Navigating dental network status: PPO vs. Out-of-Network explained

Table of contents

1. Understanding PPO network participation
2. Understanding Out-of-Network status
3. Choosing the best fit for your dental practice
4. Combining In-Network and Out-of-Network approaches
5. Communicating Out-of-Network status to patients

Navigating the complexities of dental insurance can be challenging for both patients and dental practices. Among the various options, deciding whether to participate in a Preferred Provider Organization (PPO) or operate out-of-network is one of the most critical decisions a practice can make. Each option offers unique advantages and requires careful consideration of factors such as patient demographics, financial goals, and the practice's overall mission.

Understanding PPO Network Participation

“PPO participation" means providers have a contract with a specific health insurance plan or plans, agreeing to provide services at a pre-negotiated, discounted rate to patients covered by that plan. Providers who participate in PPO contracts are a popular choice among patients who have insurance. Being a participating provider can  be beneficial for practices aiming to attract a broader patient base, and potentially overall stability in patient volume. Below are key aspects of participating in a PPO network.

• Network participation: Joining a PPO network involves agreeing to set fee schedules established by the insurance company, allowing the practice to reach a larger population of patients who have insurance coverage under that PPO.
• Cost sharing benefits: For patients, PPO participation generally means reduced out-of-pocket costs when visiting in-network providers. Typically, insurance covers a set percentage of treatment costs, and patients are responsible for the remaining amount, often through copayments or coinsurance. This cost-sharing arrangement through dedicated “highest allowed amount” fees can make dental care more accessible to a broader audience.
• Provider directories for patient accessibility: Patients with PPO plans rely on provider directories, which list participating dental practices. This directory helps patients locate in-network providers, increasing the likelihood that they will select a participating practice and remain loyal to it over time.

Understanding Out-of-Network status

Operating outside of insurance networks can offer benefits that may appeal to practices focused on independence and personalized patient care. "Out-of-Network" means they do not have a contract with an insurance plan or plans, and can charge patients the full price for services rendered, potentially resulting in higher costs for patients who have PPO insurance plans. 

• Fee autonomy: When a dental practice chooses out-of-network status, it gains the ability to set its own fees without the constraints of insurance-mandated fee schedules. This freedom enables practices to charge fees that reflect their service quality, operational costs, and the individualized care they offer.
• Reduced administrative burden: Participation in insurance networks often comes with a high administrative burden, including claims processing, compliance with insurance policies, and preauthorizations. By opting out, practices can streamline these processes, allowing more time for patient care and reducing operational stress.
• Focus on patient-centric care: Without the limitations imposed by PPO contracts, practices that operate out-of-network have greater flexibility to focus on personalized care, developing treatment plans based solely on clinical needs rather than insurance stipulations.

Choosing the best fit for your dental practice

Selecting between PPO participation and out-of-network status is a strategic decision that depends on various factors unique to each dental practice.

• Patient base considerations: If a practice serves a large population covered by PPO plans, joining a PPO network could be beneficial to attract patients who prioritize in-network providers and lower out-of-pocket expenses.
• Aligning with practice philosophy: Practices emphasizing personalized, patient-centered care may find that out-of-network status better aligns with their philosophy. Opting out of insurance constraints allows these practices to prioritize the patient relationship over meeting specific insurance requirements. This of course may also affect patients negatively in a financial sense, which could be a conflict. 
• Financial viability and practice sustainability: The decision should also include a thorough financial analysis. PPO participation can drive patient volume but often at the expense of discounted fees. Practices should consider whether the increased administrative freedom and fee autonomy of out-of-network status align better with their long-term financial goals

Combining In-Network and Out-of-Network approaches

A practice doesn't have to exclusively choose between being in-network or out-of-network. Some practices adopt a mixed approach, remaining in-network for certain insurance plans while staying out-of-network for others. This flexibility allows practices to tailor their network participation to fit patient demand and financial objectives.

Communicating Out-of-Network status to patients

If you decide to operate as an out-of-network provider, it’s essential to communicate this status clearly to patients. Educating patients on the benefits of your approach—such as personalized care and transparent fee structures—can help alleviate concerns and enhance patient loyalty. Read our blog about how to effectively inform patients about your out-of-network status for additional support.

Determining whether to participate in a PPO network or operate out-of-network is a significant decision for any dental practice. By weighing the pros and cons of each approach, dental practices can find the network strategy that best aligns with their patient demographics, financial goals, and practice philosophy. Remember, combining both approaches may offer the best of both worlds, allowing flexibility to meet both the practice's needs and those of its patients.