How group practices can successfully operate in a managed care environment
A majority of my coaching involves offices that are heavily involved in preferred provider organizations (PPO) or other managed care (MCO) plans. When I decided to dig deeper into this area of revenue management I was warned that I was contributing to the problem. By recommending ways for offices to bill correctly and efficiently I would be validating the role of PPOs in dental offices. The message was clear: keep telling offices that they should focus on quality and education and PPOs will go away.
Where are we now? In a heavily dominated PPO/MCO environment that group practices and offices have to acknowledge.
The PPO impact
Even if you are able to avoid participating in them you should still know the impact that they are having on your competition, and more importantly – your consumer. Some doctors still hold the opinion that they don’t have to worry about PPOs because they will never participate in their plans. However, most of these doctors are in the mid-to-late or late phases of their career and are solo providers.
Doctors who have associates aren’t as rigid. Perhaps in the past they were, but the realities of a practice sale, associates who want to be paid and local competition all factor into the makeup of the practice. Doctors just starting out are in debt of up to $350,000. One doctor I spoke with recently interviewed a new dentist who told him “I don’t care how many hours you want me to work – I have huge loan I need to pay off.” Into the mix let’s add our environment of large group practices (corporate or privately owned) that have systems efficient enough to take on large numbers of PPO/MCO patients.
Pull back a bit to look at the big picture: we can see a perfect storm for dental offices and insurance companies. Remember the three scenarios we discussed:
• Doctors who need to increase or maintain the value of their practices. Hiring associates does this nicely, but to keep them busy, PPO/MCO participation is needed.
• Large student debt is causing new dentists to sign up with PPO/MCO plans without considering ‘going it alone’ or strictly fee-for-service.
• Group practices can handle the volume of PPO/MCO enrollment lists and so don’t hesitate to sign up their offices. For some corporations this is a strategic decision.
I was once told by a colleague that this was resulting in a ‘race to the bottom’ when it came to quality care provided to our patients. I disagree wholeheartedly with this sentiment. Many offices are operating just fine in a managed care environment and have many happy patients.
The best teams will operate efficiently in several different areas: staffing, supply-side and billing environment. Practices that are staffed efficiently typically use four-handed dentistry (which is not as common in today’s start-ups as you may think), employ hygiene assistants and have team members that are also trained in specialty services. These services could include orthodontic assisting, 3D imaging, implant assisting and laboratory services such as model pouring and creating temporaries.
Efficient offices also do not have excess inventory in stock as this can be a huge drain on cash flow. Their ordering systems are set up well (sometimes with the help of the supplier) and are monitored according to a supply budget. Finally, billing efficiency has to be present, or all the hard work we just discussed is for naught. An administrative team that will expertly collect copayments and use online claims submission/eligibility checks will be ahead of the game. The goal is to avoid coverage surprises, and offices can only do that by checking benefits and eligibility. Using an online service to help with this can save valuable phone time that is better spent on new patient and treatment discussion calls.
As PPOs/MCOs continue to grow in popularity with employers, we as an industry should strive to understand their impact rather than waiting for the tide to turn. Managed care plans are here to stay for the near future. Even if you do not participate with them you will still need to monitor their local market penetration. Awareness of the issue is the best way to prepare yourself for any shifts in your environment.
By Teresa Duncan, MS, FADIA, FAADOM
Teresa Duncan, MS is President of Odyssey Management, Inc. and Dentistry’s Revenue Coach. She is an international speaker that focuses on recapturing and maximizing income opportunities for dental offices. Insurance and accounts receivable systems are her specialty. She also coaches managers to increase their practice’s profitability. She can be reached at [email protected].