How to Live With Insurance Companies and Still Have an Efficient and Enjoyable Dental Practice

Have you ever felt like the insurance companies own your practice and you just work for them?  If so, you aren’t alone.  In fact, many dentists simply work for insurance companies and don’t realize that they have subjected themselves to that role voluntarily.

Many practice management consultants and continuing education institutes constantly preach that you can have a practice that does not depend on insurance by concentrating on and appealing to only those patients who want only the best and can afford to pay for it.  However, I am sure there are lots of places where those philosophies are a little difficult, to say the least, to put into practice.

While you may not feel like you can convert your practice to an insurance free one, there are a number of things you can do to improve the way you deal with insurance companies and your patients when it comes to financial arrangements.

Let’s look at a couple of issues before we get into what to do about them.

First of all, many dentists have the preconceived notion that they will only be able to get their patients to do what the insurance companies will pay for.  If you believe this and try to gear all your “case presentations” based on that premise, then you are automatically limiting your practice income to what the insurance companies will pay.  Most insurance plans have annual maximums, and with this mindset, that is the maximum you can expect to collect from any one patient in a year.  While there are some patients that either absolutely don’t have the money to pay for dental care or don’t place any value on their dental health, many patients are willing to pay for extra or extended services when they realize that they really need them and they perceive a real value or benefit to having them done.  If you don’t present your true diagnosis of their needs because you don’t think they will buy beyond what insurance pays, then you have given up a potential source of substantial revenue.  More on this later.

Another issue is that many of the HMO and capitation plans pay, but they pay very limited amounts that are well below anything reasonable for your services.  The capitation plans particularly also restrict you from collecting adequate additional contributions from their covered patients, making the situation even worse.  However, I know of a group of several dentists who rely almost exclusively on such plans because they are working in areas where the local population is working at menial jobs in factories or other lower paying industries.  Those ultra-cheap plans are all that is available from their employers, and the doctors are actually making a decent living doing it.  How do they do it?

Another issue you must work with when governing your practice by insurance company policies is the trickery and “gotchas” that so many insurance companies engage in to avoid paying you.  Examples of this are such things as “recare (cleaning) visits are permitted no more frequently than six months apart” instead of “two cleanings per calendar year.”  That way, if you do a second cleaning only five months and twenty nine days after the first one, they have an excuse not to pay since you were one or two days short of six months between them.  This is the insurance companies’ way to guaranteeing that they never pay for more than two cleanings in any calendar year, and also coming up with a way in many, many cases to only pay for one.

Another “gotcha” is the provision to pay for a panorex or full mouth series only once in a two, three, or even in the case of some Guardian plans five year period.  Then of course, there is the common practice of selling a coverage plan to employees that claims to pay for a certain percentage of charges, usually 100% for exams and preventative work, when what they really mean is they pay a percentage of what THEY think is an appropriate fee for the work, not what you charge for the work.  This is extremely misleading to the patients, and can cause you a lot of stress as you try to explain to the patient why you charge more than the insurance company is telling them is reasonable.  To me, this is the most insidious practice insurance companies engage in because they are trying to convince the patients that you are charging them unreasonable fees for your work.  The insurance companies have no idea what your overhead is, what your work ethic is, nor what your skills are, and they are trying to relegate you to the lowest common denominator status or even less.

You will also find yourself going nuts trying to keep up with all the individual quirks of each insurance company’s plans as they differ on what is covered by deductibles and what isn’t, what is covered on their plan and what isn’t, what they consider basic and major compared to others who divide that classification differently.  Then you have the problems of determining what has been met or used in other offices, particularly for patients who come to you after a substantial part of the year has passed by.  Is it actually possible to keep track of and take all these varying quirks into account with every single treatment visit?  Do you have to check all these things out every time a patient visits before you do anything?  Even if you do, can you be sure you will still be paid?  Even the insurance company itself puts a statement on every pretreatment authorization that you send them for pre-approval that they do not guarantee that you will actually receive those benefits when the work is actually done – it’s only an estimate.  Here lies one of the key concepts that trips up so many dentists – estimates.  More on this later, too.

The last issue to discuss before getting into what to do to lessen stress, work and problems dealing with insurance is the recognition of the fact that if you agree to “accept insurance” you are agreeing to become the bank for the patients to borrow your money to pay for their services.  The worst part of this is that you compound this problem by assuming responsibility for the patient’s role in dealing with problems with the insurance coverages.  I realize that the majority of dentists feel like they have to accept insurance or their patients will go elsewhere, and if they choose to become a banker and collection agent in addition to being a dentist, then they should accept that role and try to deal with things in the best way possible to minimize difficulties.  Many dentists pay lip service to the fact that the insurance is a contract between the insurance company and the patient, not with the dentist except in some PPO and capitation plans.  In those cases, the dentist contracts with the insurance company to take care of their subscribers under specified terms.  How can you accept insurance and still keep the relationship between the patient and the insurance company correctly positioned?

For the balance of this article, I will assume that you accept insurance, and that the insurance is not the PPO or capitation type.

My first suggestion for you is to never, never use the words “patient portion” or “insurance portion” when discussing insurance coverages with your patients.  When you or your staff tells a patient that “this is your portion,” and the patient pays that, he or she thinks that they have finished their transaction with you.  If you don’t collect the exact amount you “expected” from the insurance company for whatever reason, it can be very difficult to get this patient to pay the remaining bill.  They will say that “you said this was my portion, and now you are changing your mind,” or “I thought that was all I had to pay and I can’t pay you any more.”

Instead of “patient portion” you should use the word “deposit.”  For example, you could say to the patient, “We estimate that your insurance company will pay X dollars toward YOUR bill, so we would like to collect a ‘deposit’ from you of Y dollars toward YOUR bill.  After we collect your insurance company payment, we will either bill you for any remaining balance, or, in the event we collected too large a deposit, we will send you a refund check for the excess.”  This creates the perception in the patient that the insurance payment is not necessarily known exactly, and that there may be more to pay later.  Do you see the difference?  By continually referring to the bill as their bill, and by referring to their payment as a deposit, they are made aware that this may not be all they have to pay.  Of course, where you have experience with the insurance company, or if the insurance plan is one in which you participate and it has known patient co-pay and reimbursement amounts, these deposits can be very accurately calculated.  However, you still need to make it clear to the patient that the bill is theirs and the insurance payments are subject to a contract between them and the insurance company, not you.  You should make it clear to them that if there is some problem with the insurance coverage, it is their responsibility to clarify and/or rectify it, and they will be responsible for the full bill after thirty days, or whatever other time frame you agree to.  You can explain that the insurance company has no contract with you, and consequently they don’t respond to your collection follow up unless you did something wrong in filing the claim.  In that case, it is up to you to fix the problem since you caused it.  But, if the insurance company is asking for proof that a dependent is actually enrolled in school, for example, the patient is the only one who can follow up on that.  The patient has no motivation to help you collect the insurance payment unless he or she is held responsible for the payment directly.  If there is a dispute over the coverage of a procedure, only the patient can discuss the contract terms with the insurance company.  You are wasting your time and resources to try and negotiate for the patient.  You can however, help the patient by giving them explanations of why you did X instead of Y, or the medical necessity of a procedure the insurance company is saying was not necessary and therefore not covered.  But, it is up to the patient to negotiate with the insurance company since it is their contract.  In fact, the patients who are dissatisfied with an insurance company’s plan are the only ones with any leverage to change that situation.  They can complain to their employer and ask for better plans, and the employer can definitely wield some heavy leverage with the insurance carrier.  In fact, many employers have an insurance coordinator just to help employees with problems with their insurance coverage.

To summarize this first point, you should always be sure that the patient understands (not just that you told them) that the bill is theirs, the contract with the insurance company is theirs, and that they will be responsible for the bill if the insurance does not pay what you estimate or expect by a certain time.  You should also always refer to the amount you wish to collect from your patient as a deposit and not as “their portion.”  Of course, where you have a contract with the insurance company to charge a certain amount or co-pay and accept their specified reimbursement, you may quote that as a co-pay and the patient really is finished with that transaction.  If you just do this, you will change the perception the patient has of their responsibilities and make your life easier, keeping the relationship between the patient, the insurance company and yourself in correct perspective.

Assuming that you have now implemented the philosophy above, how can you improve the actual process of collecting what you are owed?  Most dentists have been convinced by their software company and some consultants that they must send out bills at a certain time and they should also include “Patient Portion” and “Insurance Portion” on those bills.  If you have realized the validity of my first suggestion, you already know that you should never put those words on anything nor should you divide up the bill that way.  So what should you do?

Your software should be able to post charges to a patient’s account and let you collect a “deposit” from the patient.  You must make sure that you send out correct and complete insurance claims promptly, preferably by electronic transmission to speed up adjudication and payment.  Then, when you receive the insurance payment, you should be able to post that against charges as specified on the EOB (Explanation of Benefits) that comes with the check or by mail or e-mail if you are receiving payments electronically deposited to your bank account.  You then allocate the deposit money you collected earlier, and if there is an unpaid amount remaining, you can send a statement to the patient right then and there with a clear explanation of exactly what the insurance paid and for what, how their deposit was allocated, and what remains to be paid.  There is no need to divide “patient portion” and “insurance portion” (those nasty phrases) since this is now all the patient’s final responsibility.

What problems for you does this solve?  The biggest problem it solves for you is that it will eliminate all those calls you get when you send out statements to patients with “portions” divided up and they don’t understand why you sent them such a statement or what you are actually asking for.  It also saves you the postage and time involved in sending statements that are essentially wasted effort since the patient probably won’t be sending you anything then anyway.

If you think about it for a moment, you should never need to send statements to patients other than private pay patients or patients with insurance that has paid for your claims.  But wait, some doctors say!  Sometimes I can’t collect the whole “deposit” (don’t say patient portion) up front and only get half of it.  The patient promises to pay the other half in two or three weeks.  Well, if you filed a proper claim and there is no problem with the coverage, you should have your insurance payment within two or three weeks, particularly if you filed electronically.  You will be able by then to send the patient not just a statement asking for the other half of his deposit, but now the statement will be all the patient’s responsibility.  You can still send statements to your patients who don’t have insurance or who have no outstanding insurance claims if they do have insurance, and you can be sure that every statement you send is an accurate amount that each patient owes.  The point here is efficient and accurate insurance filing can make this flow possible, eliminating wasted effort and resources on useless statements and calls from confused patients.  You only send your patients two statements – one you give them at the time they check out, and one after the insurance pays.  Since many patients won’t care about having a statement at the time they check out, you may wind up only sending one, unless of course, they don’t pay and you have to follow up with collection statements.  So, if you are looking for software, make sure it can do this type of incremental billing and also this type of “open item accounting” for clarity without complexity.  If you already have software, which I suspect most of you do, then make sure to utilize this feature if it has it.  Don’t worry about “patient portion” and “insurance portion” billing.  It’s a bogus concept if you do things right.  It’s a bad concept even if you don’t.  Keep it simple and efficient.

The UCR issue is a tough one.  The mere fact that the insurance companies don’t use a commonly recognized public process to determine UCR, and the fact that they will not tell you what they base their fees on indicate that even they don’t believe they are treating you and their subscribers fairly, although they would never admit it.  If they were treating their subscribers fairly, they would be happy to tell you how they do it, or to at least provide you with a schedule of what they are willing to pay for various procedures.  I strongly feel that insurance companies should be forced to disclose their methods of calculating what they consider is a fair price, and in fact should be forced to use some commonly accepted standardized database of such information.  Instead, they deliberately choose to hide what they are doing in order to mislead their subscribers into thinking they have better coverage than they really do, particularly when compared to their competitor insurance companies.  Calling their plans a “contract” with their subscribers is unfair since they won’t disclose the terms of their obligations while they prescribe exact terms for the subscriber responsibilities.

You must explain to the patient who questions this issue that what their insurance company is claiming to be reasonable does not reflect the average charge by dentists with your skill levels and experience, but is more an average of all dentists, from brand new and inexperienced ones who charge less as they try to build a practice, to some who may charge more.  It is certainly possible to find a dentist who might charge only what the insurance company says is average or reasonable, but they may not have the skills and experience that you do.  You have to be careful not to characterize the lesser charging dentists as unqualified, skimping on cleanliness costs, or other such bad characteristics, even though we all know some of these dentists.  You should concentrate on why you are worth what you are charging.  Things like the extra care for cleanliness and sterility and your extra attention to their comfort are things that should be apparent to them just from your office’s appearance.  Be sure they recognize that.

While not something they can “see,” your skills and experience have significant value that shows in the quality of your work and the attention to complete care for their benefit that you give them.  No one minds paying a little more for quality work as long as they perceive value in what you are offering them, and they really care about their oral health.  If you lose a patient because of charging more than their insurance says is reasonable, then you are not delivering a perceived value for your services, or, more likely, the patient doesn’t really care about oral health and only wants the services they can get as cheaply as possible.  If that’s the case, you don’t want that patient anyway.  Those patients are the absolute first in line to sue you if they don’t think something worked out like they thought it should.

If you work in a clean, welcoming environment, treat your patients as if they were your guests and inform them of all that you are doing, you will be able to attract decent patients as long as you do quality work they are pleased with.  They will also refer others to you to replace the ones that don’t appreciate what you do.

In further advancement of the philosophy set out in the preceding paragraph, you should never prejudge your patients and try to build your treatment plan around what you think they will accept because insurance will pay for it, or at least a substantial portion of it.  In the movie “Pretty Woman” a few years ago, Julia Roberts went into some high class clothing stores where Richard Gere had sent her to shop, and she was immediately judged by her appearance as unworthy of their merchandise.  I have several dentist friends who have told me that they had really hesitated to present hefty treatment plans to people they had prejudged as unable or unwilling to accept such treatment, and were surprised when those people said “when can we get started” to those comprehensive plans.  If you approach your patients with the attitude of only working within their insurance plan benefits, you are from the beginning giving those patients permission to neglect their own health and you are doing them a great disservice.  I know of a dentist in California who was sued by his patient after he put in a less than ideal removable partial for a patient who later was talking with a friend who had implants and loved them.  The patient came back to her doctor and complained that he never told her about implants, and if he had, she would have chosen them rather than have that thing she had to flip in and out of her mouth to clean properly.  The doctor not only had to reimburse his patient for the RPD she did not want, but he lost a patient and a potentially good referral source at the same time.  All because he prejudged her and tried to accommodate her insurance only.

This is not to say that you don’t offer the patient alternatives that may fit into their insurance plan with less out of pocket for themselves, or that you can’t do some less than ideal things as temporary measures until the patient’s financial situation improves.  Just don’t block out opportunities to do better work for the patient.  Let them know what options they have, and if you can create the perception of value, you will be surprised by how many respond positively.  This is particularly true these days with things like extreme makeover on TV.  People see what they might be able to have, and many will opt for it.  The fact that many people, even those you would not believe could afford it, choose body enhancing cosmetic surgery over their health and other concerns should prove that to you.

That also brings up alternative financing opportunities.  I am sure you have all heard of Care Credit and other such patient care financing organizations.  If the patient sees the need for more comprehensive work than insurance will pay for, you can collect what you can from insurance and then spread out the balance over time for them with a financing organization.  If you are lucky enough to be working around the end of the year (Christmas present for example), you may have an opportunity to spread the work over two insurance years and collect more, and still finance the now smaller balance through the credit agency.  Remember, once you have things in a healthy position, maintenance costs go down, relieving the patient of ongoing costs other than the payment on the financing plan.  In addition, the patient feels good about himself and will adopt a more proactive attitude toward maintaining that healthy smile you have given him.  Also, many patients have credit cards that can carry a large bump in expense if it’s followed by a reduction in ongoing costs or bigger charges later when things get worse.  You have now collected more in a short period of time than you might have otherwise or never collected, or at least collected in bits and pieces over several years.  This leaves you more time to deal with the referrals that the happy patient will send your way and to do the same for them.

Earlier, I mentioned several doctors that are succeeding with practices limited to PPO, Capitation Plans, and/or Medicaid patients.  How do they do it?  First of all, if they are generally dealing only with patients who utilize those plans and don’t do anything they don’t cover, then they are probably located in an area where general overhead expenses are significantly reduced.  They may be able to hire assistants for $10 per hour instead of $18 or $20.  Their office administrator may be happy with $30,000 instead of $45,000 or more.  Additionally, they don’t have to have some of the fancier furniture and office décor necessary in more upscale areas.

While these things contribute significantly to reducing overhead, what they have really done well is figuring out a good “system” for routing the patients through the office, efficiently completing their work, and checking them out quickly and easily.  This is absolutely necessary since they must have a greater flow of patients through the office to generate the required amount of revenue.  A good computer system available in the operatories can go a long way toward efficient and most of all accurate entry of work done, eliminating the bottleneck at the front desk as they check out.  By good computer system, I mean one that can accurately chart your work with no more effort and time than writing it down.  If you have to write it down, someone else has to take the time to work with it again to enter it into your computer system for billing and insurance filing, not only duplicating work, but also introducing another opportunity for costly errors.  If you are going to rely on the computer in the operatory, you must be sure that your program accurately records all the information you need, eliminating paper back up, including your clinical notes, patient consent forms, and any digital images taken, including x-rays if you can afford the digital ones’ initial cost.  Simple signature capture pads are readily available for signing digital consent forms on the fly in the operatories for use with a good, clinically oriented practice management system.

A good dental software system can also capture important information such as date of prior placement of defective crowns or other prosthetics, and automatically include that on insurance forms when the “repair” work is completed, preventing costly rejections should someone at the front desk forget to manually add that information to the claim before sending it.  A good dental software program should also be able to clearly show that an MO and a DO on the same tooth could be two separate restorations and not one large MOD, although most can not.  This can be important for transmission to the insurance company showing exactly what was done rather than trying to explain it in words.  In most cases, the insurance companies don’t even read the extra notes and consider them for evaluating the procedures you have listed, so a picture or x-ray may be necessary to demonstrate what you have done and why.

For really smooth work flow, you need either a very good, clinically oriented dental software system, or a very well thought out and implemented paper system to communicate your work to the administrative side of the office.  That’s how the best dentists do it – lower overhead, a well thought out and implemented work flow methodology, and well-trained and intelligent staff to follow through on the plan.  The real key is to develop an efficient “system” that can continue to work even if one person is out for the day.  That’s how McDonald’s does it.  A system has been developed that allows someone else to easily step right in and fill in for the missing person.  Or, if someone moves on to another job, you can fill the spot with someone and fit them into the system relatively easily and quickly.

Hopefully, this little article has helped you develop a better way of working, or at least has you thinking about developing a better plan for your office.  It’s all a matter of psychology and mental attitude.  You, by your presentation skills and attitude toward your patients, control their perceptions of the value of your services, the true relationship between them and their insurance plans, and the importance they place on their oral health.  Of course, your staff must follow these same guidelines as well.  Your whole office must provide a united, caring and professional appearance and attitude toward the patients.  To do otherwise is a not only a disservice to your own practice, but also a disservice to your patients.  Think about it, and try your best to implement some of these ideas.  These ideas have less to do with changing what you are actually doing than they do with improving the way you do them, and more importantly, changing your patients’ perception of what you are doing and why.  You will all be happier, and your office will run more smoothly and efficiently.  It’s a win for all involved.

If you have any questions or want further ideas or information, please feel free to e-mail me at  Please be sure to include a subject line in your e-mail that includes “Dental practice questions” or something similar so I don’t lose it among all the spam I get.  A blank subject line will surely be rejected, as will such generic things as “Hello.”

Jay Altman

One Response to “How to Live With Insurance Companies and Still Have an Efficient and Enjoyable Dental Practice”

  1. Leland says:

    Really liked what you had to say in your post, How to Live With Insurance Companies and Still Have an Efficient and Enjoyable Dental Practice » Word of Mouth, thanks for the good read!
    — Leland