Delta Dental of California Changes Enrollment Options
On the heels of Washington Dental Service and Delta Dental of Idaho making big cuts to the fees they pay providers, Delta Dental of California recently announced its new policy for dentists enrolling in Delta Dental for the first time.
California dentists who wish to enroll in Delta Dental’s Premier network must now also enroll in the Delta PPO network. According to the October 2011 edition of Update (a California Dental Association publication), this requirement may also apply to current Premier network dentists who open a second office location. Requiring newly contracted providers and those who open additional practices to enroll in Delta’s PPO plan could have a significant financial impact on both new and established practices.
Although dental PPO plans now represent over 65% of the dental benefits market, well-established Premier-only practices often retain patients who are willing to pay out-of-network fees. When a Premier-only dentist sells his/her practice, the value of the practice could drop significantly if a purchasing dentist is required to join Delta Dental’s PPO plan. All the services provided to current Delta PPO patients in the practice (which previously were billed at the provider’s Premier fees) will be limited to Delta Dental’s PPO rates when the practice changes hands.
California dentists who are planning to take on an associate dentist will also be impacted. In the past, Delta Dental of California has allowed an associate dentist to be paid the owner dentist’s filed fees with Delta. However, Delta Dental of California now requires all associate dentists to contract with Delta Dental directly. This means that associate dentists will now be required to sign up for Delta’s PPO plan if they want to enroll as a Delta Dental Premier provider. Allowable fees for services provided by the associate to patients covered by Delta Dental PPO will be capped at the lower PPO rates instead of the owner dentist’s Premier rates. This may be confusing to patients who need to see the Premier provider at times.
To illustrate the impact this could have on a practice, if a California dentist’s Delta PPO fees are 15% lower than his/her Premier fees, the value of a Premier provider’s practice in which 50% of patients have a Delta PPO plan could drop over 20% if the practice has previously averaged 65% overhead and collected $1,000,000 annually. That’s a big bite out of any dentist’s retirement funds.