Here is another great post from our friend Sandi Hudson at Unlock the PPO.
Many dentists are already aware of the changes that recently happened with Delta in California. To summarize, new contracts with Delta in Cali are being required to participate at the PPO level as opposed to signing up as a Premier dentist only. This is the case even for associates who are hired at a practice that is currently Premier only. This created a huge issue for dentists in California who were buying practices from a dentist that was a Premier provider because the purchasing dentist was not allowed to sign up as a Premier provider. Why is this an issue? Because Delta PPO fee schedules are typically 15-20% less than the Delta Premier fee schedules. There are VERY few policies that are strictly Premier policies, the vast majority are PPO/Premier option policies. This means the policy is written so that the patient has the option of seeing either a PPO or a Premier contracted dentist but Delta pays the dentist at the lowest rate they participate with. For example, if a practice has $300,000 a year of Delta production with a Premier contracted dentist and a new buyer purchases the practice and is required to be a PPO contracted dentist rather than Premier, that $300,000 of production will get paid at about 15-20% less with the new owner than the previous owner. A new owner that is already challenged with practice and student loan debt can unknowingly realize after the fact that their Delta collections just got an automatic fee schedule decrease on the exact same production with the exact same patients because Delta will no longer allow them to sign up with the Premier fee schedule.
Up until recently this issue was isolated to California only. We saw a post on DentalTown a few days ago from a dentist buying a practice in Pennsylvania who was told the same thing, that they could not sign on as a Premier provider only, so my partner, Lisa, did some investigating to see if this trend has now expanded beyond California. Initially all provider relations reps in Pennsylvania indicated that this was NOT the case however after multiple discussions with a supervisor it turns out that it’s on a case by case basis. If an area doesn’t need a Premier provider (as defined by Delta) they can’t sign up for Premier only. In Pennsylvania, it will be the exception to the rule that a provider will be able to sign up with Premier only. If a doctor had not participated as a Premier provider in a prior location there is no chance at all of becoming a Premier provider only in Pennsylvania.
There are different regions within Delta and the Pennsylvania Delta region includes the following states: AL, CA, DE, FL, GA, LA, MD, MS, MT, NV, NY, PA, TX, UT, WV and District of Columbia . Our understanding is that the states listed above are the ones that may begin to limit participation choices.
Only 3% of all Delta policies are Premier only and these are more commonly small businesses who purchased the original policies decades ago. All policies that are being sold to new clients by Delta are DPO/PPO policies and they no longer have any incentive to add Premier providers and a strong incentive to add DPO/PPO only providers. We are seeking more details in writing and will post them as they come available. If you personally are told that you cannot sign up with Premier only, we’d encourage you to post that on this thread to help give early warning to all. When Delta’s own Customer Service and Provider Relations Dept in PA had no idea that there had been a massive change in their own business model until a query was made, it is likely this may occur in other states as these changes begin to happen.
How does this affect you?
- If you are purchasing a practice, particularly in one of the states listed above, and the selling dentist is a Premier provider only, get a Delta recruiter to put in writing that you can be strictly a Premier provider should you purchase the practice. If the area you are purchasing a practice is no longer allowing new contracts to be written for Premier providers then the value of the practice is no longer the same because all of the Delta revenue will be paid out on a lesser fee schedule after you purchase the practice. Do NOT take your answer from the provider relations department reps with a phone call. Get it in writing. The only thing worse than having your new practice’s Delta revenues downgraded is not knowing about it ahead of time and potentially overpaying for a practice.
- If you are a current owner dentist in one of the states listed above, are relatively close to wanting to retire/sell your practice and if you are a Premier provider then realize that the value of your practice may shift when you are ready to sell. If no Premier contracts are being written in your area, the value of your Delta production will not be the same for a new owner as it is for you.
If your Delta makes this move there are two choices moving forward. You can accept the PPO/DPO option and collect less for the same patients or you can choose not to participate with Delta which will cause all payments to go directly to the patient, requiring you to collect in full from your Delta patients.
We have unfortunately worked with several new practice owners in California who were not aware of these changes until after they purchased their practice. The potential impact is big so be sure the experts you are working with clearly understand the changing landscape.