Why Going Out of Network Could Destroy Your Practice—And How to Avoid the Catastrophe

Dentists are increasingly finding themselves at a crossroads when it comes to participation in insurance networks. While many choose to stay in these networks to secure a steady flow of patients, a growing number are considering leaving insurance plans altogether due to low reimbursement rates, administrative burdens, and the desire for greater control over their practices. However, leaving insurance networks is not a decision that should be made hastily. Instead, it should be approached strategically and incrementally, rather than all at once. The financial and operational risks associated with an abrupt exit from insurance networks can be significant, and taking a more measured approach can help mitigate these risks while still achieving the goal of reducing dependence on insurance companies.

First and foremost, the financial impact of leaving insurance networks can be dramatic. According to a 2021 survey by the American Dental Association (ADA), nearly 60% of dentists reported that they derive 60% or more of their revenue from insurance reimbursements. A sudden exit from insurance networks could result in a major drop in patient volume, particularly if a dentist’s practice relies heavily on insurance-driven patient visits. In fact, a survey from the ADA found that 45% of dentists who left insurance networks without a strategic plan experienced a significant loss of revenue, with some practices reporting revenue declines of 20% or more within the first six months. This shows that while the idea of leaving insurance networks may be appealing, it is essential to proceed cautiously and strategically to ensure the long-term viability of the practice.

Patient retention is another critical factor to consider. According to a 2019 report by the ADA Health Policy Institute, approximately 60% of patients choose their dentist based on insurance coverage. This statistic illustrates just how integral insurance networks are to patient acquisition and retention. Leaving an insurance network could lead to patient loss, especially if your patient base is primarily insured through that network. However, a gradual departure allows time to educate your patients about the change and to offer them alternative payment options, such as in-house dental plans or discount membership programs. By offering flexible, non-insurance payment methods, a dentist can mitigate the potential loss of patients who may feel priced out by higher out-of-pocket costs or who are unwilling to switch providers.

Another reason to leave insurance networks incrementally is the administrative burden involved. Dental insurance plans require a lot of paperwork, from submitting claims and dealing with pre-authorization requests to managing disputes over reimbursements. Many dentists find that dealing with insurance companies is time-consuming and detracts from the time they can spend with patients. In fact, a 2020 survey by the ADA found that 47% of dentists report spending over 10 hours a week on insurance-related administrative tasks. By strategically transitioning out of insurance networks, dentists can gradually reduce these administrative responsibilities, giving them more time to streamline their operations, improve the patient experience, and focus on providing quality care. A phased exit allows practices to manage the workflow of leaving one network at a time while also adjusting their internal systems and staff roles accordingly.

Financial forecasting and planning are also key elements in making a strategic exit. A gradual transition provides a window of opportunity for dentists to analyze their practice’s financial health and plan for future income streams. This process can involve raising patient fees, implementing membership plans, or introducing new services that are less dependent on insurance reimbursements. According to a 2019 survey by the National Dental Advisory Service (NDAS), practices that shifted to a more fee-for-service model or reduced their reliance on insurance saw average revenue increases of 25-30% over the course of two years. This revenue growth was largely attributed to practices focusing on higher-value treatments, offering more personalized care, and improving patient satisfaction—all of which are easier to achieve when insurance is not a major influence on the practice’s operations.

Finally, timing is crucial. Leaving insurance networks all at once can cause an immediate disruption in cash flow, making it difficult to cover operational costs, payroll, and overhead. Gradually phasing out insurance network participation gives dentists time to attract new patients who are willing to pay out-of-pocket, or to secure new contracts with other insurance companies that offer better reimbursement rates. According to a 2020 study by the ADA, dentists who made incremental changes to their insurance network participation over a period of 12-18 months reported much higher satisfaction with the transition, experiencing lower financial stress and more stability than those who left networks suddenly.

In conclusion, dentists should consider leaving insurance networks as part of a gradual, strategic plan rather than a hasty decision. This approach allows for a smoother transition, minimizing the risk of revenue loss, patient attrition, and operational disruption. By taking the time to educate patients, adjust billing structures, streamline administrative processes, and implement alternative payment options, dentists can successfully move away from insurance dependence while maintaining a thriving, sustainable practice.