How to Keep Your Practice's Finances in Check

If you're a dental practice owner or manager, you've probably heard the term UCR – Usual, Customary, and Reasonable – used to describe the fees you charge for services. But here's a question for you: When was the last time you actually evaluated whether your UCR is still, well, UCR?

The dental industry is constantly evolving, and with it, the costs of running a practice. From supplies to staff wages, to even rent increases, everything impacts your bottom line. Yet, many practices overlook one critical piece in their financial puzzle: their fee schedule. If you haven’t reviewed and updated your fees in a while, you could be undercharging for your services, or worse, charging fees that are out of step with the current market in your area. So let’s dive into how often you should update, when the best time is to do it, and what tools you can use to ensure your fees reflect the reality of your area.

How Often Should You Update Your Fee Schedule?

A good rule of thumb is to review your fee schedule annually. Why? Because costs and market conditions change. By updating your fees regularly, you ensure that you’re charging a fair price for your services – both for you and your patients.

The beginning of the year is an ideal time for fee updates. Not only does this align with most business' fiscal planning, but it also lets you start the year off with a fresh financial strategy. If it’s been a while since you last updated, now is the perfect time to dig in and analyze your fees.

When to Update Your Fees?

Aside from an annual review, you should consider revisiting your fee schedule if there are major changes in the market. Some examples include:

• Inflation spikes: Rising costs in supplies or overhead are good indicators that your fees might need adjusting.

• New technology or equipment: If you’ve invested in new tools or treatments that provide added value to patients, your pricing should reflect that.

• Significant local or regional economic shifts: Is your town growing? Has the local cost of living changed? Fees should keep up with these changes.

The key takeaway: Don’t wait for three years to pass before reviewing your fees. Regular evaluations keep your practice profitable and aligned with the current market conditions.

Resources to Help You Update Your Fees

Now that you know how often and when to update your fees, let’s talk about how to determine if your UCR is really UCR. There are great tools and resources available to help you compare your fees to the local market, so you’re not flying blind.

Here are a few options:

1. FairHealth.com: This website provides a wealth of data on average healthcare costs by region. It allows you to compare your fees to those in your area based on real, patient-reported data. This can be a fantastic starting point for determining if your fees are in line with others in your region.

2. Fee Analysis Services from Dental Supply Companies: Companies like, well, let’s just say one that rhymes with "Menry Mine," offer fee analysis services. These are often free for customers and provide detailed reports comparing your fee schedule to local averages. This gives you specific insights into what your competitors are charging and helps you stay competitive without undervaluing your services.

3. State and Local Dental Associations: Many dental associations provide members with access to fee surveys or cost-of-living adjustments specific to the dental industry. These reports can give you a broader sense of pricing trends in your area or state.

How to Implement a Fee Increase

Once you've decided to update your fees, how do you implement the changes without causing patient concern? Here are a few tips:

• Communicate with transparency: Let your patients know why fees are increasing, focusing on the value they’re getting. Whether it’s new technology, better materials, or simply keeping up with inflation, patients appreciate transparency. Additionally, practices may consider honoring their current rates for treatment plans presented within a date range (typically 90 days).

• Stagger the increases: If you’re concerned about raising fees too much at once, consider phasing them in over a few months.

• Train your staff: Make sure your front office team is prepared to explain the changes confidently and in a patient-friendly way. They’re often the first line of communication for patients.

In Conclusion: Now is the Time

If you haven’t evaluated your fee schedule in the last year, now is the perfect time to do it. Regular updates ensure that your practice remains competitive, profitable, and aligned with the market. Use tools like FairHealth.com and fee analysis services from supply companies to compare your fees to local standards, and don’t be afraid to make adjustments when necessary.

Keeping your fees up to date isn’t just about staying profitable—it’s about ensuring you’re delivering the best value to your patients while maintaining a financially healthy practice.

So, is your UCR really UCR? Let’s make sure it is! Start your fee evaluation today and set your practice up for success in the new year.