The reimbursement crisis is real. What are you doing about it?
Because reimbursement for dentists and their teams is such a challenge, methods are being developed to help them collect what is owed to their practices more easily.
Dental insurance continues to be difficult for dentists and their office teams to navigate. Dealing with traditional dental insurance is becoming only more complex, with endless time dedicated to paperwork, back and forth communications, and other manual tasks that increasingly distract your team from patient care.
Chasing down reimbursements; understanding the intricacies of exclusions, waiting periods, and preapprovals; submitting appropriate documentation; and filing claims for reimbursement are just a few of the many responsibilities required for each patient visit. As cumbersome as these processes are, if any are not attended to, your office runs the risk of not being compensated for its services.
From a business perspective, it’s not news that insurance reimbursement is top-of-mind for dentists. According to a Bankers Healthcare Group survey of over 400 licensed dentists, 72% said declining reimbursement rates is their number one concern.1 This statistic is indicative of an immediate need to better address the financial relationship between dentists, patients, and insurance companies.
It’s a crisis
Welcome to the reimbursement crisis. As reimbursement rates continue to decline, dental practice owners are becoming desperate. For example, reimbursement fee negotiation is now becoming a thing for practices that are feeling the pinch. In January 2019,ADA News identified this up-and-coming trend, and reported more and more practices are outsourcing fee negotiations to dental reimbursement consultants.2 Independent practices are hiring these types of resources as liaisons, hoping these consultants can secure better rates. The goal for these types of resources is to negotiate higher reimbursement fees than what practices are currently receiving on their own.
This tactic may seem like a positive development on the surface, but it will not address the core issue in the long run. You have to ask yourself: Are these efforts truly enough to help boost overall practice profitability and performance, not only now but in the future? Is leaving the success of my practice in the hands of an outsider really a good idea? Shouldn’t I take a more proactive role in increasing the long-term revenue and profitability of my practice?
Based on the research I’ve conducted on this issue, it is apparent that reimbursement is a long-term problem that is only getting worse. The reimbursement model has been in a slow, downward spiral for years. Dental insurance has become very one-sided and designed around the needs of the insurance companies, not dentists or patients. When you consider the fact that $75 billion is spent on dental insurance every year, and that only 60% of this goes toward actual dental care, it’s easy to see who the real benefactor of the dental insurance ecosystem is.3
What the research shows
As I mentioned, I often describe the current situation as a “reimbursement crisis.” I’ve conducted extensive market research, and what I’ve learned is that this struggle for dentists—to get paid fairly for the work they do and to collect what they are owed—has been going on for more than two decades, if not longer. In fact, from 1990 to 2015, the dental industry grew 70%, yet dentists’ earnings remained flat.4 How could that be? According to the May 2016 “ADA HPI Report: An analysis of dental spending among adults with private dental benefits,” one reason is that the fees paid to dentists by insurance companies are significantly lower than market fees.5
Clearly, this is an unsustainable situation for dentists, and unless they take action, the situation will only get worse.
However, there are a number of alternative profit-generating solutions for dental practices to consider. You could offer patient financing options to help reduce accounts receivable and lower risk of bad debt. You could upsell existing patients on optional services such as teeth whitening or aligners. You could incorporate additional services to your already existing offerings. Or you could build a referral program with specialists in your area and set up a revenue share.
Another simple solution that has been gaining popularity among dentists is to design and implement your own dental membership plan and offer it to uninsured patients. You have the ability to customize a plan that fits the needs of your patients and practice. Practices set the subscription prices and have full control over the treatment protocol, fee schedule, and any discounts being offered for restorative procedures.
The bottom line is, dentists do not have to be passive during this reimbursement crisis. There are opportunities for practices to be proactive and combat stagnant and declining revenues that are the result of accepting dental insurance.
Dave Monahan is CEO of Kleer, an advanced cloud-based platform that enables dentists to easily design and manage their own membership plan and offer it directly to patients. Monahan’s advocation for subscription-based dental care led to the founding of Kleer in 2016 and phenomenal growth in Kleer dental practices and membership since its pilot launch in September 2017. For questions about the reimbursement crisis and Kleer dental membership plans, reach out to email@example.com.
1. Garrity M. 88% of dentists are most concerned about patients’ payments: 5 statistics. Beckers Dental Review website.https://www.beckersdental.com/benchmarking/34182-88-of-dentists-are-most-concerned-about-patients-payments-5-statistics.html. PublishedNovember 1, 2018.
2. Burger D. There’s a way to negotiate for potentially higher reimbursement rates. ADA website.https://www.ada.org/en/publications/ada-news/2019-archive/january/theres-a-way-to-negotiate-for-potentially-higher-reimbursement-rates. Published January 11, 2019.
3. State of the U.S. Dental Market: Outlook 2018. ADA website. https://www.ada.org/en/science-research/health-policy-institute/publications/webinars/state-of-the-us-dental-care-market-outlook-2018. Published November 2017.
4. Munson B, Vujicic M. Dentist earnings were stable in 2015. Health Policy Institute research brief. ADA website.http://www.ada.org/~/media/ADA/Science%20and%20Research/HPI/Files/HPIBrief_1216_1.pdf. Published December 2016.
5. Yarbrough C, Vujicic M, Aravamudhan K, Blatz A. An analysis of dental spending among adults with private dental benefits. ADA website. HPI Health Policy Institute. http://www.ada.org/~/media/ADA/Science%20and%20Research/HPI/Files/HPIBrief_0516_1.pdf. Published May 2016.