Ep. 252: Breaking Up with Insurance: A Step-by-Step Guide to Getting Out of Network — Part 2
Ready to take the next step toward going fee-for-service? In the second installment of this three-part series, Jeff covers steps four through six, showing you how to organize your PPO exit, adjust your fees, and prepare your practice for long term success.
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
Wasserman Guide – https://wasserman-medical.com/product-category/dental
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Questions From This Episode
What are the three buckets used to sequence which insurance plans to drop first?
Bucket one holds plans with very few patients and poor reimbursement, easy to drop with minimal impact. Bucket two holds plans making up a large share of the practice, regardless of how well or poorly they reimburse, which need to be dropped more gradually over several months. Bucket three is reserved specifically for Delta plans, kept separate and saved for last due to how aggressively Delta tends to communicate with affected patients.
Why is Delta Dental typically saved for last when dropping insurance plans?
Because Delta has a track record of sending letters directly to affected patients that, while technically accurate, are often worded in a way that leaves patients with the impression they can no longer see their current dentist at all. That tends to generate more patient confusion and staff workload than most other carriers, so it gets sequenced last regardless of how many Delta patients a practice actually has.
Should you try to renegotiate fees with an insurance plan before dropping it?
It depends heavily on how many other in-network providers exist in your area and how motivated the insurance company actually is to keep you. Some plans will offer a modestly better rate specifically because they're worried about losing network coverage in an area, but that improved rate isn't guaranteed to hold over time, and pursuing renegotiation is also how many practices unintentionally end up locked into a broader umbrella network with plans they never explicitly agreed to.
Why should preventive and diagnostic fees actually be lowered to the out-of-network UCR rate rather than kept at full private fee?
Because patients are used to preventive care like cleanings being fully covered, unlike basic and major treatment, where they already expect a financial conversation. If a practice goes out-of-network and simply charges its full private fee for a cleaning, patients who've never had a copay for that visit suddenly owe money out of pocket, which is exactly where most patient loss actually happens. Lowering preventive and diagnostic fees to match the insurance company's own maximum allowable rate keeps that visit fully covered, avoiding the surprise entirely.
How does adjusting fees this way actually increase revenue instead of hurting it?
Because private, uninsured patients typically make up a small share of a heavily in-network practice, lowering the preventive fee to match the out-of-network rate barely affects overall hygiene revenue, while raising basic and major fees to the 50th to 60th percentile or higher captures significantly more per procedure across every patient paying that rate. In one modeled example, a practice actually saw hygiene revenue increase by roughly 50 percent after making this exact adjustment.
Episode Transcript
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This episode is part two of a three part series laying out a step-by-step sequence for moving a practice out-of-network and going fee-for-service. I'd recommend listening to last week's episode first, Ep. 251, Breaking Up With Insurance, Part 1, since this one builds directly on it and picking it up cold may leave you a bit lost. There are nine total steps in this sequence, steps one through three were covered last week, I'm covering steps four through six this week, and the final steps seven through nine will wrap up next week. I'll also re-post last week's downloads on this week's episode page in case you missed them, since you'll need them here too.
One thing worth saying before we dive in: even though I'm laying out exactly what we walk clients through, this process, especially for a heavily in-network practice, can genuinely feel intimidating, and that's completely understandable. You don't want to make a costly mistake. Two things on that. First, this is designed so you can move at whatever pace feels right to you, faster or slower, the goal is simply that you can move forward without more stress than you can reasonably handle. Second, if you want direct help along the way, which I'd genuinely recommend if you're heavily in-network, we offer a free Fees and Plans Analysis with one of our practice management specialists, no obligation, link on the episode page. There's also our two day virtual Get Out of Network Blueprint seminar, which comes with a money-back guarantee, also linked.
Standard disclaimer before we continue: this information is for educational and informational purposes only. It is not legal, tax, accounting, insurance, or professional advice, nor a substitute for it. Decisions regarding insurance participation, PPO contract termination, fee setting, marketing, or any other business or clinical action carry real legal and financial risk. You are solely responsible for reviewing your own contracts, state regulations, fee schedules, and legal obligations, and should consult licensed legal counsel, state regulatory authorities, qualified tax or accounting professionals, insurance advisors, or other appropriate professionals before making any changes to insurance participation or fees. This is information for you to evaluate and apply at your own discretion, and you're responsible for the outcome.
My name is Jeff Blumberg, and I'm your host. Let's briefly recap steps one through three before moving into four through six.
Step one and step two, covered in detail last week: maximize new patients, and run an aggressive patient reactivation effort. The core idea is increasing overall patient flow into the practice before you start dropping anything, since most practices have a large number of technically inactive patients who still consider you their dentist, and bringing them back, along with increasing new patients, helps offset any potential losses from dropping plans, which tend to be smaller than expected when this is done correctly.
Step three is doing your homework using what we call the plan analysis sheet, available as a download. For each plan, you record the plan name, number of patients in it, and the negotiated in-network fee for three to six selected codes, one diagnostic or preventive, one basic, and one major. That negotiated fee is already in your practice software. Then you find the out-of-network or UCR, usual, customary, and reasonable, fee for those same codes, which is trickier since insurance companies generally don't hand this over directly. Crowdsourced resources exist, some available through Open Dental, and Delta has something similar in certain states, but getting this number sometimes takes real persistence on the phone.
As an example: say your negotiated in-network fee for an adult prophy is 46 dollars, while the same plan's out-of-network UCR for that code is 96 dollars. Your actual private fee, what an uninsured patient pays, might be 120 to 130 dollars, that's separate for now. You're also gathering related data, like the fact that some insurers pay a reduced percentage of UCR out-of-network compared to their standard in-network reimbursement tiers, another cost-containment tactic worth knowing about upfront.
One practical note: only do this deep research for plans with meaningful patient volume. If a plan only has 20 patients, it's probably not worth the effort of calling to extract an out-of-network fee. If it has 600, it's absolutely worth it.
With that homework complete, we move to step four: sorting every plan into one of three buckets. Bucket one holds plans that are easy to drop, low patient count, poor reimbursement, where dropping the plan entirely wouldn't materially affect the practice even if every single patient in it chose not to return, which most won't anyway.
Bucket two holds plans that are more complex to exit, regardless of how good or bad the reimbursement actually is, simply because they represent a large share of your patient base. If five plans together account for 3,000 of your patients, you're not dropping all of them simultaneously, that gets phased out over several months to manage the workload and patient impact.
Bucket three is reserved specifically for Delta plans. We separate Delta out because dropping it tends to be more complicated than other carriers. In our experience, Delta has a pattern of sending letters directly to affected patients that, while technically accurate, are often worded in a way that leaves the patient with the impression they can no longer see their current dentist at all, when that's not actually true. Other carriers have started adopting similar tactics, but Delta remains the most aggressive about it, which is exactly why it's sequenced last, expect more patient questions and potentially your own outreach, we'll cover sample letters for this later in the series. One client even sent a postcard in Delta's own brand colors specifically to preempt the confusion.
So to recap step four: bucket one is easy, low-impact plans, bucket two is larger plans requiring a phased approach, bucket three is Delta specifically.
Step five is sequencing the actual drop order using your spreadsheet, though we're not pulling any triggers yet, staff training still needs to happen first, which we'll cover next week. Within bucket one, prioritize plans with the fewest patients and worst reimbursement as your first targets. Some practices drop an entire bucket one at once, I've had a client with eight bucket one plans, each under 50 patients, drop the whole group simultaneously across 6,000 total charts. Others sequence bucket one plan by plan. Either approach works, the point is simply reversing direction, moving away from accepting worse and worse reimbursement terms over time.
Bucket two requires more judgment, balancing patient count against reimbursement quality. Say plan A reimburses better but only has 200 patients, while plan B reimburses 15 percent worse but has 900 patients, you'd likely drop plan A first simply because fewer patients are affected. This is genuinely where outside perspective helps, a consultation or seminar isn't required, but having someone else look at your specific numbers and confirm you're thinking about it soundly is often reassuring.
A question that comes up often here: should you try renegotiating fees before dropping a plan? There's no universal answer, it depends heavily on how many other in-network providers exist in your area and how motivated the insurance company actually is to keep you. If you're about to drop a large plan and they reach out offering to renegotiate, that alone should raise a flag, if no one else in your area accepts that plan, that's worth noticing. Some will genuinely offer a meaningfully better rate, say bringing an 1,180 to 1,200 dollar reimbursement on a 1,300 dollar crown, under 10 percent write-off, which isn't unreasonable. But that improved rate isn't guaranteed to hold as inflation and costs rise over the following years, you could end up back in the same position five or six years later.
Renegotiation is also frequently how practices unintentionally end up in an umbrella network. The general pattern: you're unhappy with a specific plan's reimbursement, a fee negotiator gets you temporarily out of that plan, negotiates an improved rate, then re-enrolls you into a broader network you've essentially agreed to as a package. The problem is you often don't know every plan bundled into that umbrella, so patients start arriving from insurance companies you've never directly negotiated with, sometimes at reimbursement rates you don't discover until you actually file the claim. I'm not a fan of this structure, and exiting an umbrella network later is considerably more complex than exiting a single plan, which we'll cover next week.
Bucket three, Delta, gets saved for last for the reasons already covered, more potential patient outreach, more potential confusion, and it may be an all-or-nothing participation structure depending on your specific contract, worth reviewing carefully, possibly with legal counsel if anything is unclear. You may also hold Delta Premier status specifically, worth weighing whether keeping or dropping that matters to your situation, that's genuinely a mixed bag depending on your specific circumstances.
So step four sorted plans into buckets, step five sequenced the drop order. Step six: we work out our new fee schedule, though we won't actually implement it yet, that happens once we begin dropping plans, covered next week.
Here's the strategy. When you drop your first plan, we recommend making a global adjustment to your private fee schedule, and this is genuinely one of the more important moves in this whole process. If you're heavily in-network, say 80 percent, you're likely taking a 30 to 50 percent discount across the board, charging 140 dollars for a prophy but collecting 53 dollars in-network, or 880 dollars for a crown that normally runs 1,400 to 1,500 dollars privately.
The adjustment works like this: lower your private preventive and diagnostic fees down to the maximum allowable UCR, the out-of-network rate, for your largest bucket two plans. At the same time, raise your basic and major private fees to at least the 50th to 60th percentile, or higher, for your zip code.
Here's why. Picture a mom bringing her three kids in for cleanings, she's also a patient herself and has some major treatment coming up. Historically, every cleaning visit for her and her kids has been covered at 100 percent, she's never experienced a copay for preventive care. She has, however, experienced a financial conversation before for major work, a crown a couple years back, so she already understands treatment involving basic or major procedures comes with a cost conversation.
Once you go out-of-network and simply apply your full private fee to everything, including cleanings, she and her kids suddenly owe a real copay, say 300 dollars combined, for something that's always been fully covered. That's exactly the moment many practices lose patients, not over major treatment, where patients already expect to discuss cost, but over routine preventive visits, where they never have before. It also tends to rattle staff, who start hearing this reaction from multiple patients and generalize it into a bigger problem than it actually is, sometimes pushing to rejoin the network entirely.
By lowering your private preventive and diagnostic fee to match the out-of-network UCR maximum for your largest plans, that mom's cleanings, and everyone else's, stay fully or nearly fully covered, since that's exactly what the insurance company's own maximum allowable rate is. Yes, this technically lowers what your private, uninsured patients pay for cleanings too, but if you're 70 to 80 percent in-network, that trade-off is well worth it, this move only makes sense at that level of network participation, not if you're only 20 percent in-network.
Meanwhile, for basic and major treatment, that same mom is already comfortable with a financial conversation, so raising your private fee on crowns, fillings, and periodontal treatment to the 50th to 60th percentile or higher for your area doesn't create the same shock. If her three crowns run 4,500 dollars total and her insurance maxes out around 1,000 to 1,500 dollars per crown regardless, she was always going to have that conversation either way.
To determine what your actual private fees should be, several fee guide services exist, the AGD has one, but my longtime recommendation is the National Dental Advisory Service, sometimes called the Wasserman Guide, link on the episode page. They provide a percentile breakdown by zip code for standard CDT codes, 30th through 90th percentile. Being at the 50th percentile means half the practices in your area charge the same or less, half charge the same or more. We consistently find new clients sitting well under the 30th percentile without realizing it, usually because fees were set once, adjusted occasionally, and simply never kept pace with the actual local market over time.
Here's the math showing why this works. Take a practice that's 80 percent in-network, seeing 1,000 hygiene patients, with an average in-network reimbursement of 46 dollars per cleaning. That's 800 patients at 46 dollars and 200 private patients at, say, 120 dollars, totaling 60,800 dollars. Now lower the private fee to match a 96 dollar out-of-network UCR rate instead. Even though the private fee dropped from 120 to 96 dollars, the practice now collects 96 dollars across all 1,000 patients, insurance-covered and private alike, totaling 96,000 dollars, roughly a 50 percent increase in hygiene revenue, without taking a hit anywhere.
So going fully out-of-network with this fee strategy typically means preventive and diagnostic revenue actually increases, since you're now collecting the insurer's own UCR maximum instead of a heavily discounted negotiated rate, and basic and major revenue increases substantially, since your private fee for that category, often 60 to 80 percent higher than your old negotiated rate, now applies broadly. Most importantly, patient loss tends to be significantly mitigated, since nobody experiences a surprise copay on routine preventive care, which is where the bulk of patient attrition actually happens in a poorly executed transition.
All of this groundwork, before staff training even begins, next week's topic, means you go into dropping your first plan knowing exactly where you stand: every plan sorted into its bucket, sequenced in order, with your new fee schedule already calculated and ready. And you don't have to do all of this alone as the doctor, your office manager, financial coordinator, and treatment coordinator can absolutely help pull this together.
This genuinely works, and not just for smaller practices. I have a client in New York City with two large offices, fully 100 percent out-of-network today. I have another client with two associate-driven practices in Florida, both fully out-of-network as well. This is a genuinely achievable transition regardless of practice size.
So that covers the first six steps. Downloads from last week, along with links to the Get Out of Network Blueprint and the Fees and Plans Analysis, and this week's plan analysis worksheet, are all on the episode page. Next week, we'll cover exactly how to train your team and run the internal meetings needed before you start dropping plans, then walk through the actual sequence of dropping every plan in your practice and becoming fully fee-for-service.
I hope this was helpful. If you have any questions, 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.