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Managing PPO Participation in a Practice Transition By Nick Partridge
in-network or not). So, it makes sense to allocate time and resources to conduct adequate due diligence and a game plan for transitioning insurance during the acquisition process.
Do your homework
Practice transitions are incredibly involved. The process is emotional, oftentimes exhausting. Yet, adding a strong new dental practice to your group is incredibly rewarding. From courting through execution of the asset purchase agreement, this delicate dance is fraught with challenges.
However, executing the purchase is merely a milestone in a dynamic project involving many team members and trusted advisors. Having supported nearly 1,000 practice transitions as it relates to dental insurance, we noticed that at a certain point in the acquisition process, the focus turns sharply to cash flow. Planning for and protecting cash flow is critically important to every business. However, insurance company processes and timelines don’t universally allow for a smooth transition. Further, a payer’s recruitment focus, goals or policies may
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now materially impact the financials of your new practice. What could be worse than buying a practice and alienating patients and staff because you didn’t plan appropriately for how to transition insurance contracts? Additionally, what if you discovered that the practice will be significantly less profitable based on dental network changes? As a result, you must investigate, plan and execute to minimize disruption. Given that the majority of Americans have a dental benefit, a significant percentage of practice revenue comes from insurance (whether
JANUARY/FEBRUARY 2021 • EFFICIENCY IN GROUP PRACTICE
Every acquisition is a little different and the amount of information provided by the seller varies accordingly. We’ve seen transitions where the seller provides a few reports and notes from the office manager. In other instances, we’ve seen transitions where the seller allows full access to staff, records and the practice management system. Regardless of the information provided, when devising your plan, here is what you need to know: How is each provider contracted? Many years ago, when my company was just getting started, we completed a credentialing project for a transition in which the seller was retiring and therefore no longer intending to practice. The seller provided the buyer with an email list of the networks in which he believed he was contracted. That list was forwarded to us with the instructions to credential the buying doctor into these same networks. We happily completed the work and the provider was successfully credentialed according to the list. Approximately six months later, we received a call from a very frus-
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