A number of doctors have asked if they can cancel their PPO contracts without losing a huge number of patients. My advice is to not cancel the plans without having a business plan in place. Your decision will relate to your practice philosophy, practice mission, and future growth.
When developing your business plan, focus on quality of care, NOT the issue of cost, although we (including patients) know that money plays a factor.
Be PROUD of your fees, because they allow you to render the highest quality service to each patient in your practice!
My recommendation for a business plan begins with evaluating the effect this change will have on the practice.
You can start by calculating the number of patients in your practice who have PPO plans. This is simple if the patients’ referral sources were entered as Blue Cross PPO, Delta PPO, etc. The easiest method to obtain the information is to query your computer database.
If your software has this feature, then run a “Referral by Source” report for the last 12 months. That report should provide the numbers of patients seen by each PPO plan and the amount produced by plan. Divide the production number by 12 (months) to determine the average monthly production for each plan and what you would need to replace if all PPO patients were to leave.
With these numbers in hand, take a hard look at the myriad PPO plans that you are contracted with. If your office sees a large number of PPO patients, then it is advisable to not drop all plans at the same time. Instead, implement a phased approach by dropping these plans one by one to give yourself time to evaluate the effect on your practice and your ability to replace lost revenues. I recommend dropping plans in order of the worst (lowest fee schedule) first. A patient-centered practice with established relationships has a better chance of retaining some, but not all, of those patients.
The next step is to schedule a staff meeting to discuss the Drop PPO Campaign. Let the team know what you are thinking, due to the increase in expenses.
Communicate to your staff that one of the main reasons you have decided to cancel your PPO contracts is due to the impact of the COVID-19 pandemic. You need their support if you are going to successfully accomplish this. At first, staff may be hesitant due to fear of the change. This is natural. After all, the staff may feel that their future employment with you is at risk when you are in the middle of the Drop PPO Campaign.
Deal with the details of the PPO issue. I recommend that you continue to bill the patient’s insurance as a courtesy.
Have your patients sign a Treatment Acceptance Agreement for the TOTAL amount of the Treatment Plan. This agreement gives the patient an estimate of the insurance expected but clearly informs patients they are responsible for the entire fee.
Send a letter to PPO patients who have not been in during your pre-Dropping PPO Campaign, stating that your office’s relationship with their PPO plan will change.
Include the date this change will go into effect. Make the letter positive and avoid saying anything negative about the insurance company. Remind patients they can still see you, and you will bill their insurance for them. Be honest and caring while focusing on the issue of quality of care.
Send out a test batch of the letters to selected PPO patients with whom you have had long and good relationships. Then call them up personally to discuss the change and get their reactions.
Have your “Follow Up” campaign planned and ready to initiate.
What are you going to do when someone leaves the practice over this issue? Try sending another letter. This one should say you are sorry to see them go, that you understand why they are leaving, and that your door is always open should they decide to return. Give it some time, and then call these patients. Some of those who left may not like their new provider, even if less expensive. The personal touch of a phone call can bring them back, but only if they know you do not bear grudges.
Stay in the loop with your staff during the process. Two-way communication is essential.
Inform appropriate staff that you wish to be kept informed of what is happening and that you want to see the chart of PPO patients who are changing offices so you can participate in the decisions as to how to handle. Your staff will appreciate your concern and the support during this process.
Do not raise your fees at this time as you will lose PPO patients who were considering staying even though their out-of-pocket costs would be more than when you were a contracted provider.
Once the dust has cleared, come to a decision on appropriate fees. Most offices have found they actually generate more production once they drop PPO plans. Even without a fee increase.
This is the process we have found works best. Follow these guidelines so you don’t end up with a lot of time on your hands due to a light schedule after you are PPO-Free.
Kathleen Johnson is a dental practice management and transition consultant with more than 35 years in the dental field.
FMI: kajohnson@sbcglobal.net or www.kjohnsonconsulting.biz