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Navigating Insurance Networks To Your Advantage

by Greg Maravilla, MBA, CPA, CFP® | March 7, 2023

A couple of clients have told me recently that they’d been getting 80+ new patients per month, which sounds great!  Of course the influx made them feel busy and hectic, but more patients is better…. right? 

Turns out, 90% of the new patients were Delta PPO patients.  The patients’ original office had gone out of network with Delta (and probably did a poor job of communicating it), so Delta’s nasty letter to patients spooked them and got them looking for a new office.  Unfortunately, if you are already plenty busy, getting a slew of new patients that bring in low reimbursement PPO rates is a curse.  It makes you busier, stresses your staff, puts the burden of verifying and filing insurance on your front desk, but most importantly, makes you very little money.  Oh, and it fills up chairs that could be occupied with cash patients. 

New cash patient calling in?  No, we can’t see you for a $150 cleaning because we have someone prioritized in front of you for whom Delta is paying us $75.  Do you think a Las Vegas casino holds open top-notch rooms just in case a high roller decides to come into town on a whim?  Yes, they do.  Because they know that’s how they make their real money, and the mere chance they could lose someone making million dollar bets is worth keeping that room open rather than giving it to an infrequent tourist. 

Contract insurance rates are roughly 40 to 50% off your list price (“UCR”).  Thought of another way, if you went out of network and got full fees, you could lose 40 to 50% of those insurance patients…and make the same amount of money seeing fewer people because you’d no longer be working at a discount. 

Going out of network may not be the best option if you have lots of open appointments.  But once you are busy enough, the solution isn’t another high paid associate to serve low-reimbursing insurance patients.  It's strategically and methodically going out of network.

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