Negotiate a better dental PPO fee schedule: 3 steps for higher revenue

Many dental professionals don’t even realize that they can negotiate their dental PPO fee schedule with dental insurance companies. While you might not always get the result you want, you should always at least try — and you’ll want to use these 3 practical steps to get started.

As an in-network dentist, you might feel like you’re at the mercy of the dental insurance companies when determining your fee. And while that’s technically true, there’s some flexibility — you can attempt to negotiate your dental PPO fee schedule. 

“It can never hurt to ask, especially if your payment rate is more than 20% lower than that of your regular fees.” –Dr. Bicuspid

If you read that and thought, “I don’t even know where to begin when negotiating my PPO fee schedule,” then you’ve come to the right place.

Our DCS Knowledge Network boasts 100+ dental revenue cycle management experts. Many of whom have decades of experience dealing with dental insurance companies. Most importantly for this article, they know about negotiating fees with insurance companies. 

So, we’re sharing the 3 steps they recommend for strategically negotiating with dental insurance companies about your PPO fee schedule.

Key takeaways when negotiating your dental PPO fee schedule:

• Know your own practice — is the dental insurance company’s current fee schedule causing you to lose revenue?
• Every dental insurance company’s fee negotiation policy is different — go into your talks with as much information as possible
• Seek advice from experts, such as your attorney and DCS Account Specialists

Step 1: Do your research — Prepare to negotiate your dental PPO fee schedule

As with every kind of negotiation, you want to go in with your eyes wide open. You need to do your homework and come prepared for your phone call with each insurance company’s provider relations department.

This includes gathering details about their PPO plan, along with financial data for your own dental practice, people in your area, and the surrounding dental businesses.

Every dental insurance company has a different policy about their fees and how they’ll negotiate them. Track down this information and review it until you know it like the back of your hand. Be ready for them to throw surprises or fine print your way.

Remember that in a PPO contract, you agree to not bill the patient for amounts above the agreed-upon maximum allowed, as listed in the negotiated fee schedule. Whether you, as the PPO dentist, are subject to fee capping depends on what type of plan and any state laws that may apply. So, it will also be helpful to know any fee capping laws in your state, so you’re aware of the limits, if any.

You’ll also want information about your area’s demographic. Consider questions like: What is the average household income? Is my area mostly families, young single people, or retirees and elders?

Finally, when negotiating fee increases, it helps to know what surrounding dental businesses are charging for their services, as well as the last time your fees increased.

If it’s been over 2 years since your fees increased, look at this example of a 2024 dental fee schedule from American Dental Care to see how your fees compare. Note that this is just one example — every dental fee schedule is different depending on the insurance company.

We can’t emphasize this enough — in these negotiations, knowledge is power.

Which leads us to our next step…

Step 2: Do the math — Arm yourself with numbers and facts when negotiating PPO insurance fees

Presenting to the insurance company raw data about your current fees will give you a much-needed advantage for success in this negotiation. You’ll gain confidence, and sounding like you know what you’re talking about will help you win the fees you deserve.

Here’s what our experts at DCS recommend when determining your desired fee: 

1. Print a report that shows all your current UCR (usual, customary, and reasonable) and office fees to compare to the proposed fee schedule. Your practice management software (PMS) will have this report. 
2. Take your 10 to 15 most commonly used fees and compare them to the proposed fee schedule, then calculate the percentage you’ll be writing off of each. No need to compare and calculate for the entire list. The values for your most common fees will probably apply to all of your fees. Finally, calculate the average write-off.
   • For example, if you determine you’ll be writing off 30% from your UCR to PPO fees on your most commonly used fees, that’s a really high write off. You’re aiming for less than 20%.
3. For this last step, print a report that shows total production of all patients from this specific insurance carrier and multiply it by the average write-off percentage.
   • For example, if your patients’ total annual production is $100,000, and you’ve found that you’ll be writing off about 30% of that, here’s the simple calculation to determine how much you’re losing: 30% x $100,000 = $30,000 that you’re writing off. That’s a lot of revenue that won’t go into your pocket.

Read more: Write-offs at the dental office: do’s and don’ts of writing off payments

Step 3: Do your best — Strategically present your case to the dental insurance company

If you discover that your fee schedule has items with unaffordable write-offs — remember, you want them to be less than 20% — let the insurance company know the specific codes they need to improve to keep your numbers under that 20% write-off threshold. 

As you negotiate, consider that the contract with your PPO plan most likely includes a non-disclosure agreement (NDA) that prohibits you and your staff from sharing its details with anyone outside your office.

Because of that, you cannot use information gathered from one insurance company as a resource or negotiation tool when speaking with other insurance carriers. Compartmentalize the information in your mind, and also in your reference documents.

Now, you’ve offered your information, and the insurance representative proposes an updated plan to you. If the proposed plan’s write-off percentages are still too high (20% or above) you need to determine where — or if — you’re willing to accept that reduction in revenue.

Here at DCS, we have seen dental businesses with cash flow issues who found their write-off was 40% — twice the recommended maximum! It’s no wonder they were wrestling with revenue.

Your own profitability is based on many factors, from effective systems to overhead to your production rate, but your profits are rooted in sustainable fees. If you can present why the insurance company’s proposed fees are not financially feasible for your practice, it’s more likely they will be open to negotiating a fair fee.

A DCS Account Specialist who has helped dental teams negotiate PPO fees several times told us: 

“I called the PPO Provider Relations Department and explained to them that our overhead is at 65% without the owner's compensation, and that the proposed fee allowance is too low at over 25% lower than our fee. We would have no profits!

I also explained that our existing patients would now be in-network, and we would have a loss there as well. The PPO representative was able to negotiate a more favorable fee allowance.”

And finally, that old saying stays true: “You’ll catch more flies with honey than you will with vinegar.” Stating your facts and figures in a calm, kind manner will greatly improve your chances of a beneficial renegotiation. You want to have a conversation, not a confrontation.

If you don’t try for more dental revenue at your dental business, who will?

To recap, here are your 3 steps for negotiating a better PPO fee schedule: 

• Step 1: Do your research — Prepare to negotiate your dental PPO fee schedule
• Step 2: Do the math — Arm yourself with numbers and facts when negotiating PPO insurance fees
• Step 3: Do your best — Strategically present your case to the dental insurance company

Remember, it never hurts to ask, and you’ll get the best results when you’re equipped with the regional facts and personalized figures that make a strong case.

And of course, when you’re working with DCS, you can always turn to the Knowledge Network for guidance when negotiating fees with insurance companies. 

Our end-to-end revenue cycle management services and solutions help dental businesses like yours collect what you’re owed from insurance companies and patients. 

Stand up for your dental business with experts on your side: Book a 30-minute consultation today.