Dropping a PPO: What Actually Happens to Collections
Every PPO exit conversation starts with the same fear: "I'll lose 30% of my patients and my collections will crater." Here's what the numbers actually look like when practices drop a plan, and why the collections math is usually better than the fear.
Start with the write-off you're already eating. If your office fee for a crown is $1,400 and the PPO allowable is $850, you're writing off $550 on every crown for that plan's patients. A practice collecting $1M with 40% of production tied to one heavily discounted PPO is often writing off $150K-$250K a year on that plan alone. That's the number to hold onto while you read the rest.
The timeline: what happens month by month
Months 1-3 after the drop: Almost nothing. Patients with appointments already booked keep them. Most don't know your network status changed, and many won't find out until their EOB looks different. Collections often tick up slightly because you're now collecting closer to full fee on the patients who stay.
Months 4-9: This is the real attrition window. Recall visits come due, patients check their insurance portal, and some leave. Practices that handle the transition well typically keep 60-80% of the affected patients. Practices that let the front desk shrug and say "we don't take that anymore" keep closer to 40%.
Months 10-18: Collections stabilize and usually recover. You're seeing fewer patients from that plan but collecting more per visit, and you've backfilled some capacity with better-paying patients.
The break-even math
Here's the calculation that matters. If the PPO was reimbursing you at 60% of your office fees, every patient you keep after the drop pays you roughly 65% more per visit (they're now out-of-network or cash, minus whatever you discount).
Run it: 100 active patients on the plan, average $650/year each at PPO rates. That's $65K in collections. Drop the plan and keep just 60 of them at full fee (about $1,050/year each) and you collect $63K. Keep 70 and you're at $73K. The break-even retention rate for most fee schedules sits between 55% and 65%. Everything above that is a raise.
And that math ignores the chair time you freed up. Forty fewer patients means 80-120 open hygiene slots a year to fill with new patients at full fee.
What actually determines how many patients stay
1. Whether you tell them before the insurer does. Send a letter 60-90 days out, in plain English: you can still see us, here's what a cleaning will cost you, here's why we made the change. Patients leave when they're surprised, not when they're informed.
2. Whether you file claims as a courtesy. Out-of-network doesn't mean the patient loses benefits. If your team files their claims and the patient just pays the difference, most visits end up costing them $20-$60 more. That's a small number next to switching dentists.
3. How long they've been with you. Patients with 5+ years of history stay at much higher rates than ones you've seen twice. If the plan you're dropping is full of newer patients, budget for attrition at the low end of the range.
When dropping a PPO goes badly
It's usually one of three mistakes: dropping the plan that feeds 50%+ of production in one move instead of staging it, dropping a plan in a market where three other offices in-network sit within two miles, or cutting the plan without fixing a leaky recall system first. If your reactivation rate is weak, you'll lose patients you could've kept.
Sequence it instead. Rank your PPOs by effective reimbursement rate, drop the worst one, watch collections for two quarters, then decide on the next. Most practices that stage it this way see collections fully recover within 12-18 months while working fewer chairs.
