How Can Dental Offices Absorb the Cost Increase of PPE?

As our dental offices begin to re-open, another challenge has begun to emerge; the response to COVID-19 is massively driving up costs, while production is artificially held down.  Many offices are reporting PPE costs 10-30x higher than they were a few months ago, with no end in sight for a return to normal.  While it is rare to see a dental office completely fail, there are many offices struggling under the impact of all these unforeseen changes and their associated financial implications. 

There are a variety of options available for a dental office to consider for managing the new costs associated with PPE requirements.

Raise Fees

The simplest answer is to raise fees across the board to cover the cost increase. This is a great option for OON or FFS offices. Most offices in the country however are heavily insurance based, therefore raising fees is not an option. So, let’s discuss some alternative options.

Drop Insurance Contractual Relationships

If network discounts and rules are the problem, one commonly discussed route is to drop some or all your network contracts. This action would enable an office to set fees in response to external dynamics and fluctuating expenses. The challenge with this option is maintaining their patient population.  Patients are often reluctant to go out of network, and this behavior becomes even more pronounced during a recession. 

Charge an Added Fee

The ADA just announced their determination that the insurance code #D1999 for “preventive miscellaneous fee” should be used as an “enhanced infection control” fee.  Now, many who have already tried this option have received a denial from the insurance company.  Understand this: The ADA makes the coding rules, not insurance companies. Insurance companies have the right to say what they will pay for, but not how codes are defined. YES, you can charge more for added or upgraded services.  You can do it in network.  We have been doing this successfully for years. 

The downside of an additional fee is how it is presented and what patient reactions will be.  If you lose 10-% of patients, it will likely be worth it.  Losing more and maybe not. Some insurance companies ARE accepting this code for enhanced infection control services and subsequently paying for it.  Some of the Delta Dentals have this option available, funding $10 per visit, see here: https://www.deltadentalct.com/dentist/dsp and https://www.deltadentalnj.com/dentist/dsp

Membership Plans

With many patients losing jobs and subsequently their insurance coverage, we will naturally see a lot of people seeking other options.  Membership plans can be a great way to attract non-network discount patients who can make up the difference. If your office already has a membership plan, you can easily add the PPE cost into it.

If you want to learn how to set up your own membership plan, this course offered by Chris Phelps and Drew Byrnes is awesome and currently discounted heavily: https://www.membershipmastercourse.com/dig  

Remove Other Expenses

If you have been offering a “free” warranty on your work, you could instead offer this protection through a 3rd party company.  Dental Warranty is a well-known company that offers long-term protection as an option for the patient. They will cover work up to 5 years anywhere in the US and remove that burden from the office, so you no longer need to conduct free replacement work that was not due to procedure errors. 

Miscellaneous Approaches

Modify an employee bonus program to reduce payouts or recognize a different variable.

Modify your in-house financing program (increase minimums, add an admin fee, etc.)

Start charging or increase charges for appointment cancellations. 

Incent more prepay payments to minimize or avoid cancellations and no shows almost completely.

Stop accepting certain credit cards (AmEx) which cost more; or add a CC surcharge.

Summary

There are a variety of ways to manage the increased costs of PPE without impacting your bottom line.  Find what is right for your office and take action. Please comment below if you have run across any additional actions which could be helpful for others to consider.