Ep. 142: Rethinking Hygiene as You Go Out-of-Network
When you exit an insurance plan, the first thing patients notice is the change in their prophy fees. To retain as many patients as possible, you’ll want to make it a smooth transition. So this week, Sabri joins us to discuss doing this intelligently with an eye on overall practice profitability and maximizing patient retention.
Links:
Roadmap to a Fee-for-Service Practice Consultation - https://mgeonline.com/roadmap
Wasserman Guide - https://wasserman-medical.com/shop/product/national-dental-advisory-service-2024-software-developers-version
The MGE Power Program - https://www.mgeonline.com/power-program
Free consultation - https://www.mgeonline.com/free-practice-analysis
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Questions From This Episode
What is the hygiene as a loss leader strategy, and why does it help when going out of network?
It means keeping your hygiene fee close to what insurance plans typically pay out-of-network, rather than raising it all the way to your full private fee, while raising basic and major fees to true market rate. Since patients are used to preventive visits being fully covered and unused to a copay there, this keeps that specific visit close to fully covered, which is where most patient loss during a network exit actually happens.
Why do most patients who leave after going out-of-network leave specifically over hygiene fees, not major treatment?
Patients already expect a financial conversation for basic and major treatment like fillings, crowns, or root canals, that's familiar territory. What they're not used to is paying anything for a routine cleaning, since insurance has historically covered that at 100 percent. A sudden copay on a visit that's always been free is what actually triggers most departures, not the fact that a practice is technically out-of-network.
How do you actually find out what an insurance plan's UCR fee is for a procedure?
Insurance companies generally won't disclose this directly to the practice, though the patient can request it. In practice, some offices ask a trusted longtime patient to call and ask on their own behalf, and some end up playing a frustrating warmer-colder guessing game with the insurer's representative until landing on the actual figure.
How does keeping hygiene fees lower actually increase overall practice profit instead of hurting it?
Because hygiene typically represents only about 30 percent of a practice's total production, while basic and major treatment makes up the rest. Modeled out, a practice fully in-network with a 35 percent write-off nets roughly 22,500 dollars a month, while the same practice keeping hygiene near its out-of-network rate but charging full market fees on basic and major nets closer to 59,000 dollars a month, all while overhead stays exactly the same in dollar terms.
What should a practice watch out for specifically when dropping Delta Dental?
Delta typically won't allow an out-of-network provider to accept assignment, meaning the patient has to pay the practice directly and wait for Delta's reimbursement, which some patients can't comfortably front. Also worth flagging: some carriers, including Delta, have shifted from checks or direct deposit to debit cards for reimbursement, which quietly adds a processing fee on top of an already reduced payment, and debit cards are also a known avenue for embezzlement, so requesting a check or direct deposit instead is worth the hassle.
Episode Transcript
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Jeff: A few episodes back, in episode 138, a step-by-step guide to going out-of-network, our Deputy Chief Operating Officer Sabri Blumberg joined me to walk through the process we use with clients to help them drop plans and go out-of-network. If you've listened to this podcast for a while, you already know Sabri, she's our top technical person and has worked directly with thousands of our clients.
Jeff: One offer I made in that episode is worth repeating here: for a limited time we're offering something called our Roadmap to a Fee-for-Service Practice, a special consultation with one of our practice management specialists, like Sabri, where we review your specific practice and advise on exactly how to get out-of-network.
Jeff: I know this is yet another episode about going out-of-network, and it might feel a bit repetitive at this point. But the combination of ongoing inflation, rising costs, and insurance companies continuing to reduce in-network reimbursement has turned getting out of plans and being paid a fair fee from a nice-to-have into a genuine necessity, especially if you want to keep growing, retain good staff, and stay competitive.
Jeff: During that conversation back in episode 138, Sabri mentioned a specific tactic she's been recommending to clients more recently: keeping hygiene fees close to, sometimes just slightly above, what they were charging in-network. Essentially treating hygiene as something close to a loss leader, offering something at a lower margin specifically to bring people in for higher-margin services elsewhere. Since that episode, we've gotten a lot of questions about exactly how this works, so I wanted to bring Sabri back to walk through the mechanics and the actual financial impact.
Jeff: Sabri, you're all set?
Sabri: All set.
Jeff: Great to have you back. Let's start with your bucket system, since you'll be referring back to it. Can you walk through it again?
Sabri: Sure. Take every insurance plan you're currently in-network with and sort them into three groups. Bucket one is plans you're going to drop immediately, very few patients, poor reimbursement relative to that patient count, low enough impact that you'd barely notice they're gone. Bucket two is essentially everything else, MetLife, Aetna, whatever else makes up the bulk of your participation. Bucket three is Delta specifically, which we always save for last.
Jeff: Unless Delta happens to be a small piece of your practice, in which case it might actually belong in bucket one.
Sabri: Right, if you only have a small handful of Delta patients, sure, that changes things. But in most practices we work with, Delta represents a substantial chunk, so it stays in bucket three.
Jeff: So walk me through your reasoning on this hygiene strategy specifically. To be clear for everyone listening, we're a practice management company, not attorneys or accountants, so get your own appropriate professional advice before acting on any of this. But explain the thinking: why keep hygiene fees lower while raising basic and major?
Sabri: When we work with a client transitioning out-of-network, we already knew from experience that dropping insurance outright typically costs a practice no more than about 30 percent of the patients in that specific plan. But that number still felt too large for a lot of clients emotionally, there was real anxiety around it, even though we'd never actually seen it go badly, even when clients prepared poorly.
Sabri: I remember one client who was heavily in HMOs and just dropped everything in a single day, with essentially no preparation. It still worked out fine for him in the end, but it definitely didn't help build anyone's confidence in the process at the time.
Jeff: That definitely wasn't advice we gave him.
Sabri: Not at all, he just did it. But the core issue we kept running into was clients believing they'd lose the vast majority of their patients, even when we knew that wasn't accurate. So I looked more closely at what was actually driving patient departures in the cases where it didn't go smoothly. The overwhelming majority of patients who left did so because of the change in hygiene fees specifically, not because of anything related to basic or major treatment.
Jeff: Because patients are used to hygiene being fully covered.
Sabri: Exactly, especially a mom bringing in a couple of kids for cleanings, everyone's used to zero copay there. But for fillings, root canals, crowns, they already expect a financial conversation, they know that's coming. So when a practice goes out-of-network and suddenly there's a copay attached to a routine cleaning specifically, that's what actually triggers the departure. Very few people left purely because the practice was technically out-of-network. As long as we explained clearly, your cleaning visit works essentially the same as before, and any additional treatment gets a proper financial discussion like always, that was an easy conversation to have.
Sabri: In practice, about 80 percent of patients never even noticed a meaningful change. New patient acquisition wasn't really affected either, since between a new patient special and hygiene still being close to fully covered, it was easy to get someone in the door. A new patient asks if you're in-network with their plan, and you simply say, we're out-of-network with that plan, but your hygiene visit is still fully covered, would you like to schedule?
Jeff: And with a new patient special specifically covering the exam and any imaging, you're eating a similar cost there anyway, so it's not really a new expense, just a different framing of an existing one. So essentially what we're doing is accepting a permanent reduction on hygiene specifically.
Sabri: Right.
Jeff: Let's talk reimbursement for a second. Say the average in-network prophy fee is around 75 dollars. I know some plans pay differently out-of-network.
Sabri: Correct.
Jeff: So say the true, full private fee in that area would run closer to 130 to 150 dollars, but the insurance company's own out-of-network UCR rate for that same code comes in around 90 dollars.
Sabri: Right, and some carriers will actually pay the full UCR, others have caught on and pay something like 90 percent of UCR specifically to leave a small, deliberately uncomfortable copay. But that's a minority of carriers, most pay the full UCR amount.
Jeff: So for the few plans that only pay 90 percent, we're really talking about a copay of maybe 10 dollars, not something dramatic.
Sabri: Right, exactly.
Jeff: So if I have straightforward cash patients who've been paying, say, 140 dollars for a cleaning, what you're describing means their fee effectively drops to 90 dollars too, since you can't run two separate fee schedules.
Sabri: That's exactly right, and yes, it is a bit of a radical idea. If someone has very little PPO participation, I'd just say drop the plans and leave your fees alone entirely, this strategy doesn't apply to them, it would just be cutting their own fees for no reason. But the clients we typically work with are 80 to 100 percent PPO, with so few true cash patients that catering specifically to that small group doesn't make sense. It's like maintaining a full private fee schedule you almost never actually use.
Jeff: And realistically, if I'm 70 percent PPO, trimming the cash fee slightly while simultaneously raising the hygiene fee up toward a typical UCR level, you're recovering that difference quickly, and then some, once basic and major fees are also raised to true market rate.
Sabri: Exactly, you don't actually lose money in hygiene doing it this way, once you look at the full picture.
Jeff: So what research does someone actually need to do here? Say I'm 75 to 80 percent PPO, a good chunk of that being Delta. My bucket two is ready to go. What's the process for finding these numbers?
Sabri: This part is genuinely tedious. Insurance companies won't disclose their UCR fee directly to the practice, only the patient can request it. So either you have a longtime patient you trust enough to make that call on your behalf, or you end up playing a frustrating guessing game with the representative, asking whether it's more or less than a given number until you land somewhere close.
Jeff: Warmer, colder.
Sabri: Literally that, it's absurd, but that's genuinely what it takes sometimes. The other piece of research is figuring out whether there's any benefit reduction specifically for going out-of-network, some plans drop preventive coverage from 100 percent to something like 90 percent out-of-network.
Jeff: And realistically, most practices find their patient base isn't evenly split across every plan, usually a small handful of plans make up the bulk of the practice.
Sabri: Right, and those are the plans worth prioritizing this research on. Even in the worst case, where a plan only pays 90 percent, we've never seen a practice lose more than about 30 percent of patients overall from a full, well-executed transition, with Delta running closer to 30 to 35 percent specifically.
Jeff: So walking through this practically: I've found the average in-network fee across my largest plans is around 70 dollars, and I've determined the out-of-network UCR for those same plans comes out to roughly 90 dollars. Is that where I set my new hygiene fee?
Sabri: Exactly, you want that fee to land wherever it covers the majority of your actual patient base at or close to fully covered.
Jeff: Meanwhile basic and major move up to genuine private fee rates, which patients handle easily since they already expect that conversation, and they understand it's a one-time investment rather than a recurring expense. And frankly, going out-of-network is often about not compromising on labs or materials in the first place.
Sabri: Exactly, using better materials costs more upfront but extends how long the work actually lasts, versus using cheaper materials that need redoing sooner, which ends up costing the patient more over time anyway. That's a genuinely easy conversation to have.
Jeff: The broader framing being, this is about the patient, about doing the best work possible, not about what an insurance company happens to authorize, and insurance companies going through their own reforms doesn't obligate me to follow along, especially while I'm still paying my own staff fairly.
Sabri: Exactly right.
Jeff: So we've adjusted the prophy fee to 90 dollars, same treatment for bitewings, PAs, full mouth series, everything preventive and diagnostic. In theory that should mean little to no copay for most patients, assuming a plan pays close to full UCR. From what I've seen, the average PPO write-off on preventive and diagnostic runs somewhere around a 30 to 50 percent reduction from true private fee, is that consistent with what you've seen?
Sabri: Yes, consistently in that range. What I typically see with clients is an in-network fee around 900 dollars for something like a crown, an out-of-network UCR listed around 1,300 to 1,400 dollars, but the actual local private fee, once you check it properly, often runs closer to 1,600 to 1,800 dollars. So the real write-off relative to true private fee is often 40 to 50 percent, not the smaller gap the UCR figure implies.
Jeff: You'd mentioned this before too, that most newer clients coming to us are sitting below the 40th percentile on their own private fees, and I've checked this myself on a few practices, it's genuinely surprising every time.
Sabri: It really is. UCR sounds like it should mean usual and customary, but it's really just the insurance company's own number, and it's consistently lower than the actual market rate for that area.
Jeff: For anyone wanting to check their own actual private fee rate, I'd recommend the Wasserman Guide, I'm a fan of the developer version specifically, no financial relationship with them, just a genuinely useful tool. It breaks out fees by zip code and CDT code across percentile bands, 40th, 50th, 60th, and so on. Being at the 50th percentile means half the practices in your area charge the same or less, half charge the same or more.
Sabri: And it's worth remembering, dental overhead used to reliably sit around 50 percent, before PPOs existed at all.
Jeff: Right, and that was covering staff, facility costs, everything, at 50 percent overhead. That tells you where private fees genuinely need to sit today, adjusted for decades of inflation since then, to maintain that same healthy 50 percent overhead. These days it's rare to see a practice at a clean 50 percent, we used to see plenty of practices in the mid-to-high 40s and low 50s regularly, back in, say, the early 1990s.
Sabri: And that 50 percent benchmark still technically holds today, at true full private fee. If you took everything a practice actually produces and re-ran it at genuine Wasserman-guide private fee rates rather than actual collected amounts, overhead would land close to 50 percent again for most established practices, maybe a bit higher for a newer practice still carrying startup debt, but it would rarely exceed 65 percent, which used to be considered genuinely alarming and is now fairly typical or worse under heavy PPO participation.
Jeff: So to bring this together: we've raised preventive and diagnostic fees to match UCR for our largest plans, and raised basic and major to genuine market rate, the 60th percentile or so per the Wasserman Guide. At that point, hygiene profitability actually improves slightly compared to being in-network, since the hygienist's hourly rate doesn't change regardless of what the practice collects per visit.
Sabri: Right, you're making a bit more from hygiene than you were while in-network.
Jeff: Which is interesting, because one metric we've talked about for years is that roughly 30 percent of practice revenue should come from hygiene. This shifts that ratio somewhat.
Sabri: It does, but if you're heavily in-network, this is a strong intermediate step. Taking a discount on 30 percent of revenue while collecting full rate on the other 70 percent is a lot better than discounting 100 percent of revenue across the board. Your numbers start making real sense, overhead comes back under control, and you might even be able to give staff a raise without real financial strain, or set aside a genuine buffer for time off.
Jeff: So let's say bucket two is fully handled at this point, fees normalized, plans dropped, everything's working well. Now we get to Delta specifically. What are the particular quirks of dropping Delta?
Sabri: The most well-known issue is that Delta typically won't let an out-of-network provider accept assignment, meaning Delta pays the patient directly rather than the practice, so the patient has to pay you out of pocket and wait to be reimbursed. For most Delta patients, that's not enough to make them leave, but for a real minority, especially with finances tight right now, fronting that money isn't something they can comfortably do.
Jeff: I was talking with a client at a recent conference, a large multi-office practice up north, who handled this a bit differently. He collected only the amount the patient would have owed as a copay, and let them keep and eventually pay him back once Delta's reimbursement check arrived.
Sabri: A real calculated risk, but it worked out. Patients appreciated it since it felt like the practice was sharing some of that risk with them, rather than placing the entire burden on the patient upfront.
Jeff: He did have a bit of a gap in collections for a month or two while that cycled through, but it fully resolved.
Sabri: And honestly, for a patient of record you trust, that's a genuinely reasonable approach if it doesn't materially strain your own cash flow. He did this for larger basic and major cases too, not just hygiene, which is a bit bolder, but since Delta was only ever going to reimburse 1,000 to 1,500 dollars on a 5,000 to 6,000 dollar case anyway, the wait didn't change the underlying math much.
Jeff: Here's something worth mentioning too, and it might sound like a small thing. What percentage of clients who've technically gone out-of-network with Delta do you think are still actually getting paid directly by Delta, against their own policy?
Sabri: Honestly, a good 65 to 70 percent of the clients I've talked to who've gone out-of-network report nothing actually changed, Delta is still allowing them to accept assignment in practice, even though that's technically not how it's supposed to work.
Jeff: Interesting, maybe their internal systems just aren't catching it consistently.
Sabri: Possibly. One related thing worth flagging directly: several carriers, Delta included, have shifted in recent years from mailing a check to issuing a debit card instead for reimbursement. That quietly adds a processing fee on top of an already reduced payment, on top of the write-off you're already taking. It's worth calling and specifically requesting a check or direct deposit instead.
Jeff: And worth noting, debit card reimbursement has also become one of the more common vectors we've seen in recent embezzlement cases, even with an NPI number theoretically required to process it, people have found workarounds. A direct deposit tied to your actual bank account, or a mailed check, is simply safer and easier to reconcile.
Sabri: It does take some persistence, a lot of hold time, sometimes paperwork, but it's absolutely worth doing.
Jeff: So let's bring in the actual numbers on this whole strategy. Picture a fully in-network practice with a 35 percent average write-off, genuinely on the conservative side, real fee value would be 150,000 dollars a month, adjusted down 35 percent to 97,500 dollars collected. With overhead at 75,000 dollars, which happens to be exactly 50 percent of that unadjusted 150,000 dollar figure, the actual overhead percentage against real collections comes out closer to 77 percent, and net profit lands around 22,500 dollars a month.
Sabri: Which is genuinely not a healthy number.
Jeff: Now model the alternative: hygiene held near its UCR or out-of-network rate, basic and major raised to true market value. Of that same 150,000 dollar full-fee production, 45,000 dollars, 30 percent, is hygiene, 105,000 dollars is basic and major. Hygiene at the reduced rate with the same 35 percent write-off comes to about 29,250 dollars, while basic and major collects the full 105,000 dollars. Total collections: 134,250 dollars, against the same fixed 75,000 dollar overhead.
Sabri: So overhead as a percentage drops to about 56 percent, and net profit comes out to roughly 59,000 dollars a month, more than double the first scenario, just from restructuring fees, without changing overhead at all.
Jeff: That's a difference of nearly 450,000 dollars a year in net profit, from a single fee adjustment.
Sabri: And these numbers are actually fairly conservative, real hygiene fees in practice tend to be a bit higher than what we modeled here, so the real-world improvement is often even better.
Jeff: Which genuinely makes the cost of dental school worth it. It's an enormous amount of financial risk and sacrifice to become a dentist and open a practice, yet average general dentist net income has barely moved. Based on figures from a recent episode, average GP net income only rose about 160 dollars total between 2019 and 2022, while inflation over that same period ran around 21 percent.
Sabri: Just to keep pace with inflation alone, that income would have needed to rise by roughly 40,000 dollars over that period, not 160 dollars.
Jeff: So purchasing power for the average practice owner has actually declined significantly. What's really happened is a structural wealth transfer, from the practice directly to the insurance company, as premiums have climbed sharply while reimbursement to providers has stayed flat or fallen.
Sabri: Which is exactly why getting out matters so much right now.
Jeff: So here's my recommendation to wrap up: if this resonates and you're ready to make a change, look into our Roadmap to a Fee-for-Service Practice consultation, link on the episode page. You might end up working directly with Sabri. If you want more context on the broader process first, episode 138 walks through it in detail. This particular offer is normally reserved for MGE Power Program clients specifically, link to that program also on the episode page, but it's worth exploring either way.
Jeff: Sabri, thank you so much for joining me again this week.
Sabri: Always happy to. I think this is a genuinely useful strategy for the right practice.
Jeff: If you have questions about any of this, you can email Sabri directly at sabrib@mgeonline.com, or reach me at jeffb@mgeonline.com. If you want to learn more about MGE, visit us online at mgeonline.com or call 800-640-1140. Sabri, thanks again for being here, and folks, have a great week, we'll see you at the next episode.