Some Things in Life Are Just Wrong: Don’t Let Your Insurance Participation Be One of Them!

So, you have been reading through your favorite Facebook group for the third time today, and you continue to see some very persuasive advice from your peers on the benefits of taking insurance within your growing orthodontic practice. You also notice there are some doctors who are adamant that insurance participation is terrible, and only the weak submit to insurance companies and choose to participate! Therefore, the question becomes, who is right, who is wrong, and is there a middle ground?

As an orthodontic consultant that specializes in start-ups and doctors who have been in a practice 8 years or less, I am going to shed some light on this debate. But before I begin, I would like to encourage you to have an open mind before you determine which Facebook group you will choose to side with.

Starting with the basics, let’s take a look at orthodontic insurance. As an orthodontist you have the choice to be an in-network provider or an out-of-network provider.  At its root, this is a fairly simple concept. Yet, it can complicated by changing demographics, administration and opinions within our industry.  If you choose to be non-participating, it means that you are forfeiting the right to be apart of the In-network crowd of doctors.  You are in turn considered out-of-network, and you will not be found on any insurance social sites; something that can be a marketing asset to growing practices. Being out-of-network can also decrease your ability to verify benefits for your patients or help them with their claims. This can also effect insurance collections, as you may not be paid directly by some of the insurance companies. Are you ready for the kicker? Some insurance companies will not pay a patient’s full orthodontic benefit to an out-of-network provider.

Of course, there are some positives to being out-of-network. Your practice will not have to provide the discounted fees imposed by the insurance companies on all in-network providers.  You will not have to run an insurance ledger, nor will you need to assist your patients with orthodontic billing. Ultimately, you do not need to abide by the rules and regulations of insurance companies, and are free to do as you please.  If this is everything you needed to know about insurance and this information has solidified your view on topic, no need to read further; you are free to carry on!

Now, if you are still reading and want to know why some of your peers would choose to participate with insurance companies, take discounts, and treat insurance participation as a marketing tool to stimulate growth in their practices, then allow me to further explain. When you decide to participate with an orthodontic insurance company, you are choosing to be an in-network provider, and you will have to choose which provider group fits you and your practice demographics best. The first group of providers is known as Premiere, but I call them the “Elite Provider.”  The second is what I like to call the “Popular Provider,” also known as Preferred, and the third group is what I refer to as the “Care and Share Providers,” better known as HMO or Medicaid.  Each one of these three provider tiers provides various benefits to in-network doctors and patients.

The Premiere provider is a common term in most insurance companies. This term generally means that as a Premiere Provider you will get the opportunity to negotiate your fees. This negotiation process typically requires you will submit your usual and customary fees. The insurance company will send back a Maximum Allowable Charge (MAC). The MAC is your negotiated fee from the insurance company; this is what your peers are talking about when they say “negotiate your rates!”  It’s important to know that Premiere is the only provider category that allows a practice to negotiate their fees.  A few notable benefits for this tier are: you can get MAC’s that are close to or the same as your usual and customary fees; you will be found on all insurance social sites (marketing); your patients will get their full benefits; and your practice will be paid these benefits directly.

The next group is the Preferred Provider tier.  This tier of doctors accepts a fee schedule. This fee schedule—set by the insurance company— determines the practice’s fees and cannot be negotiated.  As a Preferred Provider you agree to follow the fee schedule and pass on all corresponding discounts to the patient. These discounts are typically known as write-offs.  This plan holds the most advantages for a patient, as they not only get their full orthodontic benefit paid towards treatment, but in most cases, they get the additional insurance discount (a write-off) for going to a Preferred Provider.  The write-off or insurance discount is the difference between your usual and customary fee and the agreed upon fee schedule.

An orthodontic office obtains benefits from this tier because they tend to get the lion’s share of insurance participating patients. These practices tend to see a higher start rate because of the fee schedule’s price point and they are found on all insurance social sites.  However, the best part about this plan is that a Preferred Provider can pass along elective charges to the patient, as long as those charges go above and beyond basic metal braces. Here are some examples of pass along charges: Invisalign, SureSmile, Inbrace and specialty brackets. Because these treatment modalities are above and beyond basic metal braces, if a patient chooses them, you can charge above the fee schedule.

The last group is the HMO and Medicaid Providers.  This tier of providers agrees to accept the lowest reimbursement rates of all the fee schedules set by the insurance companies.  Doctors who choose to take these plans tend to rely on the quantity of patients referred into the practice by HMO and State plans. These patient in turn, make up a portion, if not all of their practice.   Patients that are on these plans can only see an HMO or Medicaid provider and in many cases need to qualify in order to get their orthodontic benefit or care paid for.  These plans are ideal for high volume practices, especially those that have a clinic setting model.

As you can see, each of these plans has pros and cons, and each doctor should choose wisely when picking the insurance plan and tier they are going participate with. Remember, each practice is unique, and when it comes to Facebook group advice on insurance participation, what might be terrible for one practice could be amazing for another.

Want to learn more about billing on in-network plans? Want to know how to get most out of your CDT billing codes? Want to know how to properly up-charge for elective procedures?  Sign up now for my webinar sponsored by Sesame on December 5, 2018.

— Jill Allen, Founder of Jill Allen & Associates