to use. Its own payer downgrading. And so the more PPOs that a doctor signs up with, the more chances you give an insurance company to find a lower fee schedule. The better strategy from a revenue perspective is to have fewer PPO agreements and to stack or to train PPOs meaning, get three or four or five decent to good PPO fee schedules, and then link up insurance companies on those.
Your front desk person will thank you because you're creating less complexity for them at the front desk. But you're also building three or four or five or 10 insurance companies around a single good fee schedule. So ultimately, for startups and for established practices, we very, very rarely want to see them have more than five total PPO agreements. Now, with those five contracts, they may be a network for anywhere from 20 to 50 PPO, maybe even as many as 200, depending upon the initial plans we sign up with. But the game here to maximize revenue and to minimize chaos and complexity is to have a few plans and stack networks on top of them and that from a revenue perspective, it cannot be argued that that is the most profitable way to participate with PPOs.
Art Wiederman, CPA OK, that's great information. So now I have a dentist has been in practice and they wake up one day and they just say, I can't do this. I can't operate anymore. I'm just getting killed here and they call you up. So they've been in network with, you know, United Concordia and whatever it is for 10 years. And they've just been getting hosed for 10 years. Hosed is a technical term I think we use in your business, probably right, among others, that among others on the radio or this is a podcast.
This is a G rated podcast. So we don't use bad language on this podcast. So they come to you. Can you just pick up the phone one day and say, oh, by the way, insurance company, there's a new sheriff in town and we want a 20 percent. I mean, how do you help a doctor who's been going down the road for years with bad PPO fees get increases. How do you do that? Is there a can you do it at any time? Do you have to do it during an open enrollment? How does that work?
Clint Johnson Sure, for a doctor who's been in PPOs for an extended period of time, let's say over a year, there's often going to be opportunities. Now. Can we just pick up the phone and call an insurance company and say we want 20 percent? No, not really, because it ultimately comes down to leverage. And leverage comes from a few different things. It comes from the demand for dental services in a particular area, meaning or there are a lot of patients or there are a lot of doctors or is there a shortage of doctors and what are the internal benchmarks of the insurance company as far as what they're willing to offer?
So it's not as simple as picking up a phone. If it were, that would be fairly easy. Instead, your ways to improve PPOs are probably going to fall into four or five main categories. The first would be renegotiation, and that is possible with a good number of peoples. However, as a technique to improve peoples, that's less effective than it used to be. And the reason why is getting those linked networks. Quick example there. If you call up insurance company A and you say I'm unhappy with the fees, if that insurance company can see that you're signed up with their linked network, who has lower fees or similarly bad fees, they're just going to say no.
They're just going to say, we don't really care if you're happy, go ahead and drop. Because if you drop that network, they're still going to keep you a network of bad fees through their linked partner. OK, so that's the challenge that a lot of doctors face. A renegotiation is one technique then to improve fees. A second one that is often very, very profitable for doctors is to move to a higher tier. And we briefly mentioned tiers. But essentially what happens is we find a lot of doctors who didn't know there were multiple levels with an insurance company or they signed up for the low level. So doing a deep dive and looking at patients within the practice and determining what percentage have the high fee and the low fee plans.
Ultimately, after significant data analysis, we're able to say, Dr. Jones, would you feel OK about going out of network for twenty two percent of these patients if the other seventy eight percent go up to a higher fee schedule and you were to make twenty eight thousand dollars more per year and most doctors are fine with that. So that would be a second technique, a third technique to improve PPOs when there is a linked network to networks or to insurances are sharing a similar fee schedule, then a technique that can be used there is to separate them and make that second company use their own fee schedule, meaning we could go to that insurance company and say we want to participate in your network. However, we're no longer willing to do it under the fee schedule of your partner network.
It's an offer to join and then the opposite technique can be applied as well when we have two fee schedules and one of them is good, what is bad? And yet they have a linked network. By eliminating the bad fee schedule, we can force that company with a pretty high degree of success to move to the higher linked network. So again, ultimately what we're trying to do is configure it so that we have five, maybe six total PPO agreements with good fees. But that still gives doctors a really widespread participation network base.
Art Wiederman, CPA Now, you had mentioned leverage and I teach. I teach my kids. I teach my clients in any business negotiation. The actions you're going to take in negotiating with the other side is going to be based on how much leverage you have. So if you're a dentist in, let's say, Santa Monica, California, or downtown Phoenix, Arizona, maybe where there's maybe a dental office on every other corner, your leverage may not be as much, but if you're a dentist in a small town of 5000 people where there's maybe one or two or maybe you're the only dentist, does that give you more leverage? How does that work?
Clint Johnson Yeah, unquestionably, supply and demand is absolutely a key factor in that. Now, if that doctor in Santa Monica or Scottsdale or downtown Phoenix or Seattle, wherever, maybe pick any large city, if that doctor's not in an area where there's a shortage of dentists, then you've got to look for alternative leverage and alternative leverage comes from those linked networks. So understand that the insurance companies created linked networks to push fees down, to pull doctors into networks that they never intended to sign up with.
The flipside to that is that in doing so, they've also created the opportunity for doctors to say to an insurance company, I understand you have a linked network with insurance company B, and their fees are one hundred and eighty dollars more on a crown than yours, why can't you match that fee? Because I know that you have a link to network.
Art Wiederman, CPA OK, well, it's knowing how to play the game. So what do you do if you have a PPO comes to you and says we're dropping fees. Remember what happened in Washington State with Delta back 10 years ago and they just went to all the dentists in Washington and this was on the news. This is not private. And, you know, so what do you do in a situation like that?
Clint Johnson Sure. It's a pretty common thing happening here in 2020, not just with Delta, but there's other plans that are doing it as well. So. The first thing we would tell a doctor is just let's step back, let's take a breath and let's analyze it first, because we're big fans of data driven decision making. Let's not overreact to this. Let's understand.
So the first thing to do would be to understand how much the fees are going down. And once you have that, then what you really want to do is you want to see how many patients this is going to impact. OK, so what doctors will make a mistake and do is they're going to say, oh my gosh, insurance company is lowering their fees. How many insurance patients or how many patients do we have with that plan? And they look at their software and they see that they have one hundred and eighty patients.
Well. That may not be the case because that doctor may not have purged their old records and that may be one hundred and eighty patients who've come in over the last decade. So instead, what we would encourage you to do is the doctor will say to this, an insurance company going to lower your fees, look and see how many patients with that particular plan came through hygiene in the last year. And determine what percentage of those patients from that plan that's going down. What they represent.
So maybe they only represent three percent of your total hygiene volume, and then if you're a general dentist, we would encourage you to look at crowns and say, OK, what percentage of the crowns from this plan, if it's only four or five percent, then you're going to feel a whole lot better about the possibility of dropping. So understanding the ramifications is the first thing. Once you understand that, then you can fight back. All right. And you can fight back in a couple of ways. One is you can then communicate to the insurance company, hey, I've done the math here and this is four percent of my practice. And if you don't back down from this, then I'm willing to just drop out of your network completely.
And because of the depth of relationship that I have with your clients, we're going to keep those right. So that's fighting back has been pretty successful for a lot of our clients over the last six months where they've been notified that an insurance company is going to lower their fee. We've crunched the data, given the doctor the ammunition to say to the insurance company, no, I know my numbers and I'm not going to do that. And a very significant number of times the insurance company has backed down and said, OK, fine, we'll let you stay where you are. So that would be a good approach.
Art Wiederman, CPA OK, so we don't let them dictate. Remember, you don't have to doctors. You don't have to participate in these networks. You know, there's marketing that you can do to find fee for service patients. That's another podcast. But you don't have to do this. So I've also heard about pay or downgrading by payers that. What should doctors be aware about on that?
Clint Johnson Yeah, this is a bit of a scary trend that doctors really need to be aware of. And again, goes back to that linked network. I sort of sound like a broken record, but a lot of negative things happen when networks are linked. So payer downgrading occurs when a doctor has a contract with one insurance company. But the insurance company chooses to ignore that contract and utilize the lower fees of a linked network.
So as an example, insurance company A has a contract with the doctor. Doctor has a contract with insurance company B, if A and B are linked and Company A can disregard the fees that they originally contracted the doctor with and instead use that fees of company B, so that is a really troubling development and it extends to umbrella's. There are different umbrella companies out there. Doctors may have heard the names Connection Dental or Maveris or Zelis, the Stratosphere Careington or Premier Detlor, TDA or Diversified. Those are different umbrellas that represent a group. Those entities that I just rattled off represent a group of 20 to 200 different insurance companies. Well, if a doctor has signed up with two of those umbrellas, then what they're doing is opening the door for the insurance company to choose the lower of the fee schedules.
Art Wiederman, CPA Wow. Is the federal government and we'll talk about what states are doing. Is the federal government aware of all this? Are they I mean, we I know we have a brand new administration that's a couple of weeks old. Are they talking about doing anything about regulating? I mean, is there any changes on the forefront that you foresee?
Clint Johnson Yeah, there is some positive movement on that front that's really been occurring for the last couple of years at the state level in some states and at the national level, it's starting to get some traction, but specifically requirements that insurance companies would have to disclose if they're going to pull the doctor into a new network without that doctor's permission or strictly banning it. So, yes, there is certainly some positive things on the horizon. There's been a couple of states more recently, Louisiana and North Carolina, that have passed bills within the last, let's say, six to 12 months that have been pro health care provider and limit the ability of the insurance company to pull some of these dirty tricks. So fingers crossed for everybody across the nation that those things that have occurred in Louisiana or North Carolina start to just spill over to other states.
Art Wiederman, CPA And you can probably if you're so, let's say an insurance company, you don't feel treats you fairly. What would you call the state attorney general? What the insurance commissioner? What would someone do?
Clint Johnson The state insurance commissioner is going to be your best option if you feel that you've really been wronged. Now, many insurance companies also have provider retention departments. And so if a doctor is willing to work through the phone tree and get through the first phone screener level and the second level and get to a managerial level, there's often going to be some opportunity for a significant concern to be handled there. But understand, a lot of insurance companies seem to have put up multiple barriers to stop doctors from getting to true decision makers. They're trying to just create enough it seems they're trying to create enough barriers that a doctor will just get frustrated, hang up the phone and go back and take care of the patient and just give up.
Art Wiederman, CPA Yeah, well, that's what they're hoping for. So I'm going to say one word here, and I just want you to start talking Delta.
Clint Johnson Yeah, Delta. Delta is going a scary direction for a lot of states. There are a lot of states where doctors are no longer able to sign up for the premier level, which is the higher level reimbursement. There's some states where they have forced doctors out of the premier level. And there are some states where a doctor is at the PPO level, and yet they've been participating there long enough that they could still move to the premier level. So for those listening today, if they're on the PPO level and they've been a provider for a handful of years, we would really encourage them to reach out to their state's Delta and find out if moving to the higher level is still an option. That option is being closed for more doctors going forward. But a lot of doctors are still grandfathered in. And when the opportunity is there, when the door still a bit open, we would encourage doctors to find out and to run their numbers and to really look at.
Because what we find out is doctors who drop from the premier level down to the PPO level. The difference in fees is significant enough that they end up being less profitable even though they're seeing more patients. Yeah, they're working harder for less money.
Art Wiederman, CPA Oh, absolutely. And so. So you're saying it's possible if I am a Delta PPO provider, because you and I both know that. I mean, Delta would love to sell more premiere plans. Right. But employers and individuals won't buy them because it's too expensive. So my understanding is that like here in California, 97, 98, 99 percent of the patients who buy Delta insurance, whether they buy it individually or through a company, are buying the PPO. But we have all these grandfathered dentists who are under I mean, I actually had Delta in my office about five years ago. We had this conversation with them and they had at that time 8,800 dentists that were premier only. And what they're doing is as dentists start to sell the practices, they're requiring the buyer to take both, which they need to understand that, yeah, you still get to be a premier provider. But, you know, you can count on one hand the number of patients that you have. I got that right.
Clint Johnson Well, specific to California, that's largely accurate, but it's not that way in every state. So as an example, Delta patients will typically fall into one of three categories. There's the patients who have premier only benefits. And as you indicated, that's a pretty small percentage of patients. And there's patients who have PPO level only benefits, and that's a decent number. But in many states, sandwiched between those is what's called PPO plus premier and PPO plus premier are patients whose benefits will pay at the premier level if they visit a premier doctor or they will pay at the lower PPO level if the doctor is only is at that level.
So this is where we would encourage doctors to find out if that opportunity exists, to move up to the premier level and if it does, to then do the due diligence and to look at your patient base of Delta active patients and say what percentage of them are PPO only, what percentage of them are premiere only and what percentage are PPO plus premier? And of those two higher tiers, those are able. And again, it depends on your state, but in many states, those two higher levels will pay much, much better reimbursement. And so a doctor, if given the opportunity, we would really encourage them to look, to look and consider moving to that higher level if the opportunity exists, they can still stay in network for the vast majority of patients that way, because a very small number percentage wise seem to have PPO only benefits.
Art Wiederman, CPA And of course, Delta is not going to call the doctors and give them these options. Right.
Clint Johnson So you're going to there's a lot whenever you're doing an audit, as we would call it, there's a lot of manual work there. The insurance companies are not going to easily disclose that, even though I don't know that they could. But even if they could, count me as a skeptic but they would.
Art Wiederman, CPA So I also know, we're getting to the time that we got to wrap this up. But I would love to talk to you more. But, yeah, I hear stories about excuse me if a dentist goes out of network and the insurance company finds this out. Do they sometimes write letters to all the patients that are in network and say, oh, by the way, Doctor Smith has informed us that they're going out of network. And, you know, we've got a lot of other great doctors right down the block from you who are in network and could save you lots. Does that happen a lot?
Clint Johnson No it can happen, does it happen a lot? No, absolutely not. We have lots and lots of doctors who will drop a PPO network, and it is very uncommon that an insurance company will send letters to the patients. Does it happen occasionally? It does. And without going into a lot of depth, we would suggest that a doctor, if they're going to consider going out of network, that shouldn't be a knee jerk reaction, they should instead plan for maybe a full recall cycle of six months, they should be planning for that, and they can start proactively talking to patients saying, hey, we're having some challenges here. But if we ever do need to leave your network, I want to assure you that you could still come here because you have PPO insurance and we would still maximize those benefits and you'd still be able to see Dr. Jones. You'd still be able to see your favorite hygienist.
And you can start to plant those seeds ahead of time. And then certainly if a doctor is dropping a PPO network, we would discourage them from sending a letter to the patients, because those letters routinely are misinterpreted by patients, because patients have very limited understandings of the nuance of dental insurance. And they simply read that the doctor is not participating. We would discourage that and would instead encourage communication directly with the patient.
Dentistry is at its core in my belief system. Dentistry is still a relationship business. It's knee to knee, eye to eye taking care of the patient. And so our doctors, when they drop a PPO, they have a very high retention rate because they've put a plan into place. They've proactively talked to the patients. They make sure that the patient's first visit after dropping that insurance doesn't cost them anymore. Meaning they will say to the patient, hey, we've changed our insurance status. But I want to assure you that your visit today, isn't going to cost you any more than it did in the past. And you can do that by you can disclose that on the insurance claim. But fundamentally, you want that first visit after dropping the insurance company plan to not cost the patient anymore.
Art Wiederman, CPA And then later it might. They will. It will.
Clint Johnson Well, it depends upon the procedure because a lot of patients have full coverage for exams, cleanings and X-rays, regardless of whether the doctor's in network or not, because insurance companies have for generations recognized the value of preventive care and paying for it. So for a patient who's just on routine maintenance, getting their teeth cleaned every six months, it often doesn't matter whether the doctor's in network because the insurance company is going to pay for one hundred percent whether you're in or out. So it really only comes into play for many patients when there is actually a copay on a crown or something like that. And that can be offset by good financial arrangements, flexible financial arrangements that can be offset by in-house financing terms.
There's lots of ways to do it. But don't create broken glass and assume that it's going to negatively impact a lot of patients when the reality is 65 percent of patients in most practices are not having any major restorative work done in a year.
Art Wiederman, CPA And even if they are, I mean, we're not talking about the national debt here. We're talking about policies that have a maximum in many cases of no more than a thousand to fifteen hundred dollars. Right. So if the difference between what they're going to pay going out of network and what they're going to pay being in network, it is probably not that much, right?
Clint Johnson Yeah, it depends upon how bad the plan was in terms of its fees. But true, in many cases, if we're to look at a composite filling, it's going to pay, let's say composite filling is two hundred dollars. Well, the insurance is going to pay for 80 percent of it. So the patient's only paying 20 percent of two hundred dollars if the doctors out a network and maybe they're paying 20 percent of one hundred and forty dollars if they're in network. So, again, the difference may be less than 40 or 50 dollars total on a procedure that isn't done on a routine basis. So doctors need to really fundamentally look at it and say, OK, wait a minute, if I were to do this, most of the patients are still going to have their coverage or their procedures covered a hundred percent because hygiene still drives the vast majority of procedure accounts in a dental practice.
Art Wiederman, CPA Well, I think it's important doctors listening to this podcast, the thousand, we have thousands of people listening to our podcast is that, you, if you're going to make a serious consideration about going reducing your dependency on being in network with policy, with insurance companies, you really need to hire a dental consultant or dental coach. And I don't know if you do any of this, but someone who can go in with the team and say, right, team, listen, the doctor has made an educated decision that he or she is going to go out of network with plans A, B, C and D, and maybe we're not going to that.
We're going to reduce our dependence. We're not going to drop every plan today, because that could be professional suicide, depending on the practice, but we're going to we have a plan. We're working with Clint Johnson of Profitable PPOs. But what we also want to do here is to give the dental team the verbal skills to overcome the objections when the patients start talking. And that's really the core of this, isn't it?
Clint Johnson Yeah, it's very, very important that the front desk be part of the process, part of the planning, part of the preparation process. And to clarify your question, we're not coaches. We focus very specifically on PPO reimbursement. We have a ton of coaches who refer to us and we are big fans. We you know what LeBron James has had has got a team of probably 10 coaches and he's at the top of his game. None of us are so good that we can't benefit from coaching. And so, yes, I would tell any doctor that they should regularly be considering having a coach in their practice. And that's not a shill for us at all because we don't do it.
But have somebody there with an outside perspective who can teach you that because it is sort of it's sad and it's not criminal. But it's really frustrating that a doctor will invest all of his time in continuing education for herself or himself and yet not provide any avenues for the team to get trained when it's the team that is driving so much of the revenue into practice through the implementation and the execution of the systems.
Art Wiederman, CPA So we're about at the end of our time. You are unbelievable as far as what you know on this subject. Give me, you know, pull out your crystal ball. Let me see it. Your crystal ball. Tell me I see it here. Hold it up here. And what do you see dental insurance evolving into in the next one to five years? And that might be a whole nother hour of you talking. But give me the short version. Where do you see this going? What changes do you see coming?
Clint Johnson Yeah, it's very rapidly going. I don't need a crystal ball to know that practices will have dramatically more PPO participation three years from now than they do today, and the reason why is because of the continued proliferation of these linked networks. So if I were to forecast that, then I would guess that well over 80 percent of doctors will be in at least five PPO networks within the next couple of years, at least 70 percent are there now. So I would see that and with that the ability to negotiate PPO fees goes down.
So a doctor has to be very selective today about who they're going to sign up with because in years, not too far away, they're going to have less leverage. So negotiating the PPOs now optimizing them now is going to be more important because leverage everything seems to indicate to us that the amount of leverage a doctor has is going to go down if they want to take PPOs. Now, the flip side to that, as doctors hone their professional skills and they invest in technology and teams and systems, I would love to forecast that doctors start moving away from PPOs. I think it will happen. It will only happen for those who are committed to continuing education and have good professional staff.
Art Wiederman, CPA Absolutely. And have a vision and basically say, you know what? What I do matters. What I do changes lives. What I do is worth more than 60 percent of what an insurance company says it's worth. And that's a scary thing. But that's why working with someone like a Clint Johnson and working with somebody like a dental coach who can help you explain this to the patients is so invaluable.
Clint, thank you so much. One more time, how can folks how can folks reach you? Email and also your phone number.
Clint Johnson Sure. By phone. We're available at 855-PPO-GAIN. That's just G A I N. Or they can reach out to us by email. And it's just simply firstname.lastname@example.org.
Art Wiederman, CPA OK, well, listen, thank you so much. Stay on the line till we finish up here. And folks, I want to thank you so much for the honor and the privilege of your time and listening to our podcast. This is what we're trying to do. We want to increase your top line, increase your bottom line. PPOs are a huge part, sadly, of dentistry. It wasn't as much when I was starting in the mid 80s with the Pacific Institute, the Pride Institute. But it has evolved in these insurance companies are very, very powerful and very, very smart. And they do take advantage. That's not a secret. And that's why you need someone on your team who understands this.
So I would encourage you to at least have a conversation with Clint if you're in network with plans, if you're not and you're thinking about it or if you want to get out, he can help you with all this. If you want to get a hold of me and talk about all of this wonderful alphabet soup, PPP, HHS, ESPN, HBO, all the stuff, give me a call on my office line, which is 657.279.3243. Email me at awiederman@EideBailly.com.
Go to Decisions in Dentistry magazine. Go to their website www.DecisionsinDentistry.com. Go to our website. If you're looking for a dental CPA, now is the time folks. If you were down 50 percent in the second quarter of last year, it's going to be an ADCPA member that's going to help you with all of this, OK? And they're going to be able to hopefully get you tens of thousands of dollars of federal tax money that is out there and the government wants you to have it. President Biden has made it a number one priority, folks, for the Treasury Department to come out with the regulations and the interpretations of the interplay between the PPP loan and the employee retention tax credit that's coming sooner rather than later. And then we will be all over that on this podcast.
So anyway, listen, thank you so much, Clint, for your great expertise and your knowledge. And it's a pleasure to call you my friend and to call you someone that is a colleague that I send my clients to and folks that will do it for this edition of The Art of Dental Finance and Management. Make sure again, this is coming out on the 10th of February. That night, the 10th of February, Kristie Boltz from My Dental CMO is going to give a killer webinar on dental marketing, the seven things that you should be doing to be successful in your marketing.
So this is Art Wiederman for the Art of Dental Finance and Management podcast. Have a wonderful, wonderful week. I hope your team wins the Super Bowl and we'll see you next time. Bye bye.
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