Maintaining a Healthy Fee Schedule

To stay within healthy fee schedule benchmarks, dental practices should maintain fees between the 75th and 80th percentile for the area’s zip code. McGill Advisors routinely recommends a 3-5% annual fee increase. We have found most practices have fees set well below this healthy target and do not regularly raise fees.

Benefits

• Stable overhead. As costs increase annually, raising fees helps to keep overhead in check.
• Maintenance of practice value and desirability to future buyers. Without fee increases, your practice becomes less desirable, as potential owners do not want the burden of correcting fees.
• Increased leverage for negotiating PPO contracts.
• Area insurance companies compile fee data through dental claims; properly positioned fees help to maintain a higher fee schedule for your area.
• Raising fees allows an opportunity to invest back into the practice and staff.

“I have several PPO Contracts; this just means I will have higher adjustments.”

Many PPO plan participants argue raising fees will not help because current PPO contract fees will not increase, resulting in higher adjustments. While true, it is important to keep the following in mind:

• Private pay patients are not tied to PPO contracted rates.
• Plans you are processing as out-of-network providers pay up to your full office fee.
• Many dual coverage plans pay up to your full office fee on secondary claims.
• Health Savings plans are not tied to PPO contracted rates.

“I’m afraid patients will complain or even leave if I raise fees.”

Most patients do not notice a 3-5% fee increase. Instead of focusing on the fear of losing patients, consider shifting your perspective to the practice’s value, service, and relationship to the patient. Fee increases are a normal part of business in every industry.

“I feel like I’m penalizing cash-paying patients.”

Keep in mind patients with dental insurance pay a monthly premium for their coverage. Private pay patients do not.

Raising fees has an immediate and substantial impact. For more support or information about annual fee increases, please contact our Practice Support Team.