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863: Want to Drop a Few PPOs? Here is What You Should Consider – Sandi Hudson

Are you overwhelmed trying to navigate PPOs? Then keep listening! In this episode of Practical Solutions Day, Kirk Behrendt brings back Sandi Hudson, founder of Unlock the PPO, to decode some of the biggest challenges when dropping PPOs. You didn't go to dental school to deal with insurance. Let the experts do it for you! To learn more about Sandi’s company and the key things to consider before dropping PPOs, listen to Episode 863 of The Best Practices Show!

Learn More About Sandi:

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Main Takeaways:

  • Fee-for-service dentistry is more alive than ever.
  • Understand how shared network agreements work.
  • It’s not just you — this topic is overwhelming for all practices.
  • Think about the direction of your practice before dropping PPOs.
  • Don't be passive when signing contracts. Know what you're agreeing to.
  • Audit your EOBs at least once a month and know what should be coming in.
  • Be patient when trying to negotiate with reps. It may take months for a response.
  • Pay attention to letters from insurance, even when they don't seem relevant to you.

Quotes:

“Delta is the only major company left where it's a standalone contract. But pretty much everybody else has multiple shared network agreements with other companies. So, it's no longer just who do you sign a contract with, or who do you want to be in-network with? It's understanding for whatever I signed, what else comes along with that? What else am I agreeing to? And the way this all should be said is, there should have to be permission given for a dentist to be opted into these shared network agreements. Unfortunately, it's the reverse. You're automatically opted in, and the burden is on you to opt out. So, you can't really be passive about it and assume that, ‘Well, I didn't know about that. I never signed anything, so it must not affect me.’ It's the opposite. Nobody is asking your permission anymore. It's, here's this new agreement. You can probably opt out of it if you want to, but you're going to have to be the one that takes the initiative to opt out if it's not the right fit for your office.” (6:36—7:39) -Sandi

“I say to a lot of offices it's kind of like Jenga. You're plugging in this game of, what does this all mean? What things affect me in a good way versus a bad way? How do I agree to the things that might actually be beneficial for me, and how do I get myself out of the things that are not? That part has all changed. Five years ago, we still saw a lot of shared network agreement changes coming. But ten years ago was completely different than what we're looking at now. So, for offices who are actually trying to see patients, they didn't go to dental school to deal with all of these intricacies of contracting. So, to have the time to map this all out where you're trying to take care of patients and actually deliver dentistry, this has become its own subset to such a degree that it's very difficult to manage alongside of patient care. It's a lot.” (7:41—8:41) -Sandi

“The reality is it's overwhelming for everybody, these shared network agreements. Not just the dentist’s side, but the reps on the other side who work for the insurance companies are dealing with it all on their end of things. And honestly, we've had great relationships with a lot of insurance company reps for a long time. There really are some great people on the other side of the table. But one of the things that I think has come along with some of these changes is the individual reps who used to have a lot of discretion in their market no longer have that discretion the same way. So, they're having to go up the ladder. An extra one or two percent is going to require somebody else to approve it. It's going to have to go to management. There are more layers as opposed to just being able to go directly to a person and have some resolution in a couple of weeks. We've got multiple companies right now where it's three or four months that it's taking us to get negotiations wrapped up. So, this is not a thing where you call, and if they don't call you back, you throw up your hands. You've got to be persistent and know it's going to take a few months to even get a response sometimes, to get somebody who can do the negotiation piece. It really is an ongoing project now. So, there is some agreeableness out there. It's just staying at it and being very persistent until you hear back.” (10:03—11:29) -Sandi

“A lot of it will depend on your market. Sometimes, I know it's frustrating. Somebody will say, ‘Hey, I know this company is non-negotiable, but I got a great deal,’ which is awesome, and we love to hear that. The reality is that — and I speak for us on this too — it's not necessarily that we're all amazing negotiators in that. Of course, we know what we're going after. We know the market and we know what the top codes are. We're going after very targeted negotiations. But the reality is also, how much do they need you in your market? If it happens to be a time where maybe a new employer group has jumped on board and they don't have enough providers in your area, that might open up some opportunity. So, there is a piece of it that really is specific to the demographic that you're in, and do they need you more than you need them, kind of a situation. But we are seeing it loosen a bit in some markets.” (11:31—12:25) -Sandi

“What's the direction of your practice? There are a lot of ways to do dentistry successfully in terms of business models. So, there's not a one-size-fits-all approach by any means. But I do think it's important for each dentist to think about things like — some dentists don't like marketing at all. They don't want to market. They don't want to think about marketing. So, PPOs may fill a little bit more of a gap for those practices where they're thinking, ‘I'd rather have a flow of patients coming in continually, even if I'm taking a little bit less for it. It takes the burden off of me for marketing externally more.’ Other practices, dentists really like that, and they are going after a different business model. We're seeing more where not everything is hygiene driven — dentists who are marketing more to say, ‘I'm not going to rely on the new patient flow coming through hygiene to feed my schedule. I'm going to go after more specialty procedures as the end result.’ So, hygiene is maybe not quite the same piece of the practice the way it has been in a more traditional business model.” (12:54—14:02) -Sandi

“You spend so many years trying to build a practice, do everything right, treat people great, give good customer service, hire great staff, all those things. And then, you get to a point where you might actually need to be thinking, ‘Maybe I need to shrink the practice a little bit. If I lose a few patients, but for the 90% who stay I collect X dollars more, does that really check the boxes of what I want to be doing right now anyway, with quality-of-life kind of stuff?’ But it's hard. It's hard to think about shrinking a little bit when your whole business model has been making everybody happy and growing for so many years. So, I think just learning, when is it time to look at the business model a little bit differently, and being okay with that, and making sure your staff is trained and on board with changes that you want to make. Nobody wants to be blindsided by, all of a sudden, we're making changes and they don't know what that entails. So, I think real good communication with staff is a big piece.” (14:56—16:03) -Sandi

“I'm sure you've heard many offices saying, ‘I burned through two or three front office people for a few years while things were resettling after COVID-19.’ A lot of times, that means they've all lost track of, ‘I don't even know who signed what for insurance contracts. We don't even know who we're in-network with and who's paying on what.’ We get offices all the time who are, I think, kind of embarrassed because they feel like we've never heard that before. We'll ask for a list of, ‘Who do you have contracts with, and how are you participating?’ And they're like, ‘We have no idea. We know we're in-network, but we just don't know.’ So, regrouping on that really has to be first, because you can't strategically eliminate things in a good way if you don't even know what you're starting with. So, you really do have to get a good baseline.” (16:04—16:52) -Sandi

“In terms of the dropping piece, there are some good initial things to do as far as getting a handle on what you've got now, and then really deciding when is it time to make some hard changes and go with a small company where you're not at risk. If you've got a company that you're doing $30,000 of production with a year, and you drop it, and it doesn't go as well as you intended, this is not a make-it-or-break-it kind of thing. So, stepping into that on a small scale and then working your way up, I think, is a great way to approach it for most offices.” (16:56—17:35) -Sandi

“I will, a lot of times, ask, ‘How far are you booking out on the hygiene side and the operative side?’ So, let's say a dentist says, ‘I'm booking out four to six weeks on operative. We're super busy.’ Well, that does you no good. All you're doing is taking an entire four to six weeks of production — you can only see the eight hours a day that's on your calendar. So, continuing to book out further and further, it might mentally give you some assurances that we're always going to be busy. But busy, and now you're booking out seven weeks. Now, you're booking out eight weeks. That doesn't do you any good. All that means is that you could have gotten a higher paying patient in the chair, but you don't have room for them because you're accommodating all of the lower paying PPO patients.” (19:12—20:00) -Sandi

“You said about the ops, the thought of, ‘Do I build more ops?’ Because once they're in place, then I have to feed that. Another similar thing in that same line is dentists who are thinking about adding an associate. They're too busy, and they're thinking about adding an associate. One of the things I always recommend is, if you are with PPOs now, before you add the associate, get your PPO house in order. Otherwise, if you have overflow that could feed an associate right now, but let's say if that overflow is coming because you're taking a whole bunch of PPOs and you're writing off half of your fee, as soon as you hire an associate dentist to see that overflow, you're still only getting 50% of your full fee, but now you're paying somebody else on top of it to see that pool of patients. So, another good thought with that is, if you are too busy and you take PPOs, go through and get the whole analysis side of your PPOs figured out first, and then get those reimbursement rates to where they're healthy. That way, if it means dropping a couple, you're doing that while you're still going solo. Then, you get that all in order, and if you're still too busy, then it makes sense to add an associate because the PPO fees then will support you being able to pay somebody to see those patients.” (21:12—22:32) -Sandi

“For an office, even if they're just saying, ‘Hey, I'm going to try to tackle this on my own,’ I would definitely say look at the top 30 codes. Based on that, and also your volume, how much volume are you doing with each contract? This is actually where it gets harder for a lot of offices because one side of it is just numbers, what your cash fees are and all that. You can dig that up with your reports. But the amount of production you have tied to each fee schedule, that's where offices, a lot of times, are really like, ‘We've lost track,’ because a company like — pick any insurance company — probably have five or six shared network agreements with other companies. So, they know they're in-network, but they don't even know where to assign that production to. So, you don't know the impact of — you might have a low paying fee schedule, but you've only got $5,000 of production with them. So, it's like, ‘Eh, it's a low fee schedule. It's not really hurting us.’ But it turns out that low fee schedule has ten other companies that can attach to their fee schedule, and your impact is really $200,000 a year, not $5,000 a year. So, you really have to understand what insurance company is attaching to somebody else's fee schedule so that you really know the impact.” (27:33—28:52) -Sandi

“[A shared network agreement is] when one insurance company has an agreement with another insurance company. There are lots and lots of those out there now. So, what you have to be aware of is, let's say that you're a completely fee-for-service office, you have no PPO contracts, and you get an offer from — I'm just pulling names out of a hat. They're all very similar. There's not necessarily bad guys, good guys in all of this. It's just, be aware. I'm not picking on anybody, just grabbing a name. But let's say you have an agreement that you decide to sign with Guardian. So, if you have a contract with Guardian and you don't have anybody else's contract, there are a lot of other companies that can be in-network through Guardian: Aetna, UnitedHealthcare, Emeritus — lots of other companies. So, if you decide to sign up with Guardian, you need to be thinking, ‘Do I just want this contract to apply to Guardian itself?’ because that's who you're signing up with. So, your first thought is going to be, ‘Well, I'm just signing with Guardian,’ without necessarily being aware or understanding that a lot of other insurance companies can come along with that. Now, you can opt out of those other agreements, and you can say, ‘I just want this contract to apply only to Guardian.’ But again, the burden is on you. You have to say, ‘I only want this to apply to Guardian.’” (34:37—35:54) -Sandi

“What we find, as you add more and more contracts, is that pretty much all of the insurance companies have agreements with other companies. So, the thought process has to be, what's best for you? Well, it's best for you if you take some high-end companies or contracts, and if a few other companies tack onto those, you might not mind that because if it's a fee schedule you're happy with, you might think, ‘Well, if we get a few more patients and it's a great fee schedule, I don't mind if more people jump on board.’ But where the insurance companies have not added these agreements to find ways to pay you more, what they have done with these is use them to network more dentists through these agreements. But then you also have to remember, if there are multiple agreements, most likely, we're going to assume they're going to choose the lower paying path to pay on. So, you want to be careful.” (35:55—36:48) -Sandi

“You have to be really careful about how these shared network agreements impact you. It's not to say that they're always bad — it's just to say that they work both directions. So, you want to be really careful about allowing them in your practice if it works to your benefit. But if they don't, you need to understand how to wall those off. That's what we mean by an opt-out. An opt-out is not the same as a termination. A termination would be eliminating an entire contract. An opt-out is really telling one insurance company you don't want to participate with their agreement with another company. So, again, most of those are optional, and you can just do a letter or form. There's various paperwork to get yourself out of those. But you can't get yourself out of something that you're not even aware of. That's the biggest thing, is that there is no grid out there that you can just look at and say, ‘Okay, how does this all apply to my area?’ Because of all the shared network agreements, it's very messy. It's not clear. It's not a transparent system at all. So, you really do have to do some research.” (36:57—38:10) -Sandi

“Once a month, grab a stack of EOBs and look to see, ‘Okay, if I thought that Guardian was paying on the Aetna fee schedule, is it paying on the Aetna fee schedule?’ I'm sure a lot of your listeners will remember, there was a letter that went out last summer that MetLife entered a couple of new shared network agreements. That was a big one because MetLife really had not allowed other insurance companies to use their fees in the past. So, that was a pretty big one. And unfortunately, sometimes there's this letter that goes out but either somebody doesn't catch it, or it just doesn't mean anything. They don't understand what it means. Well, they come to understand what it means when, all of a sudden, six months later, they're going, ‘Wait a minute. Why is this other insurance company paying on my MetLife fees? I don't understand it.’ So, you really want to be watching for any letters, any kind of correspondence, even if it seems like, ‘I don't think this applies to me.’ You're getting that letter for a reason.” (39:09—40:11) -Sandi

“The dentist needs to at least have enough understanding of the things that are supposed to be coming in, because sometimes front office people come and go, and what may have been aligned really well for you, a couple of years later, all of a sudden, is not. And if you don't at least have some general idea of what’s supposed to be coming in, it's really hard for anybody to audit those. So, I agree with you. It can certainly be a staff person, but everybody in the practice at least needs to be aware that, ‘This is what should be coming in here. Does it match on the EOBs?’” (41:22—41:57) -Sandi

“The biggest thing that I want to pass on to dentists is you're doing a great job. This is a tough thing, and it's not anything that's taught in dental school. So, I think when dentists are hesitant to share that this is a really overwhelming topic for them, it's because they think, ‘I should be understanding this better. My practice doesn't get this, but everybody else out there does.’ I'm here to tell you that's not the case. This is a really overwhelming topic for almost all offices. So, that thought that somehow you're missing the boat — I always tell offices, remember that the contracts you agreed to a few years ago are no longer what you're getting. They've completely changed. It's nothing that the dentist is doing differently. It really is just a reflection of how this industry has totally changed. Mostly, I like to give a little encouragement because it can be a little defeating sometimes to feel like, ‘I'm working harder and harder, and I can't figure out what's going on with this insurance piece.’ So, to give some encouragement: it's not you. It's the industry. It really is a time-consuming piece that takes a long time to maneuver now.” (42:44—43:56) -Sandi

Snippets:

0:00 Introduction.

1:09 Sandi’s background.

2:03 Why this is an important topic.

5:06 The PPO game now versus ten years ago.

8:41 Trends with negotiations.

12:32 What is the direction of your practice?

19:11 Booking out further does you no good.

21:09 Do this before adding an associate.

23:01 Trends with write-offs.

25:38 Baseline, explained.

29:14 Gaps in some of the software.

31:00 Is fee-for-service dentistry dead?

32:45 Keep an eye on your larger employer groups.

34:14 Shared network agreements, explained.

38:32 Audit EOBs and pay attention to all notices.

42:24 Final thoughts.

43:58 About Unlock the PPO.

Sandi Hudson Bio:

Sandi Hudson, founder of Unlock the PPO, has a degree in Business Administration from the University of Iowa. After several years in healthcare and fundraising management, she transitioned into dental office management and spent a decade overseeing dental insurance participation and negotiations. Her experience comes from hands-on experience rather than concepts that just sound good on paper. She has worked with offices across the country and has a broad perspective on how to tailor insurance decisions to various regions and demographics. Her goal is to help dentists take a common-sense approach to managing insurance participation in a way that best fits their goals. By keeping abreast of industry trends, she is well-positioned to help dentists prepare for how insurance will best fit into their practices, both now and in the future. Sandi focuses on the analysis side of the business by crunching numbers and making recommendations about participation levels.

Sandi is married to a dentist and has a unique perspective of both consultant and dental practice owner, uncommon to the industry. 
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