07/09/2013

Member profiles: Ending dental plan participation


The loss of adult Denti-Cal, an overall drop in adults seeking dental care, the decline in the economy and real estate market, increased regulatory compliance, reduced reimbursement rates...these are just some of the challenges dentists face in their dental practices. At what point do members consider changes in how they practice or ask for help to make changes in their practices? What kinds of changes should they consider? How do they implement these changes and still maintain practice production and income? CDA has heard from members, those seeking assistance and those who offer up their own experiences. 

As part of a four-part series, CDA is profiling members who have taken different approaches to how they practice.

This is the account of two dentists, both practicing in San Francisco but with different patient bases. Six years ago, each dentist sought the services of the same practice management consultant. The consultant began by conducting a careful market and demographic evaluation of each dental practice to best determine what changes could be made in the practice to improve the care to their patients and the financial status of the practice.

In 2008, both dentists decided to end their participation as a contracted provider with dental plans. Both dentists, however, still submit claims on behalf of their patients and receive assignment of benefits for those dental plans that allow it. Five years have passed and both continue to operate on one fee schedule. Here is some background on each dentist along with the paths they traveled.

Stephen Ostwald, DDS, had a large general practice in San Francisco with three associates and a staff of eight employees in 2007 when he decided that he needed to make some changes. Today, he reports that he is a solo practitioner with less staff and a lighter patient load, lower overhead, fewer dental plan payment headaches and more time to spend on patient care. Additionally, he is able to spend more time focusing on continuing education and study clubs while maintaining consistent production in his practice.

Sam Thacher, DDS, opened his San Francisco dental practice in 2003 after working as an associate for a few years. Thacher reports that after becoming increasingly frustrated with stagnating reimbursement rates from dental plans, he began considering his participation as a contracted plan provider. Fast forward five years and Thatcher says he is no longer contracted with any dental plans as a provider; he is working 12 days less per year, volunteers more in his community; and his production and revenue stream remain consistent. 

Both doctors said that the practice evaluation process took approximately a year and included a thorough practice and market analysis to determine the plan/patient percentage breakdown. It also took that long to identify the plans that local employers were utilizing and to formulate assumptions about the potential percentage of patients who might leave the practice based on the contract termination(s). Financial projections were then made to determine practice viability to determine whether changes in fees would be possible.

According to the dentists, it took approximately one year to inform their patients that they would no longer be a contracted provider for the patients’ dental plans.  The consultant assisted them in developing clear messaging and helped train the dentists and their teams.  Both dentists said they personally informed their patients during their appointments that they had made a difficult decision to terminate their participation as a contracted provider with their dental plan. The dentists and their staff explained how much they valued their patients and this decision would not change the quality dental care to which they had become accustomed. Patients were informed that they would need to pay for services at the time of treatment and be reimbursed by their dental plan directly.

Both dental practices were prepared for a variety of patient responses to this news. Ostwald and Thacher said most patients understood the rationale behind the decision and stayed with the practice. Both offices report that patients had many questions and this provided an opportunity to educate the patients about their dental benefit plan. It was not without challenges, however, to some patients who could not afford to pay for their treatment at the time of service.  Both dentists said it was difficult for them to assess exactly how many patients were lost as the result of the dentists discontinuing as a contracted provider or because of the economic climate. In Ostwald’s case, he had additional factors to consider since he reduced his office staff by half. Thacher estimates that he lost 20 percent of patients enrolled in one particular dental plan over this change.

Thacher and Ostwald both said it is important to have one’s support team (in and outside the practice) onboard with the decision to discontinue contracting with dental plans. They said believing in a patient-centered practice and communicating this messaging to the patients in a clear manner was essential to maintaining long-term success for their practices.

Both dentists offered the following advice to becoming a strictly fee for service practice:

  • Evaluate your practice, including patient loyalty and satisfaction numbers.
  • The dental practice cannot be struggling financially if you are planning to make this type of change. Dentists may not be able to tolerate the initial drop in production. Recognize that it will take a year or two for your practice to stabilize. 
  • Be sure to discuss this decision with your spouse/significant other, since this could impact your budget and lifestyle. 
  • Work with a professional practice management consultant or another dentist who has made similar decisions and can provide tools, resources and a reasonable timeline for reaching milestones.




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