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Should you increase your fees?

Dental Fees Evaluation

Dental Practice Fees

When was the last time you increased your fees? This can feel like a big decision, but once you set up a system to evaluate your fees regularly, making this determination won’t feel so life-threatening. Most dentists fear that if they increase their fees, then their patients will feel their services are too expensive and will leave the practice. On the other hand, many dentists are also struggling financially and they know its been several years since they’ve increased fees, so they are overdue. Instead of looking so hard at the emotional side of DentalCPIthese arguments, let’s turn dental practice fee evaluation into a business decision.

Dental Practice Fee Evaluation

Choose one month each year to evaluate your fee schedule. You could choose January to feel like you’re starting the year off on the right foot, or May because that gives you time to review the journals and hear what the “experts” recommend. One nice resource is the ADA News – they do a great job of publishing statistics about dentistry that help influence your decisions about dental practice management. This graph (borrowed from the ADA News) is a perfect example.

This graph shows that for the first time, the cost of dental services has increased more than the cost of medical services. In fact, if we look at the numbers of dental expense increase over the past few years:

2009:   2.9%

2010:  2.7%

2011: 2.3%

2012: 2.4$

2013:  3.3%

You can use this list as a benchmark for comparing your fee increases. Did you increase your fees 2-3% each of these years? If so, then, you were keeping up with dentistry nationally regarding fee schedules. If not, then you fell behind by 13.6% over the past 5 years.

Dental Insurance Plans Affect Your Fees

For the most part, the patients you affect with a fee increase are your out-of-network or self-pay patients. The patients who have Delta or Anthem are on a negotiated fee schedule and your increase won’t affect them if they’re coming in for just their cleaning, exam and xrays. However, a regular fee evaluation will help you to see the difference between your standard fee and the allowed amount. Realistically, this difference will grow every time you complete a dental practice fee schedule increase. You need to watch this difference because it shows the significant loss you are taking by signing up with a dental insurance plan.

Check the fee schedules you’re using right now. In Dentrix, go to Office Manager – Reports – Reference- Fee Schedules – include all procedure codes and choose to print a Range of 5 Fee Schedules. If your standard fees are #1 and you have your first PPO as fee schedule #2, the next one as #3, etc. then when you print this report you will see each procedure code listed along the left and then a column for each fee schedule with plenty of room in between. This makes it easy for you to do a few calculations to see what % you are losing for each plan. Cherry pick a few codes to see the differences in black and white.

Finish your Fee Schedule Increase

Once you’ve decided on the percentage increase that seems appropriate (2-3% looks like the norm according to the ADA News), then make it happen. Let’s say you’re planning a 2.5% fee increase but you want to leave your prophy, bwx and comprehensive exam fees alone. In Dentrix, its fastest to use the Auto Fee Schedule Change – just go to Office Manager – Maintenance – Practice Setup – Auto Fee Schedule Changes. Here you can increase by any % and choose to round to the next dollar, dime or penny. When you click the Change button, it will automatically generate the new fees – and place them in a column beside your original fees. If you have a sudden change of heart, you can click Reject and you’re right back where you started. No problem.

This is also where you can change specific fees – so you can look for your D1110 code and double click to edit it and change it right back to the original fee. When you’ve looked at each fee, then you can Accept the fee schedule change at the bottom. Its important to know that your auto fee schedule changes do not change fees for existing appointments or treatment plans. You can update these if you like, but generally its nice to leave these alone since you discussed the fee with your patients before they scheduled the appointment – and nobody likes a bait and switch.

Managing your dental practice fee schedules is just one way to run a successful dental practice. If you’re interested in new ideas on running a dental practice, please subscribe to my weekly blog. One of the biggest challenges to managing a dental practice is managing dental insurance. With dental insurance handled, then dental marketing for new patients becomes a primary focus. In today’s day of online reviews, handling patient complaints well is essential. As your practice grows, hiring dental staff becomes more important. With 16+ years of dental practice management experience, I’m open to your questions to help you run a successful dental office.

Feel free to email me.

AUTHOR: Jill Nesbitt
jill@dentalpracticecoaching.com
1 Comment
  • Victor

    I would like to subscribe to your facebook page, please add me
    Thanks

    May 19, 2014