The Practice Support Team tracks trends in data collected from practices throughout the year.

In 2023, we learned that average office fees continue to be low, in the 58th percentile for their respective zip codes, and only 9.8% of the practices we analyzed had healthy fee ranges in the 80th percentile or higher.

In addition, most practice fee schedules were unbalanced, with some fees set below the 40th percentile while others were placed above the 95th percentile. The first step in determining your fee increase for next year is balancing the practice fee schedule with an accurate data source that compiles 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 5% for 2024, as recommended by McGill Advisory.

Why 5%?

While inflation has slowed, the consumer price index (CPI) is recording a 3.7% increase as of September 2023, and the dental sector continues to face higher-than-average expenses, eroding profit margins. The tight labor market will likely impact overall employee wages, with a projected increase of 4-5% in 2024, all while technology costs continue to rise. Practice owners will continue to need to implement modern technology, support a digital workflow, and meet patient expectations in a competitive market. Higher costs necessitate an increase in fees.

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 percentile. Keep in mind 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 small 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. 

For Example:

Code

Current Fee
(60th percentile)

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 if ALL your fees were optimized AND increased each year? Practices that fail to raise fees annually will certainly suffer financially through higher overhead and lower profits over their remaining career.

Don’t believe the Managed Care Myth

  • You may think you can’t realize these profits due to your participation with managed care plans. Here’s the truth:
  • You have private pay patients in your practice (conservatively 20%).
  • You have out-of-network patients.
  • 60% of the population comprises dual-income families*, leading to more dual-coverage opportunities, allowing you to bill up to your full office fee.
  • Well-positioned fees fuel your negotiating (and renegotiating) power
    with managed care companies.
  • Annual increases will contribute to a higher fee profile for your area, increasing the chances of higher reimbursements in the future.
  • Healthy fees make your practice more attractive during transitions. New owners do not want the burden of sudden or dramatic fee increases.
  • Healthy fees help your practice maintain a healthy overhead.

Plan to adjust your fees now. Burkhart’s Practice Support Team welcomes the opportunity to support your healthy business in 2023 and beyond. We are committed to your practice’s business success. Reach out for your zip code-specific Fee Analysis, which is complimentary for our Supply Savings Guarantee and Platinum clients.
*bls.gov

Your success is our success. Please reach out to us anytime.
Learn more, visit the Practice Support Team page, email us at PracticeSupportTeam@BurkhartDental.com, or call 1.800.665.5323.

Burkhart Dental Supply – Practice Support Team

Category: Practice Consulting

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