The Practice Support Team tracks trends in data collected from practices throughout the year.
In 2024, we learned that average office fees remained essentially flat at the 58th percentile for their respective zip codes compared to our 2023 statistics.
Just 11% of the practices we analyzed in 2024 had healthy fee ranges in the 80th percentile or higher. Given the increasing overhead practices are experiencing, there is much room for improvement.
In addition, most practice fee schedules needed to be rebalanced, with some fees set below the 40th percentile, above the 95th percentile, or somewhere haphazardly between. The first step is balancing the practice fee schedule with an accurate data source compiling filed insurance claims from your zip code. Contact your Burkhart Account Manager for fee data for your zip code. Once balanced, consider an annual fee increase of 4% for 2025, as recommended by McGill Advisory and Cain Watters.
Why 4%?
Although inflation has eased, the dental sector still grapples with above-average expenses, eroding profit margins. Rising staff wages due to labor shortages and equipment and technology expenses necessitate a fee increase to offset these challenges. Practice owners must continue adopting new technologies to support digital workflows and meet patient expectations in a competitive market. Consequently, higher costs make fee increases essential.
Don’t Believe the Managed Care Myth
You might think that participating in managed care plans limits your profit potential. However, consider these benefits:
- Negotiation Power: Well-positioned fees enhance your ability to negotiate and renegotiate with managed care companies.
- Dual Income Families: With 60% of the population being dual-income families, there are more opportunities for dual coverage, allowing you to bill up to your full office fee.
- Annual Increases: Regular fee increases contribute to a higher fee profile in your area, boosting the likelihood of higher future reimbursements.
- Private Pay Patients: Approximately 15- 20% of patients are private pay.
- Out-of-Network Patients: Patients who are out-of-network can be balance-billed.
- Attractive Transitions: Healthy fees make your practice more appealing during ownership transitions, as new owners prefer to avoid sudden or significant fee hikes.
- Maintaining Overhead: Healthy fees help maintain a balanced overhead.
Realize an Immediate and Substantial Impact
With 30 codes accounting for 90% of billable production in most practices, getting those fees at a healthy level is critical. Let’s run through the math to fully understand the impact of moving your fees to a healthy percentage. Remember that if you are not currently in the 80th percentile, your overhead will also appear higher than the accepted healthy range. The higher your fees, the lower your percentage of overhead will be relative to your total collections. A change from the 60th to the 80th percentile may mean only a tiny difference to the patient. However, when you multiply the frequency of each code used in your practice, you will quickly see the potential impact even a slight increase can have.
Code |
Current Fee
|
80th Percentile Fee |
Frequency |
Difference |
|||||
|---|---|---|---|---|---|---|---|---|---|
| D0120 |
$62 |
$72 |
1122 |
$8,757 |
|||||
|
D0274 |
$73 |
$87 |
606 |
$8,484 | |||||
| D1110 |
$109 |
$123 |
1030 |
$14,420 | |||||
|
D2392 |
$275 |
$311 |
266 |
$9,576 | |||||
|
D2950 |
$320 |
$359 |
162 |
$6,318 | |||||
| TOTAL | $50,018 |
What would happen for your practice if ALL your fees were optimized AND increased yearly? Practices that fail to raise fees annually will certainly suffer financially through higher overhead and lower profits over their remaining career.
Plan to adjust your fees now. Burkhart’s Practice Support Team welcomes the opportunity to support your healthy business in 2025 and beyond. We are committed to your practice’s business success.
Reach out for your zip code-specific Fee Analysis, complimentary for our Supply Savings Guarantee and Platinum clients or available to all Burkhart clients for $99 through Jan. 31st, 2025.
Your success is our success. Please reach out to us anytime.
To learn more, visit the Practice Support Team page, email us at PracticeSupportTeam@BurkhartDental.com, or call 1.800.665.5323.
Category: Practice Consulting
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