Combatting Insurance Challenges

Strategies to improve profitability amid stagnating reimbursement rates

Carol Brzozowski

Dental insurance has been around for more than half a century and accepting it is a necessity for most practices. Beyond the desire to help patients afford necessary treatment, not every practice is able to establish itself as an exclusively fee-for-service entity and achieve success. According to an Inside Dentistry survey, 84% of the responding dentists reported that they accepted private insurance in 2023. Many dentists might argue that, historically, dental insurance reimbursement rates have always fallen short of what they should be and that the insurance companies have always been slow in raising them to keep pace with inflation. However, in recent years, despite the significantly rising costs of staffing, equipment, consumables, and other practice expenses, dental insurance reimbursement rates have remained relatively stagnant. In the American Dental Association and Health Policy Institute's Economic Outlook and Emerging Issues in Dentistry poll for August 2023, only 9% of the respondents reported that their rates had increased since the previous year, and that was only by an average of 5% or less. About 46% of the respondents reported that their rates had stayed the same, and approximately 34% indicated that their rates had actually decreased, with some by more than 10%.

Because getting fair reimbursements from insurance providers now feels like a constant uphill battle for some practitioners, simply running an efficient practice is as important as ever. Roger Levin, DDS, founder and CEO of Levin Group, a practice management consulting firm, notes that this pattern started after the COVID-19 pandemic. "Practices should focus on achieving the highest levels of efficiency and creating the best systems for scheduling, hygiene, productivity, case presentation, customer service, and other elements of practice management," he says. Fortunately, practice owners who accept dental insurance have several recourses that they can pursue to keep their businesses thriving.

Increase Production

Levin notes that if a practice's production is at a certain level, and an insurance company reduces reimbursements, a surefire way to make up for it is with higher volume. This can be an effective strategy when the right systems are in place to reduce fatigue and stress. "Increasing production is the best way to compensate for the insurance situation other than nonparticipation, which is unrealistic for most practices," Levin says. "Practices need to be hyper focused on increasing overall practice production, such as by increasing hygiene production by at least 20%. Seventy-one percent of practices do not probe and record pocket depths, so they're not finding a lot of gingivitis or periodontitis despite the fact that there's an epidemic."

Generally, dentists should establish daily production goals and production-per-hour goals, and then take steps to improve them on an annual basis. Other strategies include increasing case acceptance for elective procedures, keeping patients up to date on fluoride treatments and diagnostic imaging, and selling products. "Reactivate patients who don't have future appointments and get them scheduled, and reduce last-minute cancellations and no-shows to under 2%," says Levin. "Although most practices believe that they keep up on these strategies, many of them are losing $30,000 to $40,000 in potential revenue per year."

James Anderson, DMD, chief executive officer of eAssist Dental Solutions, suggests that focusing on foundational business principles, such as enhancing the patient experience with regular follow-ups and appointment reminders, maintaining a comfortable and orderly office, and providing personalized care by getting to know patients and developing stronger relationships with them, is a good starting point. "Sharpen your digital marketing by acquiring a better understanding of search engine optimization, utilizing social media more creatively, and inviting happy patients to leave five-star online reviews," he says.

Practices can also consider sponsoring local community events and school programs, expanding their service offerings through continuing education, and eliminating patients' fears about dental treatment by offering more sedation dentistry solutions. "I am often surprised by how much treatment patients will accept during a single visit if a nurse anesthetist is present to put them to sleep while I focus on fixing their smile," Anderson says.

Anderson notes that to optimize operations, practices should achieve a better understanding of their expenses and patient retention numbers and participate in organized dentistry to network and collaborate with peers around these concerns. He echoes Levin's sentiment regarding the need to create excellent practice management systems. "The best systems allow teams to manage themselves," Anderson says. "Create two to five key performance indicators (KPIs) to measure production, collections, the number of same-day sealants provided, nitrous utilization, hygiene, and other important aspects of practice. You should involve team members in coming up with the KPIs and consider implementing a profit-sharing system. Once their interests are aligned with yours, they will do everything that they can to help you and your practice succeed."

Raise UCR Fees

"Setting and rebalancing fees is another crucial aspect of optimizing reimbursements, and it's not just about matching a particular percentage straight down the row from a fee schedule found on the Internet," emphasizes Greg Grobmyer, DDS, editor-in-chief and senior coding and revenue enhancement advisor for Practice Booster. "Practice fees should be set strategically, and they will vary depending on the type of practice, the PPO contract involvement, the geographic area, and the demographic served."

Christi Billquist, the director of operations at Unitas PPO Solutions also advises practices to raise their usual, customary, and reasonable (UCR) fees as needed. "We recommend reviewing office fees at the end of each year in tandem with new or deleted codes to consider when updating practice management software," she says. "If a practice is more fee-for-service rather than PPO-driven, the UCR fees may be more significant. However, PPO-driven practices are basically submitting a price to be discounted by PPOs, so to help the market, those fees should be on the high end."

Anderson notes that when raising UCR fees, tools such as FairHealth.com can offer dentists guidance in determining what is reasonable for their locale. "Practices should be raising fees every January by at least 5%," he says. "This is considered a ‘nuisance fee raise' and is a best practice. These small, often incremental fee increases are generally intended to cover minor increases in operational costs, inflation, or other small expenses without significantly impacting the overall cost structure for patients."

Levin concurs that practices should raise fees by a minimum of 5% per year. "Unfortunately, the uninsured patients will come under that," he says, "but elective procedures and noncovered procedures for insurance patients will come under that as well. In 2022 and 2023, we saw overhead increase between 10% and 12%. Staffing costs are up 9% to 11% easily. With inflation and supply chain issues, none of this is going to decrease. Like any business, dental practices need to be responsible and raise their fees, but they should also build in extensive value and customer service. Value building is a system. Customer service is a system. Practices need to operate by systems as much as possible."

According to Grobmyer, reporting full fees may affect future reimbursement increases, but it also allows practices to track the cost of participation with different plans. His company offers a UCR fee analysis service to recommend strategic fee adjustments as well as flag coding errors.

Ensure Proper CDT Coding

Grobmyer explains that an important approach to working optimally within existing in-network or out-of-network relationships is to learn to maximize legitimate dental reimbursements through comprehensive and strategic CDT coding, documentation, and insurance administration. "We have found that the vast majority of dentists are either using outdated codes or are unaware of the changes to codes and new codes that could serve as opportunities for increased reimbursement," he says.

Anderson adds that, frequently, some codes are being misused while others are underutilized. "Ensuring that you're coding the proper CDT codes for the work that you're doing often leads to immediate increases in revenue for the same work," he says.

Many practices also fail to meet and properly document all of the criteria for the proper delivery of procedures. "This could be disastrous when faced with an audit," Grobmeyer says. "Moreover, failure to stay current with CDT coding and necessary documentation, narratives, and attachments often results in delays and denials in claims processing, which can cost practices money."

Two common reporting mistakes that Grobmyer's organization sees involve the underutilization and improper documentation of CDT codes D0180 (comprehensive periodontal evaluation) and D4346 (scaling in the presence of generalized moderate or severe gingival inflammation). "Learning when these codes may and should be used and what narratives and attachments should accompany the claims can significantly increase production without seeing more patients or doing more work," he says.

Levin notes that every year, his company meets new clients who are not coding properly. One case in point is undercoding for hygiene. "Most of the time, they're receiving lower reimbursement and not higher," he says. "The insurance company is never going to complain about paying less. Over the years, improper coding can ultimately cost a practice hundreds of thousands of dollars to which it's legitimately entitled."

Negotiate With Providers

Experts have mixed opinions on whether negotiating with insurance providers produces desired results. Billquist advises practices to consistently check to make sure that they are being paid on the correct fee schedule and to reach out to PPOs every 24 months for a fee review. "For negotiations on a direct contract, it's pretty straightforward: just ask," she says. "Reach out to provider relations, or if a representative is known, contact them and provide your office information, including location, tax ID number, and providers. List top grossing codes and provide UCR fees. Remember, if what your office is receiving for a reimbursement is close to your UCR fee, that could impact a PPO's decision to provide a further discount. Companies such as Unitas can help maximize PPO revenue by examining in-network PPO options to determine which are the highest."

Anderson notes that if you have a large patient base, most insurance companies will entertain fee negotiations around 2 to 3 months before your contract is up for renewal. "PPO contracts will renew at various times throughout the year," he says. "You'll be surprised by how far you can get on your own if you're willing to put in the time on the phone, or perhaps in-person, negotiating higher rates."

Levin emphasizes that insurance negotiation can be very hit or miss. "Certain insurers, including several large ones, do not negotiate with anyone," he says. "And although it's possible that a professional firm could do a better job negotiating, in many cases, that's not effective either." For those insurance companies who will negotiate, Levin notes that it can be helpful to delegate communication to a well-trained staff member. "Many times, insurance companies will turn down legitimate cases," he says. "Some dentists think it's a conspiracy, but I don't think it's that simple. However, there is an appeal process, and practices should get used to appealing cases rejected by insurance companies one, two, or three times and even writing to the director if the dentist feels that the case should legitimately be covered by insurance."

Because PPOs are experiencing staffing shortages like other businesses, Billquist notes that there could be delays in responding to negotiation requests, and some may outright ignore them. "Persistence is the key until there is a response," she says. Billquist also cautions that PPO negotiations are not achieved through adversarial conversations. "PPOs set up parameters that are given to their representatives, and the options depend on the market, saturation of providers in the area/need, claims/patient base, and current fees the provider already receives," she says. "You should only threaten to terminate due to low fees if that is a serious consideration."

Grobmyer explains that with fee schedules stagnating, dentists have to ensure they are optimizing their legitimate dental insurance reimbursements now more than ever. "That includes contracting with the correct plans in the correct way through network optimization, negotiating existing fee schedules, and strategically exiting those plans that do not benefit the practice," he says. "Negotiating fees and optimizing network relationships and contracts are not overnight processes, but they can ultimately have huge benefits."

According to Billquist, third parties can be especially effective with optimization, where the highest in-network participation option can be evaluated knowing timeframes, risks, and patient base. "In some cases, third parties have designated points of contact, so there is a direct line to a PPO or network umbrella," she says. "Outside of negotiation and optimization, third parties can help with troubleshooting payments on wrong fee schedules, credentialing, and educating staff about in-network participation. They can also help practices determine which PPOs they should drop. In lieu of terminating insurance contracts, busy practices can mitigate the effects of lower paying PPOs by only scheduling those patients on certain days to maximize their chair time with patients with higher paying plans."

Conduct an Annual Analysis

Anderson notes that it's key for a dental practice to be aware of its numbers. "Whatever gets measured gets managed," he says. "Oftentimes, dentists are producing enough treatment with their current flow, but they are unaware of how much of it they haven't been paid for yet. Every dentist should know his or her daily less than 90% insurance and less than 90% patient portion accounts receivable balances to avoid surprises. Any accounts receivable balance less than 90% represents real money that you have already produced but are at risk of not collecting." Anderson explains that this may be due to the front office balancing other tasks, such as keeping the schedule full, presenting treatment plans, and answering the phone. "Outsourcing a billing service such as e-Assist Dental Solutions can help," he says.

Knowing when and how to legally bill and collect full practice fees is an important skill, adds Grobmyer. "Full practice fees may often be collected even when fee schedules are limiting them, such as in cases where coordination of benefits occurs with multiple plans or in situations where you may balance bill the patient," he says.

Levin recommends that practices conduct annual analyses to determine what is working, what is not working, what plans should be retained, and what plans should be rejected. "Practices often just sign up all over the place," he says. "Sometimes, they don't even know what they've signed up for and are actually in low- or no-profit situations."

Explanation of benefits forms will illustrate if a provider is out-of-network, in-network through a direct contract, or in-network through another PPO or network umbrella through leasing. "Providers can opt out of most of these leasing options, but sometimes, it can be beneficial, so scrutinizing participation and reimbursements can help to see the big picture," Billquist says. She recommends that practices perform an annual audit, including the following:

• Run a 12-month production summary, identifying which codes bring in the most revenue, and focus on them when analyzing PPO reimbursements.

• Get the most current fee schedule directly from the PPO or its portal and ensure that those are the fees in the practice management software.

• Check explanation of benefits forms to ensure that the practice is getting paid the correct fees, especially after a fee increase negotiation.

• Charge the UCR fee when submitting a claim and ensure that it is higher than the contracted fee.

Change the Results

In this time of stagnating dental insurance reimbursement rates, dentists who accept insurance may feel powerless, but there are actually many things that they can do to improve their profitability. Increasing production can help to bring in more overall revenue, raising UCR fees and ensuring proper coding can help to optimize current reimbursement rates, and negotiating with insurance providers can help to ensure that those rates are increased as much and as often as possible. Conducting an annual audit of participation and rates is a great way for practices to stay on top of their individual situations and guide their decision-making to maximize profits. "Ultimately, dental practices who accept insurance have a lot of growth potential," Levin says. "Many of them don't recognize it because they feel so busy, but when you change the systems, you change the results."