Monday, February 1, 2016

FEES---TO RAISE OR NOT TO RAISE IN 2016?

Practice management surveys report that approximately 74% of dentists raised fees in 2015.  Those of us involved in the management side of dental practice would prefer that 74% were closer to 100%.  I agree with many other management consultants who recommend an annual fee increase, every year.

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.  

If you’re unsure of the percentile into which your fees fall compared to other practices within your zip code (first three digits), do some homework.  Remember, you want to know where your fees rank in the overall scope of fees within your zip code; you cannot collude with other dentists to set your fees.  An excellent source of information for making this comparison is Dr. Charles Blair’s comprehensive Revenue Enhancement Program which provides analysis of fees for every ADA procedure code listed by specific zip codes.  For more information about Dr. Blair’s Revenue Enhancement Program, call 866-858-7596 or go online to www.practicebooster.com.  If you find your fees are well below others in your area, use 2016 to adjust them to a percentile that reflects the quality and scope of your practice.


The Consumer Price Index predicts inflation to be 2% - 3% in 2016; therefore, I recommend a fee increase of 2.5% to 3% in 2016 once your fees are within an acceptable range commensurate with others in your area.  If you have let your fees lag well behind averages for your area, it may take several years of fee increases greater than the inflation rate to bring your fee schedule in line.  Begin to do so in 2016. 

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