If you’re just starting your own dental practice, or thinking about it soon, one of the first big choices you’ll make is whether to accept PPOs, HMOs, or a mix of both. It might seem like a simple paperwork decision at first, but it’s not.

This choice affects: 

  • how many patients walk through your doors
  • how much you get paid per procedure
  • how flexible you can be with your treatment plans
  • how your day is structured

The type of insurance you accept will shape your business model more than you might expect.

For new dentists or first-time owners, it’s easy to feel pressure to sign on with every plan available. But being selective from the start can save you time, stress, and money down the road.

If you’re still in the early stages of launching your practice, check out my guide to setting up a dental practice the right way. It walks you through the core business decisions you should lock in before diving into insurance contracts.

What Is an HMO in Dental Insurance?

An HMO, or Health Maintenance Organization, is a type of dental insurance plan where patients must choose a primary dentist from a specific network. That dentist becomes their go-to provider for all covered services.

As the provider, you’re paid a fixed monthly fee per enrolled patient. This payment model is called capitation. Whether that patient visits once or five times, your monthly payment stays the same.

Patients in HMO plans typically need referrals to see specialists, and they can’t go out-of-network without losing coverage. This creates a more controlled and cost-focused environment, but also limits flexibility for both patients and providers.

HMO networks tend to be tighter, with fewer participating providers. In many cases, dentists who join HMO plans are automatically assigned new patients from the insurer’s member list.

It’s a model built on volume and access. If you’re in a busy urban area or just starting your practice, that volume can be appealing. But it comes with some trade-offs, which we’ll break down in the next section.

Pros of Accepting HMOs in Your Dental Practice

For new dentists or startup practices, HMOs can offer practical short-term advantages.

High patient flow

Since HMO patients are often assigned to providers within the network, joining an HMO can quickly fill your schedule. If you’re trying to build a patient base from scratch, this can be a helpful way to get people in the chair.

Consistent monthly income

With capitation, you receive a flat monthly payment for each patient assigned to you, regardless of how often they visit. That kind of predictability can make it easier to manage cash flow when you’re still ramping up.

Helps you stay busy early on

HMOs can keep your operatories full during those first few months when you’re still trying to attract fee-for-service or PPO patients. Even if the margins are thin, it provides experience, visibility, and an opportunity to build systems.

Cons of HMOs for Dental Practices

While HMOs can bring in patients quickly, there are trade-offs that can impact your clinical and financial freedom.

Limited clinical freedom

The plan often dictates treatment options. You may find yourself restricted in the materials you can use or the procedures you can offer without an out-of-pocket cost to the patient. That can limit your ability to provide the care you believe is best.

Lower reimbursement

Capitation payments are significantly less than what you’d earn through PPOs or fee-for-service. The more patients you see, the thinner the margin gets, especially if they require frequent or complex care.

Higher risk of burnout

High volume plus low fees is a tough combo. To stay profitable, HMO practices often rely on a packed schedule and quick appointments. That pace can take a toll on both you and your team over time.

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What Is a PPO in Dental Insurance?

A PPO, or Preferred Provider Organization, is one of the most common dental insurance types you’ll come across. If you’ve ever worked in a private practice, chances are you’ve already dealt with at least one.

What makes PPOs popular is flexibility. Patients can choose from a vast network of dentists and usually don’t need a referral to see a specialist. They can also go out-of-network if they want, although it typically costs them more out of pocket.

For dentists, PPOs work on a fee-for-service model. That means you get paid for each procedure you perform, based on an agreed-upon fee schedule. You submit a claim, the insurance company processes it, and then you get reimbursed. Pretty straightforward once you get the hang of the paperwork.

Unlike HMOs, there’s no patient assignment and no monthly capitation. You treat who you want, when you want, and get paid for what you do.

Pros of PPOs for Dental Offices

If you’re building a practice that prioritizes flexibility, profitability, and long-term growth, PPOs can be a smart move.

Higher reimbursement per procedure

Compared to HMO plans, PPOs typically pay more for the same treatments. You still have to work within a fee schedule, but it’s often closer to your usual fees. That can make a big difference when you track production and try to grow your revenue.

More freedom with treatment planning

You’re not locked into a rigid list of approved services. With PPOs, you can present treatment plans based on what’s clinically best, not just what the plan allows. This gives you more room to use better materials, offer upgraded options, and personalize care.

Easier to build a profitable private practice

PPOs strike a balance between access and income. You still attract insured patients, but without the volume-pressure or low margins of HMO plans. Many practices use PPOs as a core revenue stream while gradually adding fee-for-service offerings as they grow.

Patients tend to prefer PPO plans

Patients often feel more comfortable knowing they can choose their provider and aren’t stuck in a restrictive network. That flexibility makes it easier for you to earn their trust and loyalty.

Cons of PPOs in Dentistry

While PPOs offer more flexibility and higher payouts than HMOs, they also come with a few operational headaches, especially if you’re just getting started.

More administrative work

With PPOs, every procedure has to be submitted, coded, and processed. Denials happen. Follow-ups happen. It’s all part of the game. If you don’t have a well-trained front office team or solid billing system, this can quickly eat into your time and energy.

Requires proper documentation and coding

Insurance companies won’t reimburse you without the right documentation. That means detailed notes, X-rays, proper CDT codes, and a solid understanding of what each plan requires. Mistakes can delay payment or result in write-offs you didn’t plan for.

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PPO vs HMO for Dental Practices: Which One Is Better?

It depends on what kind of practice you’re building, and where you’re starting from.

If you’re a new solo practice in a competitive urban market, HMOs can provide a fast stream of patients and steady monthly income. They can help you stay busy while you’re building your reputation and fine-tuning your systems.

If you’re focused on long-term profitability, treatment autonomy, and clinical quality, PPOs are usually a better fit. They allow more flexibility, higher reimbursements, and a patient base that often values provider choice and continuity of care.

DSO-supported practices may be equipped to handle high-volume HMO models with efficient systems and staffing. Private owners, especially those in suburban or rural areas, often lean toward PPOs or a selective mix of both.

There’s no one-size-fits-all answer here. The best choice is the one that aligns with your goals, capacity, and the kind of dentistry you want to do.

If you’re weighing your options or feeling stuck, here’s a step-by-step guide on how to get credentialed with insurance companies. It’ll walk you through what to expect and how to approach the process strategically.

Other Factors to Consider When Choosing PPO or HMO Plans

Credentialing and network contracts

Getting credentialed takes time. Some networks can take months to approve you, and not all contracts are created equal. Read the fine print. Know your fee schedules and termination clauses before signing anything.

Staff training and systems

Whether you choose PPO or HMO (or a mix), your team needs to be trained on eligibility checks, pre-authorizations, coding, and submitting claims. The right systems and workflows make the difference between getting paid and chasing down denials.

Insurance influences case acceptance

Patients on HMO plans often expect fully covered services and may hesitate when anything falls outside the basic benefits. PPO patients typically have more flexibility and are used to discussing co-pays or treatment upgrades. The better your team understands how each plan works, the better they can communicate with confidence.

Marketing needs to match your insurance model

If you’re in-network with HMOs, volume is your game. If you’re PPO or fee-for-service, you’ll want to position your practice around value, trust, and clinical excellence. For help with that, here’s a practical guide on how to attract more dental patients consistently.

Can You Accept Both PPO and HMO in a Dental Practice?

Yes, you absolutely can accept both PPO and HMO plans, but you’ll need the right systems in place to make it work without burning out your team or losing profitability.

Balancing both models takes strategy. HMOs tend to fill your schedule quickly but offer lower per-visit revenue. PPOs offer better reimbursement but require more administrative effort and case-by-case attention.

Without a plan, trying to juggle both can lead to chaos in your ops and inconsistencies in patient experience.

This model works best in practices with: 

  • multiple providers
  • extended hours
  • high patient capacity

With the right staffing and scheduling approach, you can designate time slots or providers specifically for HMO patients, while keeping PPO or fee-for-service slots open for more involved treatments.

If you’re a solo provider, it’s doable, but you’ll want to be extra careful about time management and set clear limits on how many HMO patients you can realistically manage each month.

The bottom line: you can say yes to both, but it needs to be intentional. Make sure your clinical workflow, team training, and revenue goals support that choice.

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FAQs

Why are PPOs more popular than HMOs in private practices?

PPOs tend to offer higher reimbursement rates, more treatment flexibility, and attract patients who value provider choice. That combination makes them a better fit for private practices that want to balance clinical autonomy with profitability.

Can I switch from HMO to PPO later?

Yes, many dentists start out with HMOs to fill their schedule and then drop or reduce those plans as their PPO and fee-for-service patient base grows. It’s a common transition. Just make sure you review any termination clauses in your HMO contracts.

What are capitation fees in dental HMOs?

Capitation fees are fixed monthly payments you receive per enrolled patient, whether they come in for care or not. The idea is that the plan pays you to manage that patient’s dental health, but the lower reimbursement often requires high patient volume to be profitable.

Do patients prefer PPO or HMO dental plans?

Most patients prefer PPOs because they can choose their provider, see specialists without a referral, and get more flexible coverage. HMOs tend to be more restrictive, which can limit their appeal, though they are often more affordable.

Is fee-for-service still viable in 2025?

Absolutely. Fee-for-service works especially well in boutique, high-trust, or specialty practices. Many dentists blend PPOs with fee-for-service offerings to maintain profitability while building long-term relationships with patients who value quality care.

Build Smart, Grow Selectively

Choosing between PPO and HMO plans is a foundational part of your practice model. Here’s what to keep in mind:

  • Be strategic, not reactive. Just because a plan brings patients in doesn’t mean it supports your long-term goals.
  • Balance matters. High volume is only sustainable if it’s paired with the right systems. Autonomy matters more than it seems when you’re in the chair every day.
  • Profitability depends on alignment. Make sure your insurance mix matches your location, workflow, team, and clinical philosophy.

Need a plan for growth and insurance strategy?

Schedule your free consultation and let’s build the right model for your goals — one that works for your patients, your business, and your future.