Three Steps to Increasing PPO Insurance Reimbursements this Year

Christi BillquistBy Christi Billquist, Director of Operations for Unitas Dental

At a time when practices are stretched financially, this is an ideal opportunity to look at ways to optimize PPO reimbursements. PPO network agreements can be complex but understanding the lay of the land can have a major impact on your bottom line. In this article, we’ll cover:

  • Determining when your usual customary rates (UCRs) should be raised and how to price them appropriately
  • Understanding the fee schedule allowance and how it affects your practice
  • Discovering how PPO leasing arrangements may be hurting your reimbursements and steps you can take to improve them

When Should I Raise my UCR?

Perform an annual check of your UCRs (or office fees) and update any changes in your practice management software. When we do an analysis for practices coming on board with us, it's common to find a handful of codes where their UCR is actually lower than what some of the insurance companies are willing to pay. To avoid this, check your PPO fee schedules against your UCR to make sure that there's a healthy gap between what you're charging and what the PPOs are willing to pay. The Henry Schein Practice Analysis is a great resource for doing so. Based on data collected in your specific geographic area, it provides percentiles targets to help you set fees where you feel are comfortable and where they will be competitive.

As part of this analysis, consider what your patient base is. If your practice is mainly PPO, target your fees accordingly. This is an inflated amount that is going to reflect costs before discounts. If your base includes a large percentage of cash patients, it’s prudent to be a little bit more careful in raising your UCRs. For these patients, you may want to offer an in-house discount plan (for example, 20% discount off of UCR fees) or a membership plan (a set annual fee for services such as cleanings, exams, and X-rays and a percentage off any preventative). This is an effective way to attract patients who don’t have insurance, without running into the risk of downcoding. Note: Not all states allow membership plans, so check state regulations and insurance contracts before adopting this type of plan.

Tip: As a general guide, your fees should be at least double that of the PPO fee schedule.

How do Fee Schedules Affect my Practice?

Most insurance companies claim that they set their fee schedules based on data from Fair Health or comparable metrics. However, this data is collected from the UCRs dentists submit on their claims. The reality is that it’s up to all practices in your area to make sure that the fees being submitted to insurance are really a reflection of your cost of doing business. Your UCRs set the market fee and should reflect your actual costs, not just what you're willing to get reimbursed.

Direct Contract negotiation for PPO Reimbursements

If, for example, all dentists in an area submit a UCR of $100 for a procedure and a PPO is reimbursed only $30, the insurance company can't justify that large of a discount. However, if some dentists in that region are saying that their cost is between $20 and $100, the insurance company may be able to claim that $30 is a fair reimbursement. Submitting a low fee allows the insurance company to keep its rates lower. If everyone submits higher UCRs, this helps the whole industry.

Insurance companies may take your UCR into consideration and set fees and discounts based on that. Likewise, if you have low fees (especially ones that are at or below PPO fee schedules), the insurance company is likely to feel that you are being adequately compensated or over-compensated.


  • Adjustments: The difference between your office fees and the rate you have agreed to accept from a PPO
  • Direct Contract: Credentialed with a PPO to put you in network
  • PPO to PPO Leasing: One insurance company leasing its providers and network to another insurance company
  • Umbrella Network: A company that contracts dental practices on a fee schedule and leases them out to PPOs in their network
  • Write-offs: Revenue that you expected to receive and did not

Some practice owners mistakenly believe that higher fees will make write-offs higher. There is an important distinction between an adjustment and a write-off. A write-off is revenue that you expected to receive but did not, whereas an adjustment is the delta between your office fee and the rate agreed to with the PPO. The latter is not a write-off, as it is not money you expected to receive.

PPO to PPO Leasing Negotiations

Low submissions can negatively impact your potential for PPO negotiations. If you are submitting your PPO fee on a claim rather than your actual UCR, you could be inadvertently sabotaging yourself and your peers.

You should be submitting what your UCR is, not what’s on the fee schedule, and then adjusting off the difference between the two.

How Can I Improve my PPO Lease Arrangements?

PPO participation is a tangled web and is one of the most frustrating parts of coordinating benefits and claims. The first step in demystifying this is explaining the multiple ways that you can be in network. People tend to use the terms “leasing” and “networking” interchangeably, but it’s instructive to understand the differences.

A direct contract is when a practice signs a contract directly with an insurance company (such as MetLife) to be an in-network provider. PPO to PPO leasing is when one insurance company leases its providers and network to another insurance company. There are also a growing number of umbrella networks, such as DenteMax and Premier Dental Group. These are not insurance companies themselves. They contract with dental practices and lease them out to PPOs.

Umbrella Networks

For example, you may have contracted with Insurance Company A, who then leases your practice out to Insurance Company B. Even though you never signed a contract with Insurance Company B, you are considered in their network and claims can get repriced at the fee schedule agreed to between Company A and Company B. To understand your current in-network participation, look at your explanation of benefits (EOB) form. This will tell you if the claim is being repriced (meaning in-network), on what fee schedule, and which company it’s being processed through.

Pros and Cons of Leasing and Networking

The advantages of networking are that you have fewer contracts and can have higher reimbursements. It may seem counterintuitive that you would be paid more through a networking situation than as a direct provider, but leases are set up for those companies to access as many providers as possible, and sometimes that means paying you a higher fee schedule.

However, networking can be tricky for even the most experienced insurance coordinator or provider. One downside is that the relationship and/or hierarchy can change without notice and without your consent. Blue Cross Blue Shield of Texas, for example, operates through a conglomerate called Dental Network of America, and there are many ways that you can be in network with them. There is a hierarchy of practice that is typically based on fees. Also, participation isn't always straightforward, and can be extremely confusing for your front desk to keep track of, due to different fee schedules. Depending on your location, there are also some instances where the only option is through leasing.

It’s advantageous to work with a partner who can help you optimize how you are participating in these contracts. Choosing the right options may vary based on your state, your area of specialty, and other factors. Unitas Dental is experienced at helping practices navigate through these complexities and work these agreements to your benefit as much as possible.