Why an annual increase?
- An annual fee increase allows a practice to better control overhead (as a percent of collections), and, thereby, steadily increase profit.
- Fee increases each year raise the fee profile in a dentist’s zip code area, thereby applying some pressure on managed care companies, including Medicaid, to increase reimbursements. The greater the number of dentists who increase fees annually in any given area, the greater the chance of increased reimbursements under managed care contracts.
- Without a regular annual increase, a dentist has no hope of staying ahead of inflation. A dentist who skips an annual increase can never sufficiently raise fees some year in the future to make up for lost revenue. Additionally, managed care plans that require providers to submit an annual fee schedule will not allow an inordinately large fee increase in a single year to compensate for previous years in which a dentist did not increase fees.