Managing the financial health of a dental practice is a top priority, and negotiating PPO reimbursement rates can have a significant impact on profitability. The question many dental providers face is whether to hire a professional dental PPO fee negotiator or attempt to negotiate directly with insurance companies. Below, we explore the cost-effectiveness of each approach.

Negotiating PPO Fees on Your Own

Pros:

1. No Upfront Costs: Handling negotiations yourself eliminates the need to pay external consultants or firms.

2. Direct Control: You maintain complete oversight of the negotiation process and contract details.

3. Potential to Build Long-Term Relationships: Communicating directly with insurance providers can help establish a rapport that may be beneficial over time.

Cons:

1. Lack of Leverage: Individual dental practices often lack the bargaining power needed to secure higher fees.

2. Time-Consuming: The process involves extensive paperwork, negotiations, and follow-ups, taking valuable time away from patient care.

3. Limited Industry Knowledge: Insurers have complex contract terms and reimbursement structures that can be difficult to navigate without specialized expertise.

4. Uncertain Outcomes: Without data-driven insights, your ability to maximize fee increases is limited.

Hiring a Professional PPO Fee Negotiator

Pros:

1. Expertise & Data Access: Professional negotiators have experience, market insights, and access to comparative fee data, greatly improving the chances of higher reimbursements.

2. Higher Success Rate: Many firms have established relationships with insurers and know the most effective strategies for increasing fee schedules.

3. Time Savings: Outsourcing negotiations allows dentists to focus on patient care and practice management.

4. Strategic Contract Review: Professionals can analyze contracts to identify hidden clauses, silent PPOs, and other factors that impact revenue.

5. Savings in General: Studies have concluded that doctors who are successful at negotiating their own fees usually pay their teams 3x more compared to using a professional fee negotiating who often have a more streamlined process to be more efficient at negotiations. 

Cons:

1. Fees & Commissions: Professional negotiators typically charge a percentage of the increase secured or a flat consulting fee, which can be costly. Always pick a firm that charges a flat fee in exchange for negotiating services. 

2. Less Direct Control: Since an external party handles negotiations, you may not have full visibility into the process. 

3. Variable Results: Not all negotiations lead to significant improvements, and outcomes may depend on the specific PPOs and market conditions.

Which Option Is More Cost-Effective?

The answer depends on your practice’s size, current PPO contracts, and available resources.

• For smaller practices with minimal PPO participation, attempting to negotiate independently does require the assistance of your team members. Our studies have found that doctors end up spending 3 times more to handle negotiations on their own and the vast majority of the time, the negotiated fees are 10 to 20 percent less than what a professional firm can get for you. 

• For mid-to-large-sized practices with a high percentage of PPO patients, hiring a professional negotiator is often more advantageous. The potential gains in increased reimbursement rates can outweigh the negotiation costs. Most large group practices and DSO's typically include PPO negotiating responsibilities as part of their Revenue Cycle department. Such would still require the assistance of a professional fee negotiating firm but in the long run, having your own in-house department that handles fee negotiations would be more cost effective compared to using a professional firm. 

• For practices struggling with low reimbursement rates and complex insurance contracts, an expert can provide insights that lead to long-term financial benefits.

Final Verdict

If your practice is well-versed in contract terms and has the time and resources to handle negotiations, going solo may be a viable option but has some risks in terms of cost to negotiate (payroll) and results. However, if maximizing reimbursements is a priority and you lack negotiation experience, hiring a professional PPO fee negotiator could provide a better return on investment.

Assessing your practice’s specific needs and weighing potential fee increases against consultant costs is key to making the best financial decision.