Ep. 56: 12 Steps to Getting Out-of-Network & Creating a Fee for Service Practice!
We’ve discussed the idea of getting out of insurance plans and creating a fee-for-service practice—but what are the actual steps you need to follow to do it? That’s what we cover today with special guest Sabri Blumberg.
Topics:
:51 – What is your specific situation and level of insurance participation?
3:44 – Ensuring you have an adequate volume of patients
15:34 – Important steps to do BEFORE dropping a plan
30:16 – Starting to phase out of plans
38:58 – Informing your patients (and retaining a high percentage of them)
46:51 – Changes to make in your practice now that you’re fee-for-service
Links:
Free PPO Exit Strategy Session - https://www.mgeonline.com/ppo-exit-strategy
The MGE New Patient Workshop - https://www.newpatients.net
Contact Sabri – sabrib@mgeonline.com
The MGE Communication & Sales Seminars - https://www.mgeonline.com/abc
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Questions From This Episode
What are the 12 steps for going out-of-network and creating a fee-for-service practice?
In sequence: build your new patient strategy first, calculate your true patient base (unique patients over the last 24 months, at 80 percent), list every plan and how many patients are in each, calculate your write-off percentage per plan, review your contracts for obligations and exit procedures, run a major reactivation push, drill your staff on handling insurance questions, set a policy for patients who slip through notification, sequence which plans to drop and in what order, notify and handle patients as each plan drops, raise your customer service to match your new fees, and commit to genuinely improving your sales and communication skills.
How do you decide which PPO to drop first?
Weigh write-off percentage against how many patients are actually in that plan. A plan with a small number of patients and a poor reimbursement rate is usually the easiest first target, you likely won't even feel the loss. Plans with reimbursement close to your private fee are lower priority to drop at all, since they function more like a modest, ongoing marketing fee rather than a real problem.
Will dropping PPOs actually hurt my practice's revenue?
In most cases, no. Practices typically lose 28 to 32 percent of patients in a dropped plan, but if the prior write-off on that plan was in a similar range, seeing the remaining patients at full fee often produces the same or better production with lower material and labor costs. A broad patient survey referenced in the episode also found cost was a deciding factor for only about 30 percent of patients choosing a dentist, the other 70 percent cared more about skill, communication, and overall experience.
What should staff say when a patient asks if the practice still takes their insurance after a plan is dropped?
Confirm the practice still accepts the insurance, since technically it does, just not at that plan's negotiated fee schedule, and pivot toward getting the patient scheduled rather than leading with a flat no. Staff should be drilled on this distinction specifically, since a mishandled version of this conversation is what actually causes patients to feel turned away, not the fee change itself.
Why should Delta Dental usually be one of the last plans dropped?
Not necessarily because of reimbursement, but because Delta has historically not allowed dropped practices to continue accepting assignment, and their patient communications can create the impression a patient no longer has any coverage at that practice at all, generating more patient confusion and staff workload than most other carriers. Unless a specific Delta plan's reimbursement is especially poor, or Delta makes up only a small share of the practice, it's usually sequenced toward the end.
Episode Transcript
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Jeff: If you've listened to this podcast for any length of time, you know we're not big fans of managed care, PPOs, HMOs, or anything that reduces your fees or reimbursement level. We've touched on ideas for getting out of these plans in prior episodes, but I realized we'd never actually laid out a concrete sequence of steps for dropping a plan, or all of your plans, and building a genuine fee-for-service practice.
Jeff: That's what we're covering this week: 12 steps to going out-of-network and creating a fee-for-service office. I'm joined by Sabri Blumberg, our Deputy Chief Operating Officer here at MGE, in charge of all of MGE's technical delivery, and someone who's worked with a lot of clients directly on exiting networks and building fee-for-service practices.
Jeff: Sabri, you're all set over there?
Sabri: All set.
Jeff: Good, let's jump right in, we have a lot to cover. Two quick qualifiers before we start the actual steps. First, this is primarily targeted at getting out of PPOs specifically. Getting out of HMOs or Medicaid follows a related but different strategy, not more difficult, just different, and if that's your situation, we can help with that separately through a free practice consultation, just mention you're looking for an HMO or Medicaid exit strategy when you reach out.
Sabri: Second, dropping PPOs is not one-size-fits-all. Someone might have 70 or 80 percent, even 100 percent, of their practice in PPOs, while someone else might only have 5 percent, in which case it's barely a decision at all. It's also shaped by location, practice type, and the kind of dentistry you enjoy doing. In a lot of cases this really is an individualized strategy, you take these 12 steps and adapt them to your specific situation.
Jeff: If you want individualized help, we offer a free PPO Exit Strategy Session, link on the episode page, most likely with Sabri or Chris Menkhaus, our Director of Practical Implementation, both genuine specialists in this area.
Jeff: All right, step one. This isn't something you do before everything else necessarily, more something you run concurrently: make sure your new patient acquisition strategy is solid before you start dropping plans.
Sabri: Right, you want that part of the practice fully under control, know what marketing you're running, make sure your receptionist is trained to convert new patient calls into patients who actually show up, and make sure your referral programs are active and producing. All of your growth levers need to be working so you can turn them up or down as needed.
Sabri: Two things tie into this. First, when you drop plans you could lose some patients, we generally estimate 28 to 32 percent as the range, 30 percent being the high end, though a lot of our clients lose considerably less than that. And often, if you look at the actual write-off level on a given plan, losing 30 percent of patients in that plan while collecting full fee from the remaining 70 percent results in zero lost productivity, sometimes more production and profitability, with lower material and labor costs on top of it.
Jeff: Which is honestly not as scary as most people assume going in.
Sabri: Not at all, and you've said something before that I think is exactly right: it's actually easier to get out of a plan long term than to stay in one. Far less of a headache. But because staying in PPOs is so normalized in this profession, dentists get this idea they can't survive without them, which just isn't true. You survive far worse financially in managed care than you ever do fee-for-service. I remember back in 1992, when HMOs first gained real traction in dentistry, doctors were signing up for every HMO available because they were convinced they'd be locked out entirely if they didn't. That was over 30 years ago, and we've seen exactly how that played out. The whole framing is designed to scare you into staying in. It's genuinely easier to get out.
Jeff: One more thing on the new patient piece specifically, since people ask this a lot: why build up more new patients first if some of those will also end up in a PPO anyway? Because safety is in numbers. If I have 100 patients and lose 30 percent, I'm left with 70. If I have 1,000 and lose 30 percent, I'm left with 700. You don't wait until you have a flood of new patients before starting this, just make sure it's happening in parallel. The MGE New Patient Workshop covers this in depth if you want help there too, link on the episode page.
Jeff: Step two: calculate the actual size of your patient base.
Sabri: Take the last 24 months of unique patients, then use 80 percent of that number as your working patient base. If you've seen 1,000 unique patients over the last two years, you're working with 800.
Jeff: Why 24 months specifically, given we've talked about reactivating patients from as far back as five years in other episodes?
Sabri: Because we're building in a safety margin here. Two years is a fairly standard, if somewhat arbitrary, industry definition of an active patient, and using it gives us a more conservative number to plan around rather than inflating our sense of available patients with older, less reliable contacts.
Sabri: Worth mentioning here too: there was a survey a few years back on what actually matters to patients choosing a dentist. Cost was a factor for about 30 percent of respondents. The other 70 percent cared about skill level, communication, and overall patient experience. That's exactly why you can reasonably expect to retain around 70 percent of your patient base through this transition, and it was a genuinely broad survey, not a narrow slice of the population.
Jeff: So if I have 500 patients trying to produce 100,000 dollars a month, losing 30 percent of those, down to 350, matters a lot more than if I have far more patients than I could ever realistically see.
Sabri: Exactly, which is the majority of practices, honestly. A lot of offices have thousands of patients technically active in the last two years that they're not seeing with any real regularity. How aggressively you sequence dropping plans, and it's rarely done overnight, sometimes it takes months, occasionally close to a year, depends entirely on how much patient volume cushion you actually have.
Jeff: Step three: list every single plan in your practice and how many active patients, meaning last-two-years patients, fall into each one.
Sabri: Right, break that full patient list down by carrier or plan specifically.
Jeff: And then step four, we start looking at fees and write-offs per plan.
Sabri: Right. You don't need to analyze every CDT code, just pick a couple of common procedures, a crown, a molar root canal, a cleaning, and compare your fee against that plan's negotiated fee to get an average write-off percentage per plan. We do have a spreadsheet for this, admittedly a bit complex, we made a video walkthrough because people would download it and not know where to start. But the underlying goal is simple: figure out roughly how much you're writing off per plan, and cross-reference that against how many patients are in it. You genuinely don't need anything more sophisticated than a piece of paper, plan name, patient count, rough write-off percentage.
Jeff: Step five: review your actual contracts, specifically your obligations and the exit procedure for each plan.
Sabri: This is important, and it's not legal advice, an attorney reviewing your contracts is always a reasonable investment here. Some plans require up to a year's notice to exit, some require written and confirmed notice, some don't. I've seen clients call to drop a plan, get verbal confirmation of a 60-day notice period, and then get told after those 60 days that they're still in-network because the cancellation wasn't submitted in writing. Interestingly, insurance companies aren't always fully aware of their own contract terms either, sometimes they'll claim something is required that isn't actually in your specific contract, which is exactly why knowing your own terms matters.
Jeff: And whatever you send, make sure you have proof it was received, certified or registered mail, something documented.
Sabri: Always. And here's something worth understanding about how these exits actually work in practice: many contracts let you immediately stop accepting new patients under that plan's fee schedule, even while you're still contractually required to honor it for existing patients in that plan for some additional window, sometimes six months or more.
Jeff: Before actually dropping the first plan, there are three things we do first. First: a genuine reactivation push through the existing patient base, getting anyone overdue for hygiene back on schedule, which helps offset whatever patient loss might occur. We have a free reactivation program download on the episode page for this.
Sabri: Second: drill your staff, meaning structured role play, on handling the specific questions that come up once you start dropping plans. Do you accept my insurance, are you in-network, that kind of thing. You want staff comfortable enough that they never simply say no and hang up, since technically you likely still accept that insurance, you're just not honoring that plan's specific reduced fee schedule anymore.
Jeff: That's actually an important nuance. If a patient calls asking whether their insurance is accepted, the honest and correct answer is usually yes, we do accept your insurance, we'll verify your specific coverage and benefits, and we do have a new patient special right now that covers most of what you'd need for an initial visit either way.
Sabri: Right, because insurance companies will often frame a dropped plan in a way that implies the patient can no longer be seen at all, which isn't remotely true, and it also happens to be convenient framing for the insurance company, since a dentist charging full fee after dropping their plan looks, on paper, like the dentist raised prices, when in reality the insurance company had been underpaying for years. It's honestly a bit of projection on their part.
Jeff: Third, before dropping the first plan: set a clear policy for what happens with patients who somehow didn't get notified and show up expecting the old fee.
Sabri: That's entirely the doctor's call. Some practices will honor the old fee one final time for a longtime patient of record with a strong payment history, essentially billing them after the fact once reimbursement comes through, others won't. Either approach is fine, the important part is having a clear policy your front desk can execute consistently and confidently, rather than improvising in the moment.
Jeff: There's a great story here worth sharing, a client in western Florida who dropped all his plans and lost about 10 percent of his patients. A patient needing a crown, whose previous PPO fee had been 800 dollars against his full fee of 1,400, pushed back on the new number. He explained why he'd dropped the plan, reduced reimbursement, staff costs, care quality, and the patient still seemed uneasy. So he just asked directly, what do you think is fair? The patient said maybe 1,200. He said, fine, 1,200 it is.
Sabri: Which isn't necessarily how we'd recommend everyone handle it, but it illustrates something important: he still collected 400 dollars more than his old PPO rate, and critically, he had the freedom to make that call himself, as the business owner, rather than an insurance company dictating his margin and telling patients, implicitly, that he was somehow overcharging them.
Jeff: Step nine: sequence your plan drop-off order using everything gathered so far.
Sabri: Right, this is where individualization really kicks in, since everything up to this point has mostly been prep work that helps regardless of your specific plan mix. Generally, weigh write-off percentage against patient count per plan. A plan with relatively few patients and a poor reimbursement rate is usually the easiest first target, you likely won't even notice the loss. Plans where reimbursement is already close to your private fee are lower priority entirely, since at that point the plan functions more like a modest, ongoing marketing fee than an actual problem.
Jeff: Once you've picked your full sequence, even loosely with target dates, you take plan one and formally drop it, following the contract exactly.
Jeff: Step ten: handle the actual patient communication as each plan drops. For a plan with a manageable patient count, a direct phone call explaining the change, still accepted, just different terms, generally goes over fine. For larger plans, it's worth being proactive with notification.
Sabri: Delta Dental specifically tends to create more confusion than most other carriers when dropped, largely because they've historically not allowed a dropped practice to continue accepting assignment, and their own patient communications can imply the patient no longer has coverage at that practice at all, even though that's not strictly accurate. One client in the Northeast handled this brilliantly, she sent a glossy postcard in Delta's own branding colors that read, on one side, we accept Delta Dental, which is technically true, and on the back explained that insurance reforms can create confusion, that the practice was faced with a choice between reduced fees and quality care, and chose quality care for their patients, while still maintaining coverage relationships with Delta. It reframed the entire situation as the insurance company's doing, not the practice's.
Jeff: And how did that land with her patient base?
Sabri: Extremely well. She went from around 100,000 dollars a month when she became a client to 477,000 dollars last month, with a strong profit margin.
Jeff: So as a rule of thumb, if Delta makes up a meaningful share of your practice, it's usually the last PPO you drop, not necessarily because of the reimbursement rate itself, but because of the added confusion and workload it tends to generate.
Sabri: That's right, unless the specific Delta reimbursement is genuinely poor, or Delta represents a small enough share that it doesn't matter either way.
Jeff: Once one plan is fully dropped and handled, you essentially repeat steps one through ten for the next plan on your list, and the next, until you're fully out.
Jeff: Steps eleven and twelve round this out. Eleven: raise your actual customer service level to match your new fees. If you're asking 1,400 dollars for a crown or 310 dollars for a cleaning, the experience has to genuinely feel worth that, not through expensive décor necessarily, but through a clean, well-run office and a sharp, attentive team.
Sabri: This connects directly back to that earlier survey, if 70 percent of patients prioritize experience over cost, and you're deliberately moving away from the cost-driven 30 percent, you have to genuinely deliver for that 70 percent. Acknowledge patients warmly when they walk in, stay on schedule, respect their time consistently.
Jeff: Twelve: genuinely commit to improving your sales and communication skills. A lot of doctors ended up in managed care in the first place because they were never taught how to market or sell effectively, and when a patient declines a full treatment plan, it's easy to blame the patient, they only care about cost, low dental IQ, whatever. In the large majority of cases, that's simply not accurate, it's a breakdown in communication, the patient never truly understood why the treatment mattered.
Sabri: Which is really the deeper point behind all of this: the quality of your patient base has far more to do with how well you communicate than with insurance participation itself.
Jeff: If you want structured help with that specifically, the MGE Communication and Sales Seminars are exactly built for this, link on the episode page. In the long run, this is genuinely how you regain control, not just of your income, but of whether a patient who needs six crowns actually gets all six done and genuinely restores their health, rather than only what insurance happens to authorize.
Jeff: So those are our 12 steps. As mentioned at the start, if you want help working through this, and we'd genuinely recommend it since every situation really is different, sign up for a PPO Exit Strategy Session on the episode page, you'll work directly with someone like Sabri or Chris who deeply knows this material.
Sabri: It can feel intimidating even mid-process, there may be moments of second-guessing, but it consistently works out. Every client we've worked with who's made it through this comes out visibly less stressed, and genuinely enjoying dentistry again, since they're finally just practicing medicine rather than having their treatment decisions dictated by an outside party.
Jeff: Which is exactly how it should be, no one should be dictating a treatment plan except the treating doctor and the patient's actual needs.
Jeff: Sabri, thank you so much for joining me this week.
Sabri: Always a pleasure.
Jeff: Everything we covered today, the PPO Exit Strategy Session signup, the reactivation program, and a few other resources, is available on the episode webpage. If you want more information about MGE, find us online at mgeonline.com or call 800-640-1140. That's everything for this week, folks, have a great week, and we'll see you at the next episode.