Dental Insurance Wake-Up Call
Dental insurance is no longer a passive backdrop in practice management; it’s an active driver of both risk and cost. Changes in insurer policies and contract terms can reduce profitability, consume staff resources, and even affect practice value.
Key considerations for veteran practice owners:
High-value legacy contracts, such as Delta Premier, may become a liability at the time of sale.
Low-paying insurance plans can erode profitability and complicate practice sale strategies.
Transparency, thorough documentation, and risk modeling are essential for a smooth sale.
Timing of payer changes can influence buyer confidence and closing terms.
Renegotiation and diversification beyond insurance dependency are critical.
Start “insurance cleanup” early, ideally two to three years before your intended sale.
More than half of dentists surveyed identified insurance-related issues as a top concern for 2025.
According to the ADA Health Policy Institute, roughly 58% of dentists reported reimbursement and claims issues as a major challenge.
Challenges also include:
Claim denials and delayed payments
Downcoding, where insurers pay for a lower-level procedure than performed
Least expensive alternative treatment clauses
Silent PPO leasing, which occurs when your insurer places other insurance companies under their network umbrella without your knowledge, resulting in unexpected lower reimbursements
Medicaid can create additional practice
valuation challenges.
Even after Ohio doubled Medicaid reimbursement rates in early 2024, buyers remain cautious about Medicaid-heavy practices due to:
Audit risk
Compliance burden
Potential volatility in state-level policy
A practice’s insurance mix influences practice value. For example, Delta Premier contracts cannot be transferred to most new buyers, who are then forced to accept lower-paying Delta Dental PPO rates or drop Delta. This shift can potentially depress the sale price significantly, depending on the patient base.
Strategic Considerations for Seasoned Practice Owners
Many owners face the question: should low-paying insurance plans be dropped before selling? While removing unprofitable contracts can simplify revenue streams, dropping networks near the sale date can alarm buyers.
The best approach often involves gradual, well-documented transitions, ideally starting two to three years before retirement. This reduces revenue volatility, builds buyer confidence, and positions the practice for a smoother sale.
Even all-cash, fee-for-service practices without Delta Premier or PPO plans face challenges. While these practices may appear attractive on the surface, buyers often fear significant patient attrition when the seller leaves, a much greater concern than with PPO or Medicaid-heavy practices.
Plan Ahead with Expert Guidance
Navigating insurance complexities is critical for maximizing practice value and ensuring a smooth transition. Practice Endeavors can help. Schedule a call or a free office visit to discuss strategies for managing your insurance challenges and planning for the future.
Take control of your future
PVA℠ helps practice owners prepare for the inevitable transition of their practices to new ownership.
J. Robert “Bob” Brooks, CEPA, CBI
J. Robert “Bob” Brooks, CEPA, CBI, leads Practice Endeavors, an Ohio-based practice brokerage and dental realty company. His company provides practice owners with the tools they need to prepare well for life after practice ownership and to find the best price/best fit buyers for their seller clients. Bob was integral in starting the first of its kind dental practice broker credentialing for the International Business Brokers Association.