Write-off

A write-off is the difference between what a dentist's full fee is and what a contracted insurance plan actually allows for that procedure: the portion the practice is contractually required to forgive rather than bill the patient for, since billing the patient the difference on an in-network claim is a violation of most PPO contracts. Say your full fee for a crown is $1,500 and a PPO's allowed amount is $975: the $525 gap is the write-off, and it happens on every crown billed to that plan for as long as the contract is active.

The write-off percentage on a given plan turns out to be exactly the same number as the practice's break-even patient loss if it drops that plan: bill at a 35% average write-off across a plan's fee schedule, and the practice can lose up to 35% of those patients on leaving the network and land exactly where it started financially, with every patient retained above that being pure upside.

Calculating the average write-off percentage plan by plan, not guessing at it, is the first real number in any decision about whether to keep, renegotiate or drop a contract.