Its time to start thinking about fee adjustments

fees

It’s Time!

Fee adjustments are a necessary part of running any successful business.  Fees charged must be commensurate with the level of the service performed and take into account the overhead of the business.  Did the prices from your lab go up this year?  Did your staff get pay increases?  Chances are high that your overhead went up in 2014- so your fees need to as well.  As many of you may have already learned, if you don’t keep pace with fee increases, it can be very difficult to create a larger adjustment later on.  Consider these seven areas when examining your fees:

  1. Know where your fees are now – Make sure you are aware of the reality of where your fees stand for your area. We recommend not relaying on word for mouth for this number, reach out to Burkhart’s Practice Support Team and we can give you an idea of your overall percentage as compared to others in your zip code at no charge. Your fees should not be too far below or too high above your local market.
  2. Establish a standard fee for each service – As mentioned above; be sure to consider what it’s costing you to actually deliver the dentistry. We encourage you to base fees on your overhead, expenses, individual level of professional expertise, and patient base.
  3. Recognize where your practice operates with regard to quality of clinical care- Search your heart on this one! Where do you rank with your clinical expertise and training? How about your hygiene team?
  4. Pay attention to aesthetics– Not of the patient’s dentistry but of your practice! Now more than ever patients are discerning consumers. If the practice is not up to date with technology and aesthetics, it can be more difficult for patients to rationalize fees charged.
  5. How strong are your patient relationships and patient experience? – This goes hand in hand with #4 above. Remember, when patients have a relationship with you and feel they are receiving a noteworthy experience in your practice; they often don’t question the fees. Building good relationships and a great patient experience has never been more important.
  6. Avoid the PPO fee ceiling – Don’t trap yourself by attempting to establish your office fee schedule based on what some third-party payer reimburses at 65% of the 85th percentile. It can feel as if “it’s no use” to raise fees due to you managed care participation, however there are strong reasons to raise fees. Few practices receive all of their fees from managed care patients so the fee increase will be effective for all of the patients that are not involved in managed care plans. (Even if this is only 20% of your patient base, this is a win for the practice). More importantly, raising fees each year increases the fee profile for the doctor’s local area, improving the chances for a future fee increase under managed care contracts.
  7. Plan for increases – Establish a solid fee for each service and plan to adjust your fees for an annual increase of 3% for 2015. Even if you increase your fees only slightly to raise the cost for a treatment code $4 to $5, this will make a huge difference in your bottom line.

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