Most PPO decisions get made on feel. A fee schedule update lands, the crown fee drops again, and the owner announces at the morning huddle that the practice is done with that carrier. Six months later the hygiene schedule has holes in it and nobody is sure whether the decision helped.
It does not have to work that way. Whether to leave a plan is a question with a numeric answer: will the practice keep enough patients, at full fees, to beat what it earns from that plan today? You can estimate that from data already sitting in your practice management software. This post shows how, with a hypothetical worked example you can copy.
Key takeaways
- The right question is not "is this fee too low?" but "what share of these patients do I need to keep, at full fee, to come out ahead?"
- Start by calculating write-offs per patient and per plan. One plan is often far worse than the rest.
- Compare contribution (revenue minus variable costs) rather than revenue. That gives you a break-even retention rate.
- Freed chair time only counts if you can refill it. In a practice with an open schedule, attrition hurts more.
- Renegotiating fees, or dropping the single worst plan first, is often a better first move than a mass exit.
The question you are actually answering
When you leave a PPO, three things happen at once. Some patients leave because they want to stay in-network. The patients who stay now pay your full fee (with their insurance paying out-of-network benefits and the patient paying the difference). And the chair time the departing patients used opens up for someone else.
So the decision comes down to three numbers:
- How much you write off per patient on this plan today.
- What share of those patients will stay (your retention rate).
- Whether you can fill the freed time with patients who pay better.
Nobody knows the second number in advance, so the method is to calculate the break-even retention rate and then ask honestly whether you can beat it. If you need to keep 55% of patients to break even and your patients are loyal, long-tenured, and your area has few in-network alternatives, the odds are good. If you need to keep 85%, the odds are poor.
Step 1: Pull write-offs and patients by plan
You need, for each PPO, the last twelve months of production at your full office fee (often called UCR), the write-offs taken, and the number of active patients on that plan.
In Open Dental, the PPO Write-offs report (under Reports, Standard, in the Monthly section) compares standard fees, PPO fees, and write-offs, and can be grouped by carrier. It tracks write-offs only for plans set up as PPO plan types, and it offers options for whether write-offs are counted by insurance payment date, procedure date, or claim date, so pick one and use it consistently. See the Open Dental manual page for the report; report options can differ by version. For active patient counts by carrier, your software's standard reports may not break it out directly, and you may need a user query or help from your support team. Our Open Dental reports and queries module covers how to approach that. Other practice management systems have equivalent reports under different names.
Check your fee schedule first. Write-off percentages are only meaningful if your office fees are current and consistent. If your UCR fees have not been reviewed in years, your write-offs will look smaller than they really are relative to market, and the analysis will understate what leaving could earn.
Step 2: Calculate write-off per patient
Hypothetical example. A general practice participates in three PPOs. Here is a year of data (all figures invented for illustration):
| Plan | Active patients | Production at office fees | Write-offs | Write-off % | Write-off per patient |
|---|---|---|---|---|---|
| Plan A | 400 | $360,000 | $126,000 | 35% | $315 |
| Plan B | 650 | $520,000 | $119,600 | 23% | $184 |
| Plan C | 220 | $180,000 | $70,200 | 39% | $319 |
Plan B is the largest by patients and total dollars, but it pays best. Plans A and C cost the practice more than $300 per patient per year. That per-patient figure is the number that matters for the decision, because it is what you gain on each patient who stays after you leave.
You can plug your own plan-level numbers into our PPO write-off and fee schedule calculator to get these figures quickly.
Step 3: Find your break-even retention rate
Revenue comparisons overstate the case for leaving, because a patient who leaves also takes away some variable costs (supplies, lab, card fees). Use contribution instead: revenue minus the variable costs that go with it.
Hypothetical example, continued, for Plan A. Assumptions:
- Average annual production per Plan A patient at office fees: $900 ($360,000 divided by 400)
- What the practice collects in-network: $585 per patient ($900 minus the $315 write-off)
- Variable costs per patient: about $108 (assume 12% of office-fee production for supplies, lab, and card fees)
- Out-of-network collection loss: assume 3% of office fees, because more of the balance is now the patient's responsibility and some of it will not be collected
| In-network (today) | Out-of-network (after leaving) | |
|---|---|---|
| Collected per patient | $585 | $873 ($900 less 3%) |
| Variable costs | ($108) | ($108) |
| Contribution per patient | $477 | $765 |
Break-even retention is today's contribution per patient divided by the future contribution per retained patient: $477 divided by $765, or about 62%. If the practice keeps more than roughly 62% of Plan A patients, it earns more contribution than it does today, before counting any benefit from freed chair time.
Attrition scenarios
| Retention after leaving Plan A | Patients kept | Contribution after leaving | Change vs. today ($190,800) |
|---|---|---|---|
| 90% | 360 | $275,400 | +$84,600 |
| 75% | 300 | $229,500 | +$38,700 |
| 60% | 240 | $183,600 | ($7,200) |
| 45% | 180 | $137,700 | ($53,100) |
Today's contribution from Plan A is 400 patients times $477, or $190,800. The table shows the asymmetry: strong retention produces a meaningful gain, and weak retention produces a meaningful loss. The decision rests on how confident you are about where you will land.
Adjust for lower treatment acceptance
Patients who stay out-of-network pay more out of pocket, and some will accept less treatment. Suppose retained patients produce 10% less ($810 a year instead of $900). Contribution per retained patient becomes about $678 ($810 less 3% collection loss, less $108), and break-even retention rises to about 70%. That single assumption moves the bar by eight points, which is why it deserves a conservative estimate.
Step 4: Count freed chair time only if you can fill it
Patients who leave free up hygiene and doctor time. In a practice that is booked out six weeks with a waiting list, that time is valuable: it gets refilled with patients on better-paying plans or fee-for-service. In a practice with open hygiene slots next week, freed time is just more open slots.
Hypothetical example, continued. At 60% retention, 160 Plan A patients leave. If each had about two hygiene visits a year, that frees roughly 320 hygiene hours annually. If the practice can refill half of those hours with patients generating about $150 per hour in contribution, that adds $24,000 a year, which turns the 60% scenario from a $7,200 loss into a gain of about $16,800.
Be honest about demand. Look at your new patient trend, your hygiene schedule fill rate for the next four weeks, and how many new patients you currently turn away or wait-list because of a specific plan. Our guide to hygiene department profitability shows how to measure hygiene capacity before you count on refilling it.
Step 5: Weigh the factors that are not in the spreadsheet
- New patient flow. If a plan's directory sends you a steady stream of new patients, leaving it cuts off a source. Check where your new patients come from before deciding.
- Families. Patients on the same employer plan often come as households. Losing one member can mean losing four.
- Local alternatives. In areas where many nearby practices are in-network, patients who want to stay in-network have easy options. In underserved areas, retention is usually higher.
- How patients are paid out-of-network. Some plans pay out-of-network benefits to the patient rather than to the practice unless state law requires carriers to honor an assignment of benefits. Rules vary by state, and they affect how much you collect and how much front desk time it takes. Confirm how the carriers you are leaving handle it in your state.
- Network leasing. Some PPO contracts allow the network to be leased or rented to other payers, which can mean you are treated as in-network for plans you never signed with directly. Understand which arrangements end when you terminate and which do not.
- Staff time. Fewer PPO claims can reduce verification and billing work. Some of that time can go to patient financial conversations instead.
- Your clinical direction. If the plan's fee for a procedure you want to do more of is below your cost, the plan is shaping your treatment mix. That has value beyond this year's numbers.
The expensive mistake: leaving two or three plans at once in a practice with an unfilled schedule. Attrition compounds, the hygiene schedule empties, and fixed costs stay the same. Stage exits one plan at a time, and measure retention after each before taking the next step.
Alternatives before you drop a plan
Leaving is not the only move. Consider these first:
- Request a fee increase. Carriers sometimes negotiate, particularly with practices that have strong patient volume, are in underserved areas, or can show that nearby practices receive higher fees. Ask in writing, with data. The answer may be no, but it costs little to ask.
- Drop the worst plan only. In the hypothetical above, Plan C has the highest write-off percentage and the fewest patients. Leaving Plan C risks less than leaving Plan A.
- Limit new patients from a plan. Some offices stop accepting new patients on a low-paying plan while continuing to see existing ones, which lets the mix shift gradually. Check whether your contract permits this before trying it.
- Offer an in-house membership plan. For patients who lose in-network status or have no insurance, a membership plan can keep them in the practice. Our guide to in-house membership plans covers design and pricing.
- Improve the rest of the revenue cycle. Denied claims, stale unbilled procedures, and weak collections can cost as much as a bad fee schedule. Our insurance and revenue cycle chapter covers that side.
How to leave a plan cleanly
If the numbers say go, execute carefully:
- Read the contract's termination clause. Most require written notice within a set period before the termination date, and some have rules about completing treatment already in progress. Send notice the way the contract specifies and keep proof of delivery.
- Plan the timing. Many patients' benefits reset on January 1. Some offices time the effective date so patients can finish treatment within a benefit year, or so the change aligns with their own fee schedule update.
- Tell patients early and plainly. A letter or email explaining that the practice will be out-of-network with that plan as of a specific date, what that means for their costs, that the office will still file claims for them, and what options exist (such as a membership plan). Train the front desk to answer the same questions the same way.
- Estimate out-of-pocket costs clearly. Patients decide to stay or leave based on what they will pay. Give accurate estimates at the first out-of-network visit.
- Measure retention monthly. Track how many patients on that plan have scheduled, visited, or requested records since the change. Compare to the break-even rate you calculated.
PPO contracts vary, and termination rules, balance billing, and assignment of benefits are governed by the contract and by state law. Review your contracts with a dental-specific attorney or consultant before sending notice.
PPO decision checklist
- Office fee schedule reviewed and current
- Twelve months of production, write-offs, and active patients pulled by plan
- Write-off per patient calculated for each plan
- Contribution per patient calculated in-network and out-of-network
- Break-even retention rate calculated, with a lower-acceptance sensitivity
- Hygiene schedule fill rate and new patient trend reviewed
- New patient sources by plan checked
- Fee increase request sent (or ruled out)
- Termination clause, notice period, and in-progress treatment rules confirmed
- Patient letter, front desk script, and out-of-network estimate process ready
Where to go from here
Run the numbers for your worst plan first. If break-even retention is comfortably below where you think you will land, and you have the demand to refill freed time, leaving is likely to raise profit. If break-even is high or your schedule has openings, work on fees and the rest of the revenue cycle before you leave anything.
For related reading, see the dental practice KPIs worth tracking to build the dashboard that will show whether the move worked, and dental overhead benchmarks to see how write-offs shape your overhead percentage. The PPO write-off calculator will run the first steps of this analysis for you.
Educational content only. It is not legal, financial, tax, or clinical advice. Prices and ranges are approximate and vary by region, condition, and year. Verify current rules with your state dental board and qualified professionals. ChairsideSource is not affiliated with any manufacturer, the ADA, or the DAT.