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Finding your fee schedule sweet spot

Nov. 1, 2010
Marketer Naomi Cooper and Dr. Dan Marut talk about ways to determine the appropriate fee schedule for your area.

by Naomi Cooper With Special Guest Dan Marut, DMD

For more on this topic, go to and search using the following key words: recession-proof, fee schedule, dental plans, UCR, Naomi Cooper, Dr. Dan Marut.

Dentistry has often been called a recession-proof business, and it's easy to understand how it gained that reputation. After all, people always need dentistry, even when money is tight, right? The problem is that most Americans don't budget for dentistry, and when they find themselves watching their wallets, their twice-yearly dental exams are easy to postpone. Even worse, the patients who do manage to make their recall appointments and who are trying to maintain their oral health are often pinching pennies as well. They are making every dollar count, and many dentists fear that if their patients' dollars don't count for much in their practices, those patients just might start shopping around for another dentist ... or stop going to the dentist entirely.

The pressure from patients to keep fees in check is there, but if you also accept dental insurance, then you know that patients aren't the only ones exerting pressure on your fee schedule. Each year, dental insurance companies lower their reimbursement rates, forcing many doctors to cram their schedules to the breaking point, turning over patients at a rapidly increasing clip.

Dentists are feeling squeezed from both sides - patients want lower rates and insurance companies are paying less, while expenses grow, employee salaries rise, and inflation looms. What is a private practice dentist to do?

It's crucial - especially in these uncertain economic times - to take a hard look at your fee schedule once a year to make certain that it's fully up-to-date and appropriate for your area. Do you remember the last time you really closely examined your fees? Not just a cursory examination, but the last time you really dug deep, got critical, and analyzed where you currently stand compared to all of your peers?

Chances are it's been a while. The problem is that without regularly looking at your fees, it's impossible for you to make effective decisions regarding your business. The key is finding the fee schedule sweet spot that enables you to remain viable without running the risk of your services becoming undervalued.

Without increasing your fees, you may not be able to stay competitive - you can't afford to continue to update your practice with the latest technology or to get all of the necessary continuing education to hone your clinical skills. You also can't provide your patients with benefits such as cash, senior or advance payment discounts, Care Credit®, or Whitening for Life.

Patient benefits continue to be one of your best tools for building patient loyalty and setting yourself apart from your competitors, but operating a successful practice depends on implementing these kinds of patient incentives in a way that boosts your bottom line rather than destroying it ... and the key to doing this lies in setting appropriate fees.

Recently, I sat down with Dr. Dan Marut, DMD, one of dentistry's leading innovators in patient benefit systems and incentive programs, to discuss the topic of fee schedules and go over how - and why - to keep your schedule on par with industry standards:

Naomi Cooper: Dan, as a marketer, I realize the importance of pricing. When devising a comprehensive marketing plan for any business, pricing is one of the key elements. It's one of the "four P's" - pricing, product, place, and promotion - that form the marketing mix. In your experience, how important is it for a doctor to stay on top of his or her fee schedule when it comes to running a successful dental practice?

Dr. Dan Marut: It's extremely important. Everywhere we turn, costs are on the rise. The goods and services that allow us to provide dentistry are getting more expensive with each passing year. Lab fees are going up. The cost of equipment and supplies is going up. Rent and utility bills continue to increase.

Employee benefits are getting more and more expensive. You may not be staying up-to-date with your fees, but I can guarantee you the vendors you rely on to help you run your practice are staying up-to-date with theirs.

If you want to maintain a healthy business, it's imperative that you adjust your fees to compensate for your rising operating costs. We are in this profession to help people and to provide a valuable service to our communities. However, if we don't take care of the business side of our practices, we won't be able to provide our services to our patients and communities at the level that they deserve ... if we're able to provide our services to them at all!

Cooper: Let's talk about staying up-to-date. What do you base your fee schedule on, Dan?

Dr. Marut: I rely on a variety of schedules available to dentists when setting my fees. The Dental Economics® fee schedule is a great resource. I also rely heavily on the UCR table that's available through Udell Webb Leadership. I think it's important to use a variety of sources and to check them often. I have found that there are many dentists out there who really aren't confident about their fees. They worry that they're pricing themselves too high or that their UCRs are being stifled by the insurance companies. I think that's a real problem. You need to be confident in your fees. If you're not, then it's a sign that you're not evaluating them often enough.

Cooper: How often should a doctor compare his or her fees to the industry standard?

Dr. Marut: At a minimum, a dentist should be running a comparison at least once a year. However, I strongly recommend looking at them at least twice yearly. There are a couple of reasons for this. Some insurance companies update their fee profiles twice a year, so it benefits you to update yours as often as they do to make sure you're being reimbursed as fairly as possible. Also, adjusting your fees more regularly allows you to raise any fees that you are going to raise more slowly and gently, which prevents your patients from getting "sticker shock" at the rising price of their dental care.

Cooper: Getting back to the topic of fee surveys, what guidelines do you use when evaluating the surveys that are out there? In your opinion, what makes one fee survey more valuable than another?

Dr. Marut: The more localized the survey, the better. It's that simple.

Think about where your practice is located and the people who live and work around it. What sort of community is it? If there are 5,000 dentists reading this article, I can guarantee you that I am going to get close to 5,000 different answers to that question. Your community is unique. The factors that determine the cost of living in each area are so complex and varied that there's really no way to assess it without going town to town.

Many of the fee schedules that I have seen use zip codes to localize their information, and that's really the only way to do it with any sort of effectiveness. It's great for comparing where your fees stand in relation to other offices in your area. You know when you're looking at a localized survey that it's an accurate assessment of what your competitors are charging.

Cooper: What general guidelines would you give to your fellow dentists regarding their fees?

Dr. Marut: Again, it's really about where you are relative to the average fees in your area. In particular, you want your UCRs to be in the 80 to 100th percentile. This is especially true if you're going to offer promotions like senior savings, cash discounts, CareCredit or Quality Dental Plan, the system I developed.

In fact, I created QDP in part to make setting my fees easier. I didn't like being forced to charge fees that were lower than "usual, customary, and reasonable." I found that many of the insurance companies were offering fee schedules so low that it was prohibitive to running my business at a quality level.

I was suffering and my patients were suffering. The insurance companies were the only ones benefiting. Plus, you have to remember that depending on your area, up to 60% of your potential patients don't have insurance. I wanted to be inclusive of all patients in my area, not just those on a particular dental plan.

QDP was the answer. Patients these days are looking for value. QDP allows patients to become a "member" of my practice, and as a member, they receive a reduced fee schedule. QDP patients remain loyal to the practice because they want to take advantage of the "benefits" of membership.

And since my UCRs are between the 80 to 100th percentile for my area, it doesn't hurt me financially to offer that sort of discount to patients who sign up for the program. QDP creates a win-win for the practice and keeps the third parties out of your office - or at least minimizes their impact.

Cooper: Should dentists be afraid to raise their fees?

Dr. Marut: Not if they go about it the right way. There's always the fear that if you raise your fees, your patients are going to go elsewhere. And it's a valid fear, especially in this economy.

Raising fees is a delicate process. It's a balancing act, and it's easiest if you stay on top of your fee schedule. If your fees are far lower than they should be and you raise them dramatically, you can bet that your patients are going to notice and complain. But if you raise your fees slowly over time and in keeping with local trends, it's unlikely that anyone will even notice and, if they do, they'll just chalk it up to inflation rather than blaming you for the fee increase. If you find your fees are low, I recommend raising them somewhere between 3% to 5% each year until you reach the 80 to 100th percentile for your area.

Cooper: Finally, what are some of the other benefits to adjusting your fee schedule, besides increased revenue?

Dr. Marut: It allows you to offer more value for your area. I realize that sounds counterintuitive if we are talking about raising fees, so let me explain what I mean.

Setting your fees at an appropriate level for your community ensures that you can operate more efficiently. When you have a healthy business, your patients reap the benefits. You can provide more services by reinvesting that extra income and buying better equipment, hiring new team members, training your staff so that they can serve your patients better, and of course, adding programs like QDP that directly benefit your patients.

The reality is that most people aren't actually looking for the cheapest dentistry available. The majority of patients want quality dentistry provided by a dentist they trust and who offers services at a price that's reasonable. They want value, not just the lowest possible price.

As long as patients know that what you're charging isn't outrageous and that your fees are within the normal range for the area, then it really becomes more about the quality of the relationship between your practice and your patients that determines whether they keep coming back.

Naomi Cooper is a dental marketing and social media expert and president of Minoa Marketing. In her 10 years in the dental industry, Cooper has written for a number of dental trade publications and lectures on a variety of practice management and marketing topics at meetings across the country. She can be reached by e-mail at [email protected].

Dr. Dan Marut, DMD, founded Quality Dental Plan to connect dentists looking to make a difference in their communities with new patients, while giving people without dental insurance a compelling reason to go to the dentist. He is also the founder of, a practicing dentist, a sought-after lecturer, and a published author. Dr. Marut is committed to giving back to his community and the world through his profession, and founded his practice and both of his companies with that vision in mind. For more information about Quality Dental Plan, visit Dr. Marut can be reached via e-mail at [email protected].

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