Tuesday, May 6, 2014

Delta Dental of Arizona Cutting Reimbursements to Arizona Dentists

The Delta Dental of AZ website says, "...dentists are valuable partners in providing quality oral health care and Delta Dental is striving to find the right balance between the dentists, the companies and our enrollees to remain the leading dental benefits provider in our state."  The latest move in striving to find this balance is to reduce the reimbursements to Premier Provider dentists by forcing them into the lower paying PPO dental plan.  In a recent letter from Delta Dental of AZ, I was informed that the Premier Plan, of which I am a provider, is being retired and I have three options:

1. Accept the Delta Dental PPO contract fees
2. Become an exclusive provider - accepting ONLY Delta Dental insurance
3. Terminate my provider relationship with Delta Dental

In order to evaluate the decision of staying with Delta Dental, I decided to look to FairHealthConsumer.org to find out what a "fair" price is for endodontic procedures in my region.

Fair Health is a national, independent, not-for-profit corporation whose mission is to bring transparency to healthcare costs and health insurance information through comprehensive data products and consumer resources. FAIR Health uses its database of billions of billed medical and dental services to power a free website that enables consumers to estimate and plan their medical and dental expenditures.

As a consumer, this is what FAIR health says should be charged for endodontic treatment in my zip code.  If I have no insurance, this is what I should expect to pay.

According to FAIR health, the reasonable cost for a molar root canal in 85206 zip code is $1203.00

According to FAIR health, a typical dental insurance policy should expect the insurance to cover $601.50 of the root canal and I should expect an out of pocket expense of $601.50.

Now looking at the proposed reimbursement for an endodontist doing these three procedures, Delta Dental PPO wants me to reimburse at the following rates.
Molar RCT (D3330) 36% below the FAIR price
Bicuspid RCT (D3320) 41% below the FAIR price
Anterior RCT (D3310) 44% below the FAIR price
At SSE our current fees are BELOW the FAIR health fees for our area.
As a Premier provider with Delta Dental we are reimbursed at:
Molar RCT (D3330) 16% below the SSE Fee
Bicuspid RCT (D3320) 23% below the SSE Fee
Anterior RCT (D3310) 30% below the SSE Fee
If we become a PPO provider for Delta Dental, we will be reimbursed at:
Molar RCT (D3330) 31% below the SSE Fee
Bicuspid RCT (D3320) 42% below the SSE Fee
Anterior RCT (D3310) 48% below the SSE Fee
Looking at those reimbursements, Delta Dental PPO would become the worst reimbursing insurance company that we work with. As a business owner, at what point does it become non-profitable to see Delta patients? How does any business function at a 30-50% discount?  The obvious business answer is that you have to make it up the difference in volume which typically means a decrease in the quality of service.  (does corporate dentistry sound familiar?)

If you are a Premier provider, you may want to look at the numbers carefully.  If you don't contact Delta by written notice, you will automatically become a PPO provider on July 1, 2014!

If you are a general dentist, the Delta PPO want to reimburse you at the following rates:

Molar RCT (D3330) 54% of the FAIR price
Bicuspid RCT (D3320) 52% of the FAIR price
Anterior RCT (D3310) 51% of the FAIR price

As a company, who was initially founded by dentists in California, Washington and Oregon and has become one of the largest dental networks in the country, this move to cut reimbursements by forcing its premier providers into the PPO network does not seem to support the dentist.

If you are a dentist in another state that has been affected by Delta Dental cuts, what has been your experience?

If you are an Arizona dentist, what are you planning to do and how do you think it will affect your practice?

Some other interesting links regarding this pattern of Delta Dental to cut reimbursements to Dentists.

DentalTown Discussion regarding Delta Dental of Washington cutting reimbursements