Should You Increase Your Fees?

Increasing your fees can feel like a big decision, but once you set up a system to evaluate your fees regularly the decision will be easy.

Updated 6/30/20

Most dentists fear that if they increase their fees, 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 it’s been several years since they’ve increased fees and they are overdue. Instead of looking so hard at the emotional side of these 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—it does 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, look at the numbers of dental expense increase in recent 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% to 3% each of these years? If so, you were keeping up with the national dentistry market regarding fee schedules. If not, you fell behind by 13.6% over those five 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 X-rays. However, a regular fee evaluation will help you 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 five 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 percentage 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% to 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, it’s fastest to use the Auto Fee Schedule Change. Just go to Office Manager > Maintenance > Reference > Fee Schedule Maintenance, and then click Auto Changes.

Here you can increase fees by any percentage and choose to round to the next dollar, dime or penny. When you click OK, 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, accept the fee schedule change at the bottom. It’s 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 it’s 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.

Learn More

Read It’s time to Update Office Fees Again and Write Offs and Fee Schedules for more information about using fee schedules in Dentrix.

For step by step instructions to edit a fee schedule, read Editing Fee Schedules Automatically in  Dentrix help files.

Originally published in the Dentrix eNewsletter, June 2014