Dropping Insurance Plans: The Agony and the Ecstasy

There is an old joke among entrepreneurs: “I lose money on every transaction, but I make it up in volume.” There are times when this principle applies to dental insurance reimbursement.  The insurance companies are actually making it easier for dentists to decide to drop insurance plans because reimbursement rates are low, especially in light of cumulative double-digit inflation over the last two years, which makes the cost of delivering services higher than ever.  You can only discount fees so much before profits turn to losses.

In spite of these economic realities, however, there are other considerations.  I listen to many recorded calls to dental practices (with the appropriate HIPAA announcement that calls are recorded for training and quality assurance.)  The most common opening question from prospective patients is, “Do you accept the XYZ insurance plan?”  If the answer is “No, we are not in network with that plan,” the phone call often ends abruptly.  It’s an insurance hang up, in more ways than one.

If you want to get off of insurance plans, do the following:

  1. Build up your fee-for-service practice.  If you truly want to have a niche practice, focused on quality and not beholden to insurance companies, then you need to create that successful brand before you start culling the herd.   Two ways of accomplishing this goal are by offering a strong mix of profitable services and encouraging your uninsured patients to refer their family and friends.
  2. Start by eliminating the plan that affects that fewest patients and provides the least reimbursement.  Assess the impact on your practice before dropping other plans.
  3. Provide sufficient lead time for the transition.  I do not recommend sending a letter to large numbers of patients telling them that you no longer accept their plan.  Instead, inform patients verbally and in writing as they come in for appointments that at a time certain in the future, the change will be made.  As new patients call, of course, they should also receive this information.  
  4. Train the team.  Using the right verbal skills is essential.  You want to be clear and confident with patients, not apologetic.  You are making the change to maintain high standards, which in itself is a benefit to patients.

There is a certain amount of agony and soul searching that goes into the decision to drop insurance plans, but the payoff is sheer delight—the ecstasy of not having fees dictated by a third party.  Some dentists have handled the transition poorly and harmed their practices; but, when done, correctly, the decision is liberating.  Dentists who have been fee for service for several years would never go back to the old way of doing business.

One caveat:  The process is fraught with landmines.  If you would like to have a complimentary conversation with me about this topic, feel free to contact me.

David Schwab, Ph.D. is a practice management consultant, coach, mentor, and seminar speaker.  Contact: www.davidschwab.com. (407) 324-1333.  dschwabphd@me.com

(This article first appeared in the Collier& Associates newsletter and is reproduced with permission.  I highly recommend this financial and business newsletter.  For more information, click here): https://www.collieradvisors.com/newsletter/information-and-subscription/