Outsourcing your billing department will help ensure you get paid on time for services rendered, but it’s also important to establish a solid fee structure to make sure you’re getting paid the right amount—and to not be afraid to adjust your fees when it’s time.
Many dentists are hesitant to raise their fees because they think it will cost them patients. The fact is, most patients expect the price of dentistry to go up from time to time. After all, if you never raise your fees, how can you ever improve the services you offer, or update your office?
I know it can be intimidating, so I’ve put together a few tips to help you properly adjust your fees and boost your practice revenues:
Do your research. Before you adjust your fees, find out what other dentists in your community charge. Make sure your fees aren’t too far below—or above—the local marketplace. Remember fees should reflect the level of care and the overall patient experience your practice offers.
Establish a solid fee for each service you offer. To do this, first determine how much it costs to perform the dentistry. Then base your fees on patient base, debt, overhead, expenses and your experience level.
Monitor your overhead expenses. Make sure your overhead expenses line up with industry benchmarks, which are: Laboratory: 10%, Dental and office supplies: 7%, Rent: 5%, Employee salaries: 19-22%, Payroll taxes and benefits: 3-5% of collections.
Plan for fee increases. Establish a solid fee for each service you provide and then plan to adjust those fees twice a year. I recommend you raise fees 2% the first time and 3% the second time for a 5% yearly increase. It might not seem like a lot but this slight increase will significantly boost your bottom line.
Avoid the fee ceiling trap. 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.
Communicate your fees with patients and make sure they understand your financial policy. When you combine this with outsourcing patient billing, you’ll not only finally get paid what you should for the services you offer, you’ll also get paid on time.