Billing during practice transitions: Correcting the myths

Myth busting: It’s part of what we do. And circulating out there are a number of myths regarding how dental plans should be billed when a practice is in the midst of transferring ownership.

In a recent call to CDA, a dental office asked whether there is a grace period after a practice is purchased whereby the new owner can submit claims under the name, tax identification, NPI number and contract status of the previous owner. The office reported that among dentists in its community there is a consensus that such a grace period exists and that this period lasts six months. The truth is there is no such grace period wherein the new owner can bill dental plans under the previous owner’s name and contract after a practice changes title. How such a myth gets currency is a mystery, but it may come from the broker in the sale in an attempt to smooth the transition. But the point is, no, there is no billing plan based on a previous owner’s contract status.

The myth arises in another scenario: when a practice associate buys the practice. Here there’s often a similar assumption that claims can be sent under the name of the previous owner for a certain amount of time, particularly as the new owner is waiting for his or her submitted contracts to be processed. Again, the answer is there is no grace period in which a new owner can use the name and contract status of the previous owner in submitting claims to plans. An associate taking over a dental practice from the previous owner requires a new contract as the new owner, and this involves his or her own contract, tax ID number, NPI and whatever else a plan may require of an owner or billing provider.

What could be done in every situation involving a change in practice ownership is that the purchasing owner would contact the plans he or she wants to contract with — well in advance of the transfer of title to the practice. This will usually be two or three months. As the purchasing owner, you would start the process of contracting with the plans to let them know that you will be the new owner. You should find out how long the plans take to process submitted provider contracts and associated credentialing documents and defer the transfer of ownership to a date close to when the plans are expected to have their contracting process completed for the new owner. This deferral of transfer of title to the practice is something the seller and buyer can agree to on their own.

What the purchasing dentist doesn’t want to happen is to take over ownership of a practice and then wait two or three months for dental plan companies to complete the contracting process. A dentist isn’t contracted with a plan until they are contracted; that is, until the contracting process is completed. It’s during this gray-zone period that myths about “grace periods” emerge. Billing under the name of the previous owner is always technically fraud, but especially so if the previous owner had a better contract or better fee schedule than the new owner is expected to have.

If the sale of a dental practice is imminent, here are some things to consider:

  • As discussed above, a new owner cannot bill under the name or, that is, under the contract, of the previous owner.
  • Learn the contracting requirements of the plans that you, as the new owner, may want to participate with and learn them well in advance. Specifically, how long will the process take to make a submitted contract active? Two weeks? A month? Two months or longer? Start the contracting process prior to the sale to provide enough time for it to be completed close to the date when title of the practice transfers.
  • Communicate with patients during the transition of practice ownership. In addition to the incoming owner introducing himself or herself to patients in the practice, let the patients know that the incoming owner is working with the patients’ dental plans to become contracted providers with those plans if contracting is in the works. The contracting process may not be completed when the title changes, and problems with patients’ payments may be avoided by full disclosure. There may be a short period when the new dentist will be out of network, and that could mean a copay from the patient — or not. The new owner might want to accept payment as if they were in-network, limiting patient copayment amounts during this transitional period.
  • Call CDA to discuss the planned transition of ownership and particularly how plans can be expected to pay.

Dentists don’t make the rules when it comes to payment. Plans have their own policies. As I explain in my column in the September 2017 CDA Update, plans almost universally have switched to paying for who rendered care, not who the owner is, and will pay based on the renderer’s contract status. Also, policies may differ from plan to plan, so it’s important to contact them and determine what each plan requires. So, don’t bill inaccurately. Call the plans but also call CDA to discuss how to proceed with billing as a practice’s transition approaches.

To get connected with a dental benefits plan specialist with CDA Practice Support, call 800.232.7645.

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