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A BETTER PRACTICE


How to evaluate dental insurance plans

Roger P. Levin, DDS

HOW DO I MAKE DECISIONS

ABOUT WHICH DENTAL
INSURANCE PLANS TO ACCEPT?

Dental insurance has become

a major nancial factor in
dentistry and inuences all practices,
regardless of their participation.
Nevertheless, many dentists still
decide whether to enroll in a specic
insurance plan without a careful
analysis of the effect it will have on
the practice and its patients. At a
time when fewer adult patients are
seeing dentists, competition for
those patients has increased, and
insurance reimbursements have
declined, practices need to adopt a
more deliberate decision-making
process.1
COMPREHENSIVE AND DETAILED
ANALYSIS

An essential principle in the business world is to always analyze a

situation before making key decisions. Many doctors fail to take
this precaution when it comes to
dental insurance. A number of
young dentists enroll in every plan
availablehoping to jumpstart their
practiceswithout really determining whether or not each plan
will meet their needs. In addition,
some established doctors experiencing a decline in the number of
patients will enroll in one or more
plans as a strategy to increase production. After enrolling in plans
without proper analysis, many
dentists discover that exiting those
plans will actually damage the

practice. In other cases, they have

waited too long to accept specic
insurance, and the results fall far
short of their expectations.
To avoid these problems, dentists
should engage in a rigorous analysis.
It should begin with an evaluation
of the overall performance of the
practice, not only in terms of its goals
and budget, but also regarding its
existing insurance situation. This
analysis should include the following:
- amount of insurance revenue
as a percentage of total practice
revenue;
- revenue from each insurance plan
as a percentage of total practice
revenue;
- revenue from each insurance plan
as a percentage of total insurance
revenue;
- ranking of each plan based on
revenue;
- analysis of each plans reimbursements for participating
ofces versus the practices usual
customary fees;
- analysis of each plans reimbursements versus insurance
plans with which the practice is
already participating;
- ranking of insurance plans based
on reimbursements;
- determining the number of
patients in the practice who are
covered by each plan;
- percentage of all patients who are
covered by dental insurance;
- percentage of patients who are
covered by each insurance plan.
Other factors, such as amount of
staff time required for ling claims
and how long it will take to receive
reimbursements, should also be
considered.

This analysis will give the doctor

a clear understanding of the current
role of dental insurance in the
practice. This can then be benchmarked against practice performance
indicators such as revenue, production, and the number of new patients
per month.
THE ENROLLMENT DECISION

After completing this analysis,

the practice is in a much better
position to make a decision about
enrolling in a new insurance plan.
The prospective plan can be
analyzed in the context of the
practices current plans and ranked
in terms of reimbursements. The
practice should also calculate how
many current patients would be
covered by the new plan and may
convert to its coverage if given the
opportunity.
In addition, the practice should
make other projections, which,
though based on a certain amount of
guesswork, would be helpful in the
decision-making process. These
include the following:
- the number of new patients likely
to be attracted to the practice if the
plan is available;
- the number of patients who may
leave the practice if the plan is not
accepted;
- the effect that enrolling in a plan
will have on revenue, when current
fee payments are replaced by reimbursements from the new plan.
CONCLUSION

Enrolling in a dental insurance

plan should be based on a careful
quantitative analysis. This is more
important than in the past because,

JADA 146(6) http://jada.ada.org

June 2015 415

FEATURES

with patients more sensitive than

ever to the cost of dental care and
insurance companies paring reimbursements down to minimal
levels, miscalculations about the
impact of adding a plan could
have signicant consequences. To
continue providing the best possible
care to the greatest number of

416 JADA 146(6) http://jada.ada.org

patients, practices must analyze

plans in a businesslike manner. n

Disclosure. Dr. Levin did not report any

disclosures.

http://dx.doi.org/10.1016/j.adaj.2015.03.018
Copyright 2015 American Dental
Association. All rights reserved.

The views expressed are those of the author

and do not necessarily reect the opinions or
ofcial policies of the American Dental
Association.

Dr. Levin is founder and chief executive

ofcer, Levin Group, 10 New Plant Court, Owings
Mills, MD 21117, e-mail rlevin@levingroup.com.
Address correspondence to Dr. Levin.

1. A Profession in Transition: Key Forces

Reshaping the Dental Landscape. Chicago, IL:
American Dental Association; 2013:3,5.

June 2015