Facing Lower Insurance Reimbursements: What Dental Practices Can Do

When you continue to see your collections drop while production remains the same or even grows, it’s time to dig into the numbers. We’ve seen clients whose write-offs have gradually increased by a couple of percentage points each year. That may sound small, but over time, it adds up to a significant impact on your bottom line.

As a first step, we often ask our clients to review their write-off codes and their accounts receivable, looking for patterns or recurring issues. If the drop in collections is in fact tied to lower insurance reimbursements, we then have our clients review the insurance profile of their practice. You can start by asking these questions:

• How many insurance plans do you take?
• How much production is associated with each insurance plan?
• What percentage of your patients are on each of your insurance plans?
• What are your collections with each insurance plan? (This allows us to review the percentage that is being written off.)

Having clear, data-driven answers to these questions allows you to approach the problem strategically. Once you’ve gathered the facts, you may decide to make changes internally or consider partnering with a preferred provider organization (PPO) negotiating firm. These firms specialize in navigating the insurance reimbursement world and can offer significant guidance and benefits for your practice.

Here are a few questions to consider if you are experiencing an increase in write-offs:

• Have you done a fee review recently?
• It’s important to identify where your fees stand in relation to dentists in your area. We recently spoke to a client who reviewed their fees and realized they were in the 30^th percentile!
• When was the last time you did a fee increase?
• With costs associated with supplies and labor continuing to rise, don’t shy away from fee increases. A “standard” 3% fee increase seems to be the bare minimum these days. We’ve had clients increase their fees between 5% and 10%. Some dentists are intentional with the fees they increase and may be strategic with their approach.
• How are the verbal skills of your team?
  Your staff fields a lot of questions from patients in regard to their insurance, financing needs, etc. How does your team handle them and could training or role playing sharpen their verbal skills?

By bringing in patients while squeezing your margins, insurance companies can be a double-edged sword. But even in the face of falling reimbursements, you are not powerless. With the right data and strategy, you can make informed decisions that protect and grow your practice. If you have questions about optimizing the financial life of your practice, our team would love to help you. Schedule a conversation with a practice integration advisor today!

Source: Economic Outlook and Emerging Issues in Dentistry Q4 2024 main report

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