Practice Management
The Real Solution to Managing Insurance Reimbursements By Roger P. Levin, DDS
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ver the last 39 years, as both a dentist and CEO of a management consulting firm, I have observed patterns and trends in dental insurance. In an ideal world, dental insurance would at minimum offer increases in reimbursements to match overall inflation rates on an annual basis. However, at best, insurance companies are inconsistent at raising reimbursements and, in some cases, are actually lowering them. This has an immediate impact on dental practices since the majority today participate in at least one or more dental insurance plans.
The Effects of Stagnant Reimbursements For the purposes of this column, let’s assume that most insurance companies do not raise reimbursements on an annual basis (or very frequently at all). Dentists fail to understand that, from a financial standpoint, a lack of insurance reimbursement increases moves the practice backward. For example, if inflation stands at 4%, but insurance reimbursements remain flat (or decline), the practice will effectively recognize a 4% (or greater) loss on the insurance revenue it receives. If inflation increases, the picture gets even worse. If there is an increase in overhead, as there was in 2022 and 2023, then that also reduces profit by the amount of the overhead increase. This erosion of practice profitability is compounded when insurance companies reduce the reimbursement rates for procedures. Although this is not good news, and dentists are well aware of this scenario, there are solutions that are highly effective. Many practices are performing at excellent levels even while participating in dental insurance plans.
What Is the Answer? As a dentist who practiced full time for 10 years, I understand that no dentist ever wants to hear they should increase patient volume to keep up with inflation and overhead and increase practice profitability. For most busy practices, the idea of increasing volume comes across as having to work harder and be more frenetic, which will cause increased stress and fatigue. But there is a better way to increase volume, production and profitability while actually decreasing stress. First, understand that the solution to a lack of increase in dental insurance reimbursements is to in fact increase patient volume. You can work to reduce overhead, but that is a shortterm gain, and you can typically only reduce it by about 3%–4%. Once those reductions are made, you cannot reduce any further. But you can increase patient volume — which will lead to higher production — in a way that makes the practice more enjoyable, easier and streamlined.
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Here are some strategies: • Build the right schedule. I repeatedly see practices with schedules that have been designed to keep them exactly where they are without realizing it. I recommend mathematically analyzing your schedule in areas such as production, production per new patient and production per hour. You should then apply procedural time studies to determine the real amount of time that is necessary for each procedure. The goal is to establish key step-by-step systems that maximize efficiency. Many practices have a scheduling system that limits the practice’s ability to have enough volume to reach improved levels of practice performance and production. • Procedural time studies. It is critical to regularly perform procedural time studies. My company recommends a minimum cycle of every three years due to advances in supplies, materials and technologies. A procedural time study is a process in which you time your most common procedures at least 10 times to develop a composite average. We find that, in most cases, practices recognize that they do not need as much time as they are currently allotting in the schedule. A savings of 10 minutes per hour per day in a four-day practice will increase the available doctor production time by the equivalent of two months per year or six years in a 36-year career. Small time savings add up immensely on an annual basis — and certainly throughout a career. • Delegation. Once new systems are implemented, they must be taught to the dental team. One key to increasing volume is delegation. A good litmus test is to examine whether a dentist is performing procedures that are legally allowable by other staff members. Another is to determine if a dentist is consistently receiving numerous questions from staff members during the day. Both of these scenarios indicate that delegation is not at the right level and that the team is capable of handling more tasks and making more decisions, thus allowing doctors to focus more on patient care. This reduces stress and fatigue while increasing patient volume. • Recognize the value of new patients. We find that the average production per new patient is approximately two to three times higher than that of a current active patient in the first 12 months. Although all patients should be treated with extreme respect and customer service, the new schedule you develop should block time for the right number of new patients per month to ensure that higher-level procedures and more comprehensive dentistry can be performed. ♦
Roger P. Levin, DDS, is the founder and CEO of Levin Group, a dental management consulting firm. To receive his Practice Production Tip of the Day, visit levingroup.com. To comment on this article, email impact@agd.org.