PPO Insurance Plan

This is an In-network / Contracted Insurance Plan Type. PPO stands for Preferred Provider Organization.

Set up this Insurance Plan Type when you are contractually obligated to reduce your fees as an in-network provider. Because you are enrolled with the insurance company, you have access to a published list of fees that you must charge the patient. The insurance portion is calculated as a percentage of the published fee and the patient pays the rest.

There are two setup options: one tracks write-offs, the other doesn't. Write-offs are the difference between the contracted fee and the provider's UCR fees.

  • If a patient has both primary and secondary insurance and you want benefit estimates to be more accurate, you must set both up as PPO Percentage (Option 1).
  • To set up a plan that has co-pays and makes supplemental payments (mixed capitation), see HMOs/DMOswith Supplemental Payments and Copays instead.
  • To see how the fee schedule is determined, see Fee Schedule Logic.

Option 1: Set up a PPO plan and track write-offs

Set up an insurance plan with a PPO Percentage plan type and the carrier fee schedule. This plan tracks write-offs.

On the Insurance Plan, select these options:

Insurance estimates will be based on the carrier's fee schedule.

Procedure fees will be based on the provider's fee schedule.

Write-offs are usually calculated using the following formula: UCR fees - PPO fee The difference between the two amounts will be an automatic write-off.

Typically, if the PPO fee is higher than a provider's UCR fee, the PPO fees are used as the billed fees. To instead use the UCR fees, see Account Module Preferences.

You don't have to check the Claims show UCR fee, not billed fee because the provider's UCR fees already show on claims. The correct insurance estimate (breakdowns) will show in the account after the claim is created.

Write-offs are reported in Production and Income reports, the Daily Write-off report, the PPO Write-offs report, and the Receivables Breakdown report.

Option 2: Set up a Category Percentage plan and don't track write-offs (not recommended)

This is a simpler approach for an in-network plan but doesn't track write-offs. It is not recommended for a few reasons:

Set up an insurance plan with a Category Percentage plan type and the carrier fee schedule. The carrier fees will be used instead of the provider's fees. One disadvantage is that patients will not see the provider's fees and may not be aware that a discount is being given.

On the Edit Insurance Plan window, select these options:

Patient Co-pays for Procedures

If the patient is required to co-pay for procedures, follow these steps.

  1. Create a copay fee schedule for the carrier.
  2. For each procedure code, enter the patient's copay amount. There can be just a few fees with the rest blank. If you only have the insurance copay fee schedule, not the patient copay amounts, use this equation to obtain the fee:

    Carrier Fee - Insurance CoPay = Patient CoPay

  3. On the Edit Insurance Plan window set the following:
    • Fee Schedule: The carrier's normal fee schedule.
    • Patient Co-pay Amounts: The carrier's copay fee schedule.

    Benefits: Usually you will set all percentages to 100% so that everything above the copay is calculated as the insurance portion. If you do not set percentages to 100%, percentage calculations will be performed on the remaining amount.

Note: When insurance pays off a lower fee schedule than your normal contracted fee schedule, and patient pays the difference, create a co-pay fee schedule. The co-pay fee schedule is the normal contracted fee schedule minus the lower fee schedule.

PPOs with fee schedules that change after first year

These can be easily handled by using two insurance plans: one for preventive services, and one for basic services. These will need to be updated manually after the first year so that estimates etc. are monitored closely during the transition to the second year, when benefits will have to be updated in Open Dental.