This is the hot topic in my home state of Washington since our largest dental insurance company recently slashed our filed fees by 15% or more on June 15th, 2011. Several offices I work with have called me asking for advice on how to deal with it now that even the non-PPO plans are working under a much lower fee schedule. Before I give my two cents I want you to understand the differences between using a fee schedule and using adjustments.
Let’s talk write offs
Offices using the write off system bill out the full fee for the procedure and then perform an adjustment (write-off) on the ledger to account for the difference between the office fee and what the contracted fee is with the insurance company. On their billing statements, patients see the full fee and also an adjustment showing how much money their dentist is losing by being a member of their PPO dental plan. Also, in the write off system, the dental insurance companies are automatically billed the office’s higher fee, rather than the PPO fee, which will help when the insurance company looks at how much of an increase to make to the fee schedule (even though we all know this hardly ever happens).
I love this method! However, the Dentrix Treatment Planner doesn’t work optimally with the write off method, and this can create some challenges for your team. So, it is important to know what your options are, so you can make the best choice for your office.
Here’s the challenge: If you are using your office full fee and doing write-offs, the Dentrix Treatment Planner has no way of knowing how to account for that difference. Your office team will be required to make hand written adjustments to the treatment plan estimate which can make it look unprofessional and messy. Also, it will be challenging to collect on the day of service since the ledger cannot accurately calculate the patient’s portion if the full fee is being posted to the ledger. Of course, even with this tricky calculator work, some offices still prefer to use this method. But you should know that there is another option – fee schedules - that can work really well for you in the long run.
Fee Schedules – a little bit of management but lots of benefits
The fee schedules system is the preferred method for offices that are contracted with multiple PPO plans. With this system, the office team must keep the fee schedules current, update the coverage table accurately and attach the fee schedule to the insurance plan properly.
The most frequent comment I get from team members when I discuss this method with them is “I want to bill my full fee to the insurance company and that is why I have never switched over to using fee schedules.” Great! You can bill full fees and still use fee schedules. I’ll give you more details on this in my next post, but for a preview - all you have to do is change the claim format to the DX2012F when you are attaching the fee schedule to the insurance plan (the F tells the Dentrix software to bill the fee schedule fee to the patient ledger and the full fee to the insurance company).
So what are the advantages of using fee schedules? Collecting at time of service is accurate on the ledger; the treatment plan estimates are accurate, so you don’t have to do any manual calculating; and the production for the day will show a net production number instead of an inflated production number. All of these are huge advantages for your team and your bottom line!
So, now you have the scoop: Both systems work, and there is no right or wrong way to deal with PPO plans – but there are pros and cons to each, so you should choose thoughtfully. Hopefully this post has helped you understand your options. Next week I will walk you through the proper setup of the fee schedule method.