Ep. 251: Breaking Up with Insurance: A Step-by-Step Guide to Getting Out of Network — Part 1
Thinking about dropping PPOs but not sure where to start? In the first installment of this three-part series, Jeff breaks down the first three essential steps to leaving insurance the right way while protecting your patient flow and profitability.
Handouts - https://www.mgeonline.com/ep-251-podcast-downloads-form-page/
Free Fees & Plans Analysis - https://www.mgeonline.com/fees-and-plans
The Get Out of Network Blueprint Seminar - https://www.mgeonline.com/out-of-network-blueprint
The MGE New Patient Workshop - https://www.newpatients.net/
Have a question for Jeff?
Fill out the form and he will get back to you.
Questions From This Episode
Why is getting out of network suddenly urgent, when insurance fees have been low for decades?
It comes down to a squeeze that accelerated over the last several years. Reimbursement rates have stayed flat or dropped for most dentists even as inflation has run far higher than it did in the previous five year period. The average dentist's net income dropped from about 230,000 dollars (2015 to 2019) to about 200,000 dollars (2020 to 2024), while inflation ran more than twice as high in the second period. The combined effect is close to a 35 percent cumulative pay cut in real purchasing power.
What's the actual difference between fee for service and being out of network? Do I have to stop taking insurance payment entirely?
No. Fee for service means charging your normal private fee with no insurance discount applied. Being out of network just means you are not contracted to accept a lower negotiated fee. You can still file insurance and accept assignment, meaning the insurance company pays you directly, so the patient isn't stuck paying the full fee upfront and waiting to be reimbursed themselves.
What are the first three steps before actually dropping any insurance plans?
Maximize new patients through active external marketing and better front desk conversion, aggressively reactivate patients of record who have quietly gone inactive, and do your plan homework: listing every plan, how many patients are in each, the negotiated fee for a few key procedures, and the out of network allowable fee for those same procedures. The first two keep patient volume steady so collections don't dip as you drop plans.
How do I find out what an insurance plan actually pays out of network, since that number isn't published anywhere?
Call the insurance company directly and ask about out of network benefits for the specific procedure codes you use most. Confirm whether the plan offers out of network benefits at all, what percentage it pays by category (preventive, basic, major), and whether it allows you to accept assignment as an out of network provider. Some carriers won't state the exact allowable fee outright, so you may have to narrow it down through a series of higher or lower questions until you land on the number.
Will dropping PPO plans cause me to lose a lot of patients?
Not if it's done correctly, and not for PPOs specifically, HMOs behave very differently since patients get no benefit anywhere else. Practices that maintain steady new patient flow and handle the transition properly, rather than surprising patients about network status at check in or after treatment, have lost under 10 percent of the affected patient base. Practices that handle it poorly can lose up to 30 percent.
Episode Transcript
-
Are you ready to get out of network, get paid what you're worth, and rapidly transform your profitability? This series was a long time coming, and I'm happy the time is finally here. For years, we've helped thousands of MGE clients take control of their practices and essentially stop working for insurance companies.
We've been beating the drum on this since the 1990s, but it hasn't become the popular thing to do, it seems, until recent economic pressure made it a necessity for the average dentist in private practice. I'm not saying this as a flex, as the young people might call it, it's more of a fact. This is one area where we at MGE really know what we're doing, and we've done it repeatedly with our clients. Okay, listening back to that, it was a bit of a flex.
In this series of three episodes, I'm going to move you through the entire process of taking your practice out of plans and going fee for service, step by step. These are the exact same processes we run each client through as they go fee for service, so this isn't theoretical, it's workable. Everybody's situation is different, whether you're 20 percent in network or 80, but you'd still follow these same steps to one degree or another, it would just take longer to get out at 80 percent than at 20.
I've yet to meet a doctor who loves being in network and getting fifty cents on the dollar for their services, yet a majority of doctors are still in network. Why? Usually it's fear of losing business, and I completely understand that. It can be scary. The idea of staying busy doing a crown for 680 dollars instead of your normal 1,500 feels safer to most people than an empty chair. We built this process with that exact concern in mind. So I'm not going to advise you to do anything outside your comfort zone. You can take baby steps, and I don't mean that negatively, and still get out of network. The key is taking that first step.
If you're heavily in network and want some help, we have a few things that can assist. There's our Fees and Plans Analysis, if you want help figuring out where your practice currently stands and what it would take to get out of network. We also offer a seminar called the Get Out of Network Blueprint, 500 dollars, two days, with a money back guarantee. I'll put links to both on the episode webpage.
By the end of this week's episode, my plan is to get through the first three steps of getting out, followed by the next three the following week, and the final three to wrap up the series after that.
Before I start, a brief legal disclaimer. This podcast is for educational and informational purposes only. It is not legal, tax, accounting, insurance, or professional advice, nor is it a substitute for such advice. Decisions regarding insurance participation, PPO contract termination, fee setting, marketing activities, or any other business or clinical actions involve legal and financial risk. Every listener implementing any of this information is solely responsible for reviewing their own contracts, state regulations, fee schedules, and legal obligations, and should consult with licensed legal counsel, state regulatory authorities, qualified accounting or tax professionals, insurance advisors, or other appropriate professionals before making any changes to insurance participation or fees. You accept full responsibility for your own decisions, outcomes, and compliance with all applicable laws and regulations, and you're applying this information at your own discretion.
With that out of the way, my name is Jeff Blumberg, and I'm your host. Let's start with why get out now, why is this such a big deal now versus seven or eight years ago? It comes down to a confluence of factors that have taken hold over the past six years. We've encouraged clients to get out of network and go fee for service since the 1990s, our New Patient Workshop promotion used to literally say, have a fee for service practice. Some people jumped on it, some didn't, but a lot of people weren't in a situation where it felt like a necessity.
If you look at how this evolved, and I touched on this briefly in the State of the Industry episode, when PPOs started, the fees weren't that bad, you'd be writing off maybe ten percent, going back to the 1990s, basically a marketing cost. It gradually got worse. It's a lot easier to worsen a situation gradually than all at once, there's a whole political philosophy built around this idea, that drastic change makes people react, while slow, incremental change lets years go by before people realize how much has actually shifted. Insurance reimbursements didn't rise much, or stayed flat, while inflation and costs kept climbing. So instead of writing off ten percent, dentists found themselves writing off twenty, thirty, forty, fifty percent, and it kept getting worse.
This has accelerated over the last six years specifically, to the point where, for our clients, getting out of network isn't a nice-to-have anymore, it's become a necessity. A major driver is simply overall inflation. For comparison, take two time periods: September 2015 through March 2020, a five year stretch, and then March 2020 through August 2025. The inflation rate from 2015 to 2020 was 8.48 percent, under nine percent over five years. During that period dentist incomes were actually rising faster than inflation, so the pain wasn't really felt.
The more recent period, March 2020 through August 2025, saw inflation of 25.52 percent, almost three times the earlier rate. Meanwhile, national dental expenditure hit 189 billion dollars in 2024, the highest year on record, up from 107 billion dollars in 2000, nearly doubling over roughly 25 years. Consumer dental spending is up 8 percent from pre-pandemic levels. Out-of-pocket spending, private insurance spending, and government program spending are all up.
But how has that translated to the average individual dentist? Based on ADA Health Policy Institute data, the average dentist's net income from 2015 to 2019 was about 230,000 dollars. From 2020 to 2024, that dropped to about 200,000 dollars. So picture this: the average doctor was making 230,000 dollars while inflation ran under nine percent. Now the average doctor makes 200,000 dollars while inflation has run over twenty percent.
Put together, that's roughly a 12 percent drop in income against a period where prices rose over 20 percent, which works out to something like a 35 percent cumulative pay cut in purchasing power. To maintain the same lifestyle you had in 2015 to 2019 on 230,000 dollars, you'd need to be making about 280,000 dollars today. The average dentist is making 200,000, an 80,000 dollar gap. That's car payments, school payments, a house payment you're either not keeping up with, or keeping up with while feeling squeezed and unable to save anything, compared to before.
The second piece is insurance reimbursement itself. Plans have never really kept pace with inflation, but during this more recent spike, many carriers didn't raise reimbursements at all, and some lowered them. A survey by the ADA Health Policy Institute found that from 2021 to 2025, 60 percent of dentists reported reimbursement rates as stagnant, no change at all, even as inflation ran over 20 percent. Twenty five percent reported an actual decrease. When we did our first inflation video back in 2021, I assumed insurance companies might simply not raise reimbursements. The idea that they'd actively lower them wasn't even on my radar. Only 7 percent of dentists reported an increase.
The other major factor is the labor market. A shortage in certain roles, which has eased somewhat in the last few years but still exists, drives up costs. It's more expensive to hire a hygienist, more expensive to find a strong dental assistant. So you've got flat or falling reimbursement, high inflation, and a tighter, pricier labor market feeding into each other. I was talking to someone recently paying over 70 dollars an hour for a hygienist in the Pacific Northwest.
So the real question is a gut check: at the current trajectory, based on everything we've just gone through, do you think this improves, stays the same, or gets worse? I'd bet on worse. We're already on a trajectory of degradation. Maybe it slows down, but I don't see a dramatic reversal coming. I don't see an insurance company CEO waking up one morning and deciding they've been underpaying dentists. You have to confront this directly and decide what you're going to do, because at some point you simply can't sustain a practice on reimbursements dictated entirely by an outside party.
So if the plan is to get out of network, and you can do this at whatever pace works for you, let's look at what it actually takes. First, some basic terminology, since I'm going to be using these terms throughout the next three episodes, and there's more confusion around them than you'd expect.
In network means a doctor is contracted as a preferred provider for an insurance plan, and as part of that agreement, must accept the insurance company's reduced negotiated fee schedule and charge patients under that plan accordingly. If you're in network with a plan, you've agreed to accept a set amount for a given procedure code, say code 2740, at 720 dollars.
Out of network means the doctor is not contracted with that particular plan and charges patients their normal private fee instead.
Fee for service means patients are charged the doctor's normal private fee, with no discount for insurance participation, whatever your practice has set as its private fee schedule by procedure.
Assignment of benefits is when a patient assigns their insurance reimbursement to be paid directly to the provider rather than to themselves. In the past this required a signed authorization on the claim form.
Negotiated fee is the agreed-upon fee for a procedure that an in-network doctor will charge a patient under that plan, though realistically, nobody negotiates it, you're told what you can charge. It's a bit of a misnomer that implies more leverage than most dentists actually have.
Private fee is the fee schedule an individual provider sets based on what they choose to charge.
Allowable fee, or out-of-network fee, sometimes called UCR, usual, customary, and reasonable, is the maximum an insurance company will reimburse an out-of-network provider for a given procedure, based on that plan's reimbursement percentages.
So there are three fee types to keep straight: the negotiated fee, set by the PPO. The private fee, set by you. And UCR, the maximum allowable for an out-of-network provider. Say your private fee for a crown is 1,400 dollars, and the plan's negotiated fee is 680 or 700 dollars. Many PPOs also offer out-of-network benefits to their members. If a patient goes to an in-network provider, that provider might only be able to charge 700 dollars for the crown, with insurance covering half, 350 dollars, after the deductible is met, and the patient covering the remaining 350 as a copay.
If instead that same patient goes to an out-of-network practice charging 1,500 dollars for the same procedure, the insurance company applies its own internal max allowable, or UCR, for that zip code, which might be 1,000, 1,100, or 1,200 dollars. If it's 1,100 dollars in this case, and the plan pays 50 percent on major services out of network, the patient's insurance pays 650 dollars, and the patient covers the remaining 850 dollars themselves.
What's notable about this UCR or max-allowable number is that it's an internal figure the insurance company sets, and how they arrive at it is genuinely unclear, it varies by locale and by plan, and nobody outside the insurance company seems to really know the methodology. One carrier used to publish an estimated private fee by zip code alongside their negotiated fee schedule, and what they listed as the average private fee in an area was typically 10 to 20 percent lower than what dentists in that area were actually charging. That creates a misleading impression for patients before they've even walked in the door, since it implies they're being overcharged when the number itself was never accurate to begin with. For an accurate, up-to-date fee reference by procedure code and zip code, something like the Wasserman guide is a much better resource, I'll link it on the episode webpage.
This mismatch is also why patients sometimes get an EOB or notice from their insurer implying their dentist is charging above usual and customary rates, when in reality the insurance company's internal benchmark is simply disconnected from actual market pricing in that area.
First practical question: when you go out of network, should you still accept assignment, meaning file the patient's insurance and collect reimbursement directly rather than requiring the patient to pay in full and seek their own reimbursement? I'm a strong advocate for accepting assignment. It benefits the patient, who usually doesn't understand insurance well and can get the runaround from their carrier. It also removes friction at the front desk. Some people assume fee for service automatically means the patient pays everything upfront, but that's not required, you can be fee for service and still accept assignment, you're simply collecting less from the insurance company for that procedure. Patients tend to appreciate it, in my experience.
Now let's talk about actually getting out of plans. There are nine total steps across this three-part series, three per episode. This week covers the first three. You'll notice the first two don't directly involve dropping any plans at all. Step one is maximizing new patients. Step two is aggressive patient reactivation. Alongside both, you're doing your plan homework, which we'll use to sequence which plans to drop and in what order.
Why maximize new patients and reactivate before dropping anything? This depends heavily on your current situation, which is exactly why we recommend a consult if you're unsure where to start, it's free, and there's also the 500 dollar seminar if you want a deeper dive. If your practice is already completely overwhelmed, patients waiting months to be seen, multiple hygienists, an associate, 60 new patients a month, you may not need to push hard on new patients or reactivation specifically, though I'd still keep some system in place. For most practices though, this matters.
The reason: we want patient flow to stay high as you drop plans. I've seen two patterns when practices drop plans. In one, collections dip temporarily before recovering as full fees start making up the difference. We don't like that pattern. We prefer the version where collections continue climbing throughout the transition, no dip at all, because patient flow from new patients and existing patients of record absorbs any loss.
Done correctly, you won't lose nearly as many patients as you'd expect, at least with PPOs. HMOs are a completely different situation, you will lose a meaningful number of HMO patients since they typically have no benefit anywhere else. With PPOs, I've seen clients lose under 10 percent of the affected patient base when handled well, versus up to 30 percent when it's handled poorly, meaning patients find out they're now out of network at check-in, or worse, after treatment is already done.
One thing worth flagging: people tend to generalize. If two or three patients at the front desk push back about no longer being in network, it's easy for staff to mentally inflate that into everyone is upset, we need to stop doing this. I've observed this for years as an executive, and I always push for actual numbers. How many patients said something? Three out of the three hundred we've transitioned so far? That's a very different picture. Keeping patient flow steady also removes the easy scapegoat of blaming an open hygiene slot on the plan changes rather than something else entirely. We'll also cover staff training for this transition in the final episode of the series.
So, step one: maximizing new patients. This isn't a dedicated new-patient episode, we'll do more of those separately, but here are the basics. First, make sure you have an active, aggressive external marketing plan in place, we teach this in detail at the MGE New Patient Workshop, linked on the episode page. In a lot of practices, there's already more inbound interest than the practice is converting, the average dental practice converts about 23 percent of new patient phone inquiries into scheduled appointments. That means the majority of calls simply aren't converting.
So make sure your external marketing is actually working, then focus hard on your reception area and whether you're capitalizing on the calls coming in already, which may mean reception training or drilling. Also consider off-hours coverage: I had a client in New York who paid staff to answer after-hours calls and picked up an extra 25 to 30 new patients a month, simply because people calling at 7pm after work were otherwise hitting voicemail and calling the next practice on the list instead. A small stipend for someone with schedule access and strong phone skills to catch those calls can pay for itself quickly.
Next, referrals, which are typically poorly handled in the average practice. Here's a useful gut check: the average US household has about 2.5 people. When auditing newer clients who describe themselves as a family practice, I'll compare total patients to total unique addresses. It's common to find something like 1.2 patients per address despite a 2.5 person average household, meaning a large number of spouses, partners, and kids in existing patient households simply aren't patients yet.
We distinguish between controlled and uncontrolled referrals. Controlled referrals come from actively asking existing patients about family members who aren't patients yet, where does your spouse go, do your kids have a dentist, offering to get them scheduled directly. Uncontrolled referrals come from programs like our Care Enough to Share cards, which patients hand to friends who then get a discount on their first visit, I'll link samples on the episode page. Beyond that, anyone walking into your office is a potential referral. Sabri once noticed a plumber working on a client's practice was missing a front tooth and simply asked him about it on the spot, nobody had thought to before.
Building a light incentive system around this helps too, a bonus for staff who generate referrals, a practice-wide reward for hitting a new patient goal for the month. Make it a visible, fun part of the culture, not just a quiet ask.
Step two is reactivation, which along with case acceptance is one of the two most consistently mishandled areas I see in dental practices. The core issue is that almost no attention gets paid to inactive patients, which is somewhat unique to healthcare. Coming from the broader business world, this surprised me, most repeat-business industries, auto repair, restaurants, retail, spend real money retaining existing customers.
Roughly 70 percent of a general practice's income should be coming from patients of record, not new patients, that expectation makes sense for an endodontist or oral surgeon, but a general dentist has a built-in, recurring patient base that should be the majority of production. Yet new patients get almost all the attention while very little effort goes into keeping existing patients on schedule.
Here's how a patient typically falls through the cracks: a new patient gets diagnosed, treated, and scheduled for a four-month recall. Two weeks out, they cancel, they're traveling. Front desk tries to reschedule, doesn't reach them, and the patient quietly becomes an unscheduled patient of record. Whose job is it to follow up? Usually nobody's. Maybe they get called to fill a last-minute opening if someone happens to have time, but scheduling has largely moved online, and eventually that patient is simply written off as inactive, usually with an assumption attached, like, they probably found another dentist, when the real reason is that nobody followed up.
This is how most practices in the country actually operate. I've seen practices with an active patient base of 1,500 and a total patient base of 5,000 to 6,000 over the prior four years. If every one of those patients actually returned on schedule, the practice would be overwhelmed, unless it's a brand new startup.
Here's a useful illustration. Say a scratch practice sees exactly 25 new patients a month, on the low end, but useful for the math, that's 300 new patients a year. In seminars, when I ask how many of those patients typically don't stick with the practice long-term, the common answer is 20 percent, so 80 percent stick, with additional natural attrition of roughly 4 percent a year from people moving, passing away, and so on.
Over 10 years at that pace, with proper retention, you'd have seen 3,000 new patients, retained about 1,987 of them accounting for attrition, and generated roughly 3,974 recall appointments by year 10, close to 80 a week, or about ten days of hygiene, and that's recall alone, not perio, not new patients running through hygiene. Yet the average practice after 10 years often struggles to fill even three days of hygiene. That gap is entirely attention, not opportunity.
I've shared this case before, but it's worth repeating: a client doing about 3 million dollars a year had 5,760 charts, and when I checked how many patients had a next scheduled visit after that day, it was 720. Over 5,000 patients were completely unscheduled, in a genuinely successful practice.
So while pushing hard on new patients, also assign clear ownership of reactivation, someone specifically responsible for it, compensated appropriately. We have the MGE Reactivation Program available free on the episode page. You'll likely need to add hygiene capacity as reactivation calls succeed, and if the inactive list runs into the thousands, it may be worth hiring dedicated help to work through it, but it has to be actively confronted rather than left to happen passively.
While steps one and two build volume, step three is your plan homework. First, find out where you actually stand. We have a Plan Information Sheet template and sample available as a download. Start by listing every plan you're in, Aetna Plan 987, a MetLife plan, and so on. Next, using your practice management software, pull the number of patients in each plan, your office manager or financial coordinator can usually get this easily.
Then comes the harder part: pick one or two procedures per category, commonly one preventive or diagnostic code like an adult cleaning, one basic code like a two-surface composite or a quadrant of scaling, and one major code like a crown or inlay or onlay, and record the negotiated fee for each, by plan. This is all data you already have access to in your software.
Do this deeper analysis only for plans that represent a meaningful share of your patient base, it's not worth the effort for a plan with 18 patients in it, but absolutely worth it for a plan with 350. For those higher-volume plans, you then need the UCR, or max allowable, out-of-network fee for those same codes, and this part is trickier since it's not published anywhere.
You'll need to call the insurance company directly. When you call, find out three things: whether the plan offers out-of-network benefits at all, since some effectively function as HMOs and don't. What percentage they pay out-of-network by category, since it can differ from in-network, for example 90 percent for preventive and diagnostic out-of-network versus 100 percent in-network, or 40 percent for major versus 50 percent in-network. And whether out-of-network providers are permitted to accept assignment, some plans claim they won't allow it, though in practice, clients have still gotten paid directly by carriers that told them otherwise.
Getting the actual UCR figure sometimes takes some persistence, insurance representatives frequently won't state it outright, so you may end up narrowing it down with a series of higher-or-lower questions until you land close to the real number. Some practice management systems and industry resources also crowdsource this kind of fee data by plan and zip code, which can shortcut the process when available. Whatever method you use, once you have it, log it on the same worksheet next to the negotiated fee for that code.
Once your plan sheet is compiled, plan name, patient count, negotiated fee, UCR, out-of-network benefit availability, and assignment policy, the next thing to review is your actual PPO contracts, to understand the notice period required to exit each plan, some require a month, others six months. You may or may not still have physical copies, most carriers can provide them on request, and you may want an attorney to review them.
One added complication worth flagging now, and something we'll cover more directly in an upcoming episode, is umbrella networks. We're seeing more of these among newer clients. Leaving an umbrella network isn't the same as dropping a single plan, since you're effectively exiting multiple plans bundled together at once. It's entirely manageable, but it requires its own approach, and the fine print matters. Sometimes a rate that looks better on paper, say 1,100 dollars instead of 800 for a given procedure, comes bundled with 30 other plans in that same network paying considerably less for the same code.
None of this is meant to paint the insurance industry as villainous, they're businesses whose objective is profit, which means maximizing premiums collected while controlling what they pay out, that's simply the operating model. But the core problem for a practice that's heavily in-network is that you've effectively handed control of your own fee schedule to an outside party. Every other business on the planet passes rising costs on to the consumer, a restaurant raises menu prices when food costs rise, a retailer raises prices when their costs go up. When a practice can't do that because it's contractually locked into a fee schedule, profitability becomes structurally difficult to manage, since profit is simply income minus expenses, and an outside party with no visibility into your P&L or staffing costs is dictating half of that equation.
If fees stay locked while inflation continues, even at a slower pace than a couple of years ago, that's still inflation, not deflation, eventually a practice hits a point where it can no longer operate effectively under those constraints. This is exactly why I wouldn't recommend waiting to take action. The first three steps are covered here this week: build new patient volume, reactivate your existing patient base, and complete your plan homework.
Don't forget the downloads for this episode: the Plan Information Sheet, both the sample and the blank spreadsheet, the Fees and Plans Analysis, the Get Out of Network Blueprint seminar, the MGE New Patient Workshop, the Care Enough to Share program, and the Reactivation Program.
Next week, assuming your homework is underway, we'll cover how to sequence dropping your plans, which ones first and why, along with how to handle your fees throughout the process. I hope this helps. If you have questions about this week's episode, you can email me directly at jeffb@mgeonline.com. If you want to learn more about MGE, visit us online at mgeonline.com or call 800-640-1140. Have a great week, and we'll see you at the next episode.