Should You Drop Your PPO? Run the Numbers First.

Nearly one in four dental practice owners plans to drop at least one insurance network within two years, according to ADA Health Policy Institute data.¹ The fear holding most of them back isn't philosophy — it's math. Will the patients who stay, paying full fees, generate more revenue than what leaves with the patients who go?

The core tension: dropping a PPO that reimburses at 60% means each retained patient immediately generates 67% more revenue per visit. But patient attrition of 20–30% partially offsets that gain. Where you land depends on three variables most spreadsheets don't hold at once: your reimbursement rate, your expected attrition, and how fast you attract new fee-for-service patients. This calculator models all three.

The math behind dropping a PPO

When a PPO reimburses you at 60%, you collect $0.60 for every $1.00 of your standard fee. Drop the plan and every retained patient is worth $1.00 — a 67% revenue increase per visit. The break-even retention rate is exactly equal to your reimbursement rate: if the plan pays 60%, you need only 60% of those patients to stay to match your current revenue from that plan. Retain 75%? You're collecting more than before.

The fear dentists carry into this decision — "I'll lose half my patients" — almost never materializes. The ADA-documented range for plan-specific attrition is 15–35%, and practice owners regularly find that patient loyalty runs to the dentist, not the insurance card. One frequently cited case: a dentist who feared 45–50% attrition experienced 31% and saw net collections increase $87,000 in year two.²

What patient attrition actually looks like

Attrition when dropping a PPO is distinct from your practice's normal annual patient attrition (the 15–20% of patients who quietly stop coming every year regardless of your network status).⁴ Plan-specific attrition is the share of patients whose decision to stay or leave is directly driven by that specific coverage.

Factors that reduce attrition (use a lower input)

• Long patient relationships (5+ years) — patients follow the dentist, not the plan
• Specialty services that aren't easily replicated (implants, sedation, Invisalign, pediatric focus)
• Geographic scarcity — nearest in-network alternative is 20+ minutes away
• Strong internal referral culture — active patients send family regardless of insurance
• Proactive patient communication before the transition — surprise departures spike, planned transitions don't

Factors that increase attrition (use a higher input)

• Employer-dominated insurance market (large government employers, unions, military bases) where patients have well-subsidized premiums
• High density of in-network alternatives nearby
• Short patient tenure — associate-heavy practice where relationships are newer
• Dropping a dominant regional carrier (Delta Dental in most markets, United Concordia in military areas)
• Price-sensitive demographics where the out-of-pocket delta significantly affects patient decisions

Who the math works for

Dropping a PPO is generally financially justified when all of the following are true:

• Reimbursement rate below 65%. Below 65%, you need less than 65% patient retention to match current revenue. Most practices do better. At 60%, you only need 60% retention to break even.
• The plan represents more than 20% of your collections. Below that, the complexity and disruption of a drop may not be worth the gain from a smaller patient subset.
• You have capacity for new patients. The replacement model assumes you can attract FFS patients. If you have open chair time, this is your fastest path to filling it with higher-margin patients.
• You have 3–6 months of operating reserves. Even when the 5-year math strongly favors the drop, year 1 cash flow management requires a buffer — especially for practices with higher overhead or faster attrition.

When to keep the PPO

• You're within 2–3 years of selling. Revenue disruption in a pre-sale period depresses EBITDA multiples and complicates buyer financing. A DSO or PE-backed buyer discounts transition-year results.
• The plan is your primary new-patient source. Check your new-patient data: if 50%+ of new patients come from that carrier's directory, the attrition math changes entirely.
• Reimbursement rate is above 80%. The FFS uplift is modest; attrition risk may not be worth it unless you have strong evidence you can replace departing patients quickly.
• The plan includes a coordination of benefits clause that triggers automatic termination from secondary plans you want to keep.

Tax and planning implications when the transition succeeds

A successful PPO drop typically improves net practice income by $50K–$150K per year once stabilized. That income increase compounds through several planning levers:

• Retirement contribution capacity expands. Solo 401(k) contributions and cash balance plan funding are both tied to net practice income. A $75K income increase often tips a cash balance plan from marginal to clearly justified — sheltering an additional $80K–$290K/year in pre-tax contributions.⁵
• S-corp salary recalibration. If you pay yourself 30–35% of collections as W-2 compensation, a revenue increase means your reasonable salary threshold rises. Review your payroll annually to stay compliant and to capture the right QBI deduction.
• Practice valuation improves materially. EBITDA multiples apply to the new, higher earnings baseline. A $75K/year net income improvement at a 5× EBITDA multiple adds $375,000 to your practice's sale price — a direct estate and retirement planning asset.
• IRMAA risk at retirement. Higher income during your peak earning years means more Roth conversion runway in your 50s and early 60s. The practice sale already creates a Medicare surcharge exposure; planning ahead limits the damage.