Washington Dental Service Delivers the ‘Bad News’ to Washington Dentists
“The first step toward change is awareness. The second step is acceptance.”
Announced on April 6, 2011, Washington Dental Service (Delta of Washington) sent notice to dentists contracted on either or both Premier Plan or PPO plan that new reduced fee schedules will be implemented effective June 15, 2011.It has been estimated the overall reduction in fees will be approximately 15% or more – which in turn will cause a marked reduction in profitability and, therefore, personal income for dentists or specialists with significant WDS patients in their practice.
My clients in Washington State range from having 21% to 62% WDS patients in their active patient roster. The “new” fee schedule or schedules if dentists contract for both plans are available on the WDS website. To project the implications to their practice, dentists will need to determine what dollar amount of business they are doing under either or both plans and then estimate the percentage reduction in their fees compared to their current filed or PPO fees.
Many dentists are speaking about dropping WDS, sending a series of well-crafted letters to patients explaining their position, figuring to “take the hit” for about a year until they fill the gap with fee-for-service patients. But when you consider how many fee-for-service patients are truly available, against how many WDS patients make up the market, layered onto our current national economic conditions, it doesn’t pencil out.
Meanwhile, in many other states, not only are the Delta’s making this same move, but so are many of the major carriers. Like airlines, when one raises or drops fees, others follow.
What can dentists do? One, they can drop their WDS plans, work on expanding their fee-for-service patient population and make overhead and staffing adjustments depending on their revenues. Two, dentists can adjust their practice by figuring out how to work in this new restricted fee environment through increasing patient volume, expanding number of providers and increasing access. Or three, they can create new possibilities such as forming local or regional MSO/DSO corporations that can operate at a reduced overhead of 15% or greater, along with greater number of providers and hours for increased revenues.
If you look at the medical model, the latter is exactly what happened to them when their reimbursements got pinched. Their response was to coalesce practices into large groups, hire professional business management, and cut deals directly. Will this occur for dentists? Yes, for some this is the future.