Understanding the Foundation: Why Data Matters Before You Resign
Resigning from PPO plans is one of the most transformative decisions a dental practice can make. However, many dentists approach this critical transition with impatience rather than preparation. The result? They lose more patients than necessary and leave significant revenue on the table.
Think of resigning from PPO plans like running a marathon. A runner who attempts to run 26.2 miles without proper training rarely finishes well. They might have good intentions, life gets in the way, and they end up suffering through the race unprepared. The same principle applies to your practice transition.
The Preparation Principle
Some dentists get impatient and resign from plans before they're ready, thinking "I'm so done with insurance, I'm just going to leave." While we understand and respect that sentiment, the possible consequence is losing far more patients than you would if you were fully prepared. Are you willing to accept that consequence? Most dentists, when presented with this reality, choose to take the methodical approach instead.
The Three Critical Data Points You Must Gather
Step #1 to successfully resign from PPO plans is not about creating drama or taking action. It's about gathering essential data—three specific data points that will allow you to make informed decisions about the sequencing and timing of your plan resignations.
You don't resign from plans casually or in a haphazard manner. Instead, you strategically resign from one plan at a time, using data to guide your decisions. For reference, practices managing 34 PPO plans have successfully resigned from all of them in approximately two years, which averages out to about three plans every two months.
Data Point #1: Calculate Your Insurance Write-Off Percentage
The first critical data point is understanding your average insurance write-off—the difference between your UCR (Usual, Customary, and Reasonable) fees and your contracted fees with insurance plans.
Here's the sobering reality: Only 10% of dentists in the United States can calculate this number easily. The other 90% face challenges because they enter contracted fees directly into their practice management software rather than tracking the full write-off.
Why does this happen? Practice management software typically encourages entering contracted fees because it makes tracking your collection percentage easier—you see contracted fees matched against collections in a one-to-one ratio. However, this approach leaves you in the dark about your true write-off percentage.
Finding Your Write-Off Number
You have two methods:
- Method 1 (Ideal but uncommon): Enter your UCR fees and then adjust down when you receive the EOB (Explanation of Benefits). This allows you to pull a report from your practice management software showing your exact write-off percentage.
- Method 2 (Practical): Use an insurance write-off calculator (available at lessinsurancedependence.com) that gives you a ballpark figure accurate to within +/- 2%. This simple exercise takes just minutes but provides crucial insights.
When you calculate your write-off percentage, most practices discover they're writing off between 42-44% of their fees. But here's what matters most: knowing the actual dollar amount.
Your Write-Off Is Actually a Marketing Expense
Let's make this concrete with an example. Suppose your practice is writing off $400,000 per year to insurance plans. Here's the shift in perspective that changes everything:
Think of Your Write-Off as Marketing Spending
You are spending $400,000 per year on marketing. You might initially protest: "No, I'm not! That's a write-off, not marketing." But you are spending it, because you're paying the insurance company to provide you with patients.
Let's break down that $400,000 annual write-off:
- $400,000 per year ÷ 12 months = $33,333 per month
- That's your current "marketing expense" to insurance companies
Now ask yourself this critical question: Would you rather spend $33,333 per month on marketing or $1,200 per month?
The answer is obvious. And here's what's possible: when you reduce your insurance dependence and invest in proper digital marketing strategies, you can cut your marketing expense from $33,333 monthly to approximately $1,200 monthly—while generating more than 80 new patients per month. That's not just cost reduction; that's a complete business transformation.
Data Point #2: Insurance Write-Off in Dollars
While your write-off percentage tells you the proportion, the dollar amount is what truly hits home. If your practice is like most, you might discover you're writing off:
- $200,000 annually, or
- $300,000 annually, or
- In larger practices, $400,000-$500,000 or more annually
This is real money leaving your practice every single year. When you sit down and see that actual number for the first time, it's often quite sobering. That's precisely why understanding this data point is so critical before you proceed with resigning from plans.
Data Point #3: Impact on Your Practice's Future
The third data point involves understanding how insurance plans currently shape your patient mix, revenue, and practice culture. This includes questions like:
- What percentage of your patients are insurance-dependent vs. fee-for-service?
- Which plans generate the most write-offs with the least patient volume?
- How much of your staff's time is spent on insurance-related administrative tasks?
- What's your actual collection rate after write-offs on insurance cases vs. fee-for-service cases?
These insights help you strategically sequence your resignations to minimize patient loss while maximizing the financial benefit.
Why Timing Matters: Q1 and Q2 Are Optimal
Once you've completed your readiness preparation, the best time to begin resigning from PPO plans is in the first two quarters of the year (Q1 and Q2). This timing allows you to:
- Use the beginning of the calendar year to communicate changes
- Transition patients early in the year when they have fresh insurance benefits and less resistance
- Allow sufficient time to market and build your fee-for-service patient base before year-end
- Give your team adequate time to adjust to new processes
The Readiness Checklist: Before You Take Action
Before you resign from even a single plan, you need a readiness checklist. This isn't a nice-to-have—it's essential. The checklist helps you verify that everything necessary has been completed before you resign from your first plan.
A readiness checklist typically includes items such as:
- ✓ Write-off percentage calculated and documented
- ✓ Annual write-off dollar amount identified
- ✓ Patient communication strategy prepared
- ✓ Fee-for-service pricing structure established
- ✓ Payment plan options created for patient flexibility
- ✓ Digital marketing strategy in place
- ✓ Team training completed on new processes
- ✓ Financial projections reviewed for the transition period
- ✓ Key staff roles and responsibilities clarified
- ✓ Patient retention strategy documented
When you can check off these items, you know you're truly ready to transition your practice successfully with minimal patient loss and maximum profitability.
Moving Forward with Confidence
Step #1 isn't flashy or immediately action-oriented. It doesn't involve sending resignation letters or making dramatic announcements. Instead, it's about doing your homework, understanding your financial reality, and preparing your practice for success.
The dentists who take this methodical approach report far better results than those who rush the process. They lose fewer patients, experience smoother transitions, and ultimately build more profitable practices.
Your write-off calculator awaits. Are you ready to see the real numbers? Are you prepared to have the conversation with your team about transforming your practice? The answers to these questions are found in Step #1.
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Reviewed by
Naren Arulrajah
CEO & Founder, Ekwa Marketing
Naren Arulrajah is the CEO and Founder of Ekwa Marketing, a 300-person dental marketing agency that has helped hundreds of practices grow through SEO, reputation management, and digital strategy. A published author of three books on dental marketing, contributor to Dentistry IQ, co-host of the Thriving Dentist Show and the Less Insurance Dependence Podcast, and a member of the Academy of Dental Management Consultants. He has spent 19 years focused exclusively on helping dental practices succeed online.