Dental practice fees: ‘Weeding’ the financial garden of your dental practice

This article has been updated from January 2013 to include some of the latest data.

When I think about running a dental practice, I’m reminded of nurturing my garden. I have to tend to a lot of weeds to make sure that my beautiful flowers and vegetables can flourish. Running a dental practice also requires that you pull out those nasty weeds, fertilize the soil, and tend to the practice on a regular basis if you want to see the fruits of your hard work. The time and effort put into keeping things clean and organized will be rewarded with improved collections, increased production, and a much better idea of the health of your practice.

Let’s identify some of the pesky weeds that overtake healthy gardens and choke out the flowers.

Inaccurate and outdated fee schedules

For those who know me, you know that I’m a huge advocate for using the PPO fee schedules when treatment planning and billing patients (you still want to bill your full fee to the insurance companies). Using the PPO fee schedules helps your front office team provide a more accurate estimate for your patients. This results in an increase in your over-the-counter collections, firm financial arrangements, and your office sending out accurate billing statements without having to wait on insurance payments. It also provides a better picture of your net production without having to subtract PPO adjustments. However, none of this is possible if your PPO fee schedules are not correctly entered into your practice management software.

One front office manager asked me, “How do I get updated fee schedules?” Either call or visit the websites of your PPO insurance companies and request an updated fee schedule at least once a year, and make sure that everything matches what you have in your system. Most insurance companies are not updating their PPO fees on a regular basis, so many dental practices slip out of this important maintenance routine. Tip: For any procedures not listed on the fee schedule list, make sure to use your full office fee.

Now let’s look at two common fees and some trends that are happening in the United States with these fees. This data is via Sikka Software, who works with more than 13,000 dental practices across the US and offers a free fee analysis.

As a note, geographic areas are as follows:

Southeast: FL, GA, AL, SC, MS, LA, AR, TN
Mid-Atlantic: NC, VA, MD, NJ, PA, WV, KY
Northeast: ME, NH, VT, MA, CT, RI, NY
North Central: OH, IN, MI, IL, WI, MN, MO
Midwest: IA, NE, SD, ND, WY, MT
South Central: TX, OK, KS, CO, NM
Northwest: WA, OR, ID
Southwest: CA, AZ, NV, UT

Not listed: Alaska, Hawaii, Delaware

Fees for comprehensive oral evaluation, new or established

Region notes from 2016 to 2017:

Southeast—No increase or decrease
Mid-Atlantic—No increase or decrease
Northeast—1% decrease
North Central—1% increase
Midwest—1% increase
South Central—No increase or decrease
Northwest—1% increase
Southwest—1% decrease

Fees for intraoral, complete series of radiographic images

Region notes from 2016 to 2017:

Southeast—1% increase
Mid-Atlantic—1% increase
Northeast—1% decrease
North Central—2% increase
Midwest—1% increase
South Central—2% increase
Northwest—3% increase
Southwest—No increase or decrease

Knowing what’s going on with the fees in your area can help boost your bottom line and keep your business running at peak efficiency.

Inactive or emergency-only patients

Don’t you just love those “drive by” patients? They come in for an emergency and never return, or they just call and come in when they need something. These patients suck energy out of your front office team and wreak havoc on your schedule, and for this reason they should be pulled out of your garden and thrown into the compost bin.

Some of the weeds that we need to keep out of our beautiful dental gardens are the patients who haven’t been in for an appointment in more than two years, but who are still taking our valuable resources, such phone calls, emails, and postcards. Your front office team could be spending this valuable time on patients who do care about their oral health.

It’s important to keep your active patient count accurate for several reasons:
• It will help you forecast how many hygiene hours you need to maintain your schedule.
• It will give you a more accurate dollar amount of unscheduled treatment.
• It will be extremely valuable if you’re in the market for bringing on an associate or selling your practice.

What I suggest is sending a purge letter every quarter that gives patients one last option to call and schedule, send their records to another office, or inactivate their accounts so you can store their files. Giving patients this choice via a letter lets them respond in a very nonconfrontational way if they have left the practice, and you can stop pursuing them. This allows your front office team to weed out these patients once a quarter instead of seeing them on a continuing care list every day.

Many offices told me that doing this purge actually brought back many of their old patients, or gave them the freedom to let the patients go. If you want a sample purge letter, email me at [email protected].

Office fees

You don’t think of your office fees as weeds, but if you don’t manage them responsibly they will become weeds. I’ve talked about keeping your PPO fee schedules accurate and up to date, and the same goes for your office fee schedule, which is the fertilizer that makes everything grow. You must fertilize your garden on a regular basis in order to reap the rewards of a bountiful harvest.

When I say “regular basis,” I don’t mean every two to five years, which is very common in the dental industry. Dentists think that patients will be upset if they increase their fees, but this is not the case if the fees are increased responsibly. I heard a speaker tell her audience, “You need to go back to your practice on Monday and increase your fees by 25%.” I went back to my practice and did the math: if I raised my prophy fee by 25%, that was an increase of $18; if I raised my crown fee by 25%, that was over $200. My patients would have been upset, and rightfully so. So I raise my fees 1.5% to 3% every 12 to 18 months. This allows the office to responsibly raise our fees, patients don’t get upset, and it keeps our practice growing steadily.

I teach offices to raise hygiene fees about 1.5% to 2% and increase the treatment about 2.5% to 3% and this has worked extremely well. It’s a win-win for both the dental office and patients.

I know every office has systems for recare, collections, insurance, and scheduling, but the three things I’ve talked about here also need management, so don’t forget about them. Remember to pull the weeds and fertilize the garden and your dental practice will flourish.

RELATED ARTICLE
2017 dental fee analysis by region and CDT procedure code

For the most current practice management headlines, click here.

For the most current dental headlines, click here.