With COVID-19 and PPE costs, thinking strategically and optimizing your insurance participation is more important than ever.
In today’s world, providers must contend with the importance of dental networks to patient attraction and retention. Many PPO plans have built-in incentives for members to utilize an in-network provider. For example, members treated by an in-network dentist may benefit from a reduction in the cost of care, an extension of benefits, or greater share of the cost absorbed by the plan.
If you joined plans with particular insurance companies without much thought (maybe you joined as many as you could when you opened, or joined the same plans as the previous owner when you took over) there are ways to maximize the value dental insurance provides for your practice. But you need to be aware of the payer environment, because it’s changed.
As part of your efforts to negotiate with insurance companies, the ADA recommends understanding any competitive advantages you have, like unique access. However, it’s very unlikely you have a unique-access advantage. 1 in 4 providers are in 14 of the 15 largest dental networks in the US. Claims data validates that 72% of providers participated in 6 or more networks.
A massive increase in network size has changed the game.
What caused this increase in network size? First, the prevalence of dental benefits. People with a dental benefit (over 80% of Americans) are 2.5 times more likely to visit the dentist. The second cause of the giant growth is network leasing.
What is network leasing?
In what’s become a very effective tactic to lower claims costs while expanding the size of their provider networks, insurance companies started sharing—or “leasing”—their networks with each other. Network leasing is the process of offering access to in-network providers of one network to another.
Here’s a simple example.
- Provider Dr. Jane Doe is in-network with insurance company A (and not with insurance company B).
- Insurance company B agrees to a network-sharing agreement with insurance company A.
- Dr. Doe is shared, and considered in-network with A and B.
- Dr. Doe would be reimbursed based on the fee schedule A for members of insurance company B.
Network leasing has become commonplace as 11 of the top 15 dental networks now have 4 or more network leasing partners. The resulting influx of providers to networks has also eased pressure on networks to raise rates.
Networks are paying stagnant or declining rates.
With the reduced pressure to raise rates, the rates are stagnating or declining. Delta Dental hasn’t raised its rates in Texas since at least 2010. With the cost to deliver care increasing, this hurts. Further, to effectively reduce reimbursement rates, Delta Dental amended its contracting options, no longer allowing providers to choose Premier only.
And as previously mentioned, network leasing agreements allow payers to leverage fee schedules from partner networks to reduce rates. Morgan Stanley published a survey indicating reimbursement rates had fallen 6.7% for solo practitioners between 2017 and 2018, and were forecasted to decrease by 8.7% from 2018 to 2019.
Being on the directory is not enough.
Let’s search for a dentist online. If you practice in Irving, Texas, pick an insurance company and look for yourself. An example insurance company returned the following results (20 records per page) in the search radius:
- 14 doctors from a corporate dental group at 1 location
- 3 doctors from a corporate dental group at 1 location
- 2 doctors practicing at a single private practice
- 1 private practice provider at his own facility
The search results returned only four provider offices to choose from on the first page. We affectionately refer to this as directory “stuffing”—the practice of groups to credential each employed provider at each location to capitalize on directory searches. While effective for the group, this results in a more trying experience for patients shopping for a provider, and buries private practices between hundreds of duplicated providers.
The bottom line is, with the proliferation of doctors in-network, being in the directory alone isn’t enough to attract and retain patients.
What You Should Do
- Look at your participation more strategically. Consider all your options. When you joined plans, was Zelis an option? Have you heard from reps at AlwaysCare or Argus? There are new carriers making inroads in the state.
- Achieve network alignment with your market. Have you reviewed your office fees? Don’t use fee surveys to set your fees! Use the same industry standard database the insurance companies use that represents 75% of all dental claims in the country from Fair Health. Further, incorporate demographic information to sharpen your decision making.
- Identify which insurance companies are most prevalent in your market. This is accomplished through understanding key employers dental benefit plans. How many of your patients come from those companies and plans?
- Pursue the best possible reimbursements. This can be achieved either through direct negotiations with payers, or by optimizing the way in which you participate through network leased agreements.