Dealing with insurance companies isn’t an easy task. You work very hard to deliver quality dental care to the patients, yet the reimbursements you receive for these services are rarely justified.
And that’s the case with most dental practices. They’re underpaid because they don’t renegotiate their dental fee schedules, losing thousands of dollars every year!
But you can easily fix that with the right approach.
Whether you’re a solo practitioner, a small group practice, or a big corporate DSO, this blog is helpful for you.
Here, we’ll guide you through the effective strategies to negotiate dental fee schedules with payers and set reimbursement rates for profitable dental billing services.
What are Dental Fee Schedules?
Before discussing the process, let’s understand what dental fee schedules are and how they work.
To make it simple, payers publish the fee schedules, in which they provide lists of the maximum allowed amount they cover for each dental procedure. In most cases, when you enroll in an insurance network, you agree to accept the fees in full.
The allowed amount is lower than your regular fee, and you have to write off some portion of your fee as a contractual adjustment. A patient’s insurance plan makes additional adjustments if the patient has to pay coinsurance, copays, and/or a deductible.
Your contracted fee schedules determine what you’re paid for each procedure.
Bonus tip: Make sure that current schedules are updated in your systems, as these affect dental billing, budgeting, payroll, expense tracking, and overall financial management. Updated systems make it easy to predict your revenue and keep finances healthy.
What Do You Need To Know Before Negotiating Dental Fee Schedules?
Payers set their own dental fee schedules with different rates for each state/region, plan type, and CDT code.
Check your contract with the insurer and see what they pay for dental procedures, and compare their reimbursement rates with the regular dentist’s fees in your area.
Negotiation Rules in Each Plan
Check your payer policy rules in the contract to see if it’s flexible for negotiation.
Indemnity Contract
If you get enrolled in the traditional indemnity contract, they pay a percentage of your area’s UCR rate. However, their UCR rate may be different from what you expect. They use their own data to determine the UCR rate and update their internal dental fee schedules as per their own timelines.
But the issue is that you don’t know what the payer is going to pay. There isn’t a contracted fee schedule, and you aren’t bound to accept a fixed amount as payment. In indemnity, you know the amount when the payer reimburses a claim, and you send patient bills to receive the remaining amount. You can charge them for the remaining amount.
Example: $1200 is the UCR fee for a crown in your area, and you charge patients accordingly. However, the payer might conduct its own research and determine $980 as the UCR fee for the crown. They pay 80% of their own UCR fee. You can charge the patient for the remaining amount. In this case, the insurer pays $984, and you can bill the patient the remaining $216.
PPO Contract
Most companies have now shifted from the traditional indemnity contracts to PPO contracts. In a dental PPO plan, insurers mostly have their fixed dental fee schedules. You know what you’re going to receive in payment.
The PPO plan offers a discount of your UCR rate if you’re in-network. They might pay you according to your UCR if you’re out-of-network.
If you’re in-network, you have to accept payers’ dental fee schedules, agreeing to the maximum amount they pay for procedures. You can’t charge patients above that, and have to write off the remaining amount.
Since the fee is fixed, the payer may not change their rates. But that doesn’t mean you should give up!
PPO contracts can be flexible if you use the right dental credentialing services. By working with credentialing experts like TransDental, who regularly handle contracts and fee schedule negotiations, you get better chances to convince the payer to change the rates. These experts know effective strategies to negotiate with payers and justify your request to increase the rates.
DHMO Contract
In a DHMO (dental health maintenance organization) contract, there isn’t much room for negotiation. Most practices must accept the same rates across the network, and reimbursement isn’t as profitable as in a PPO plan. It’s because DHMO is a budget-friendly plan, where patients don’t have to pay much copays and deductibles.
Since the payer fee is lower for patients in a DHMO plan, benefits are limited, and it also affects your reimbursement.
Due to the tight budget, there isn’t much room for negotiation. You still might negotiate if you have a higher patient volume and are willing to terminate the contract, but still, reimbursement rates aren’t as profitable as in other plans.
Fee Schedules of All Payers
To compare fees, check the fee schedule from all insurance companies you’re contracted with. You may call them via phone, request via email, or see rates in the payer portal.
When you compare reimbursement rates for the same procedure in the same area across different payers, you’ll find gaps.
Example: There may be a $200 gap in the reimbursement fee for D2740 (crown) in a Delta Dental fee schedule and a Cigna fee schedule. You can negotiate with the less-paying insurer for the gap.
Top Procedure Codes by Revenue
Check the dental procedures that drive the most revenue in your practice. You can find the data in your practice management software, which helps you understand the most billed codes and more revenue-generating procedures over the past year, so you can focus on negotiating higher rates for these procedures.
Sometimes, you may prefer patient volume, which may be higher for low-cost or regular procedures. On the other hand, you may consider the value of the service. One high-cost service may be worth multiple low-cost services.
Example: You can negotiate higher reimbursement for D0120 (periodic oral evaluation) and D1110 (adult prophylaxis), because these are among the most common dental procedures across the country. Studies reveal that over 65.5% of dental patients get a dental exam or a cleaning each year.
While the reimbursement rate for a regular cleaning and exam may have a lower value than an implant, they may generate higher revenue, based on patient volume.
Local UCR Rates
While it’s obvious that insurers’ allowed amount is lower than the UCR rate, it shouldn’t be much below the local fare.
So, you should know what other dentists in your area charge for the same dental procedures. You can check by checking the fee schedules of other dentists, which might be available on their websites, or use third-party fee analysis tools.
If you’re being paid less than other dentists, you have a strong reason to request the payer to increase your fee.
How to Write Request Letters to Increase Dental Fee Schedules?
The best way to negotiate dental fee schedules with insurers is to send request letters. You must back up your request with data, such as patient volume, practice expenses, and UCR fees, so you can convince the payer to increase reimbursement rates.
But make sure that you use a professional and respectful approach in your letter to persuade the payer and secure rates that make your dental billing and coding profitable.
The following points make your request letter strong:
- Practice details like the contact details, dentist’s name and NPI, tax ID, and insurance contract number
- The specific fee schedule that needs review
- A list of high-volume procedures in the practice
- A comparison of the current reimbursement rate with the local UCR fee
- A list of increases in overhead, like lab supplies, staff wages, and utility costs
- A specific percentage increase request, like 15% or 20% increase in reimbursement rates
- Supporting data to prove your practice’s value, such as years of experience, revenue generated for the payer, and a high number of treated patients
- A deadline for response, which is mostly 30 to 60 days
This is a sample letter for price increase:
Re: Request for Fee Schedule Review – [Dentist Name, NPI: #######, Contract #: ######]
Dear [Recipient Name],
I am writing to request a review and adjustment of our current fee schedule for your plan. Over the past 12 months, our practice has consistently provided high-quality dental care to 350 of your members, generating $425,000 in reimbursements and serving 200 patients covered under your plan.
Rationale for Request:
High-Volume Procedures:
- D1110 – Adult Prophylaxis (180 patients/year)
- D0210 – Full-Mouth X-rays (120 patients/year)
- D1351 – Sealants (90 patients/year)
- D2750 – Crown, porcelain fused to high noble metal (50 patients/year)
Current vs. Local UCR: Our current reimbursement rates are on average 18% below the local usual and customary fees for these services.
Rising Practice Costs:
- Staff wages increased by 10%
- Lab and material costs increased by 12%
- Utilities and operating expenses increased by 8%
Practice Value: With 15 years of experience and a proven track record of serving your members, our practice represents a vital access point for your network.
Based on this data, we respectfully request a 20% increase in reimbursement rates for the procedures outlined. We believe this adjustment reflects the value we bring to your network and ensures continued access for your members.
We kindly request a response within 45 days to allow us to plan accordingly. Please contact me at [phone/email] for any additional documentation or discussion regarding this request.
Thank you for your consideration, and we look forward to continuing our partnership in providing quality care to your members.
Sincerely,
[Signature]
[Name, DDS/DMD]
[Practice Name]
[NPI] | [Tax ID]
Best Tips to Negotiate Dental Fee Schedules
Here are a few tips that make your request case strong and convince the payer to review and revise dental fee schedules:
Review Dental Fee Schedules Frequently
Most contracts between insurance companies and dental practices last 3-5 years. While practice costs increase due to rising inflation, fee schedules remain the same. As a result, your profits are lower, and you’re prone to losing revenue.
To prevent that, compare your dental fee schedules with your practice expenses, UCR rates, and overall financial health. Conduct dental billing audits after every four months or at least once a year to analyze your fee schedules.
If the reimbursement rates don’t justify your level of service and aren’t profitable enough, negotiate with the payer.
Contact Multiple Payers
If you’re enrolled with multiple insurance contracts, don’t limit your negotiations to just one payer. Contact multiple payers, so you can secure reimbursement rates with everyone at the same time, and don’t miss out on revenue opportunities.
It’s also helpful if one payer rejects your request, you have other available opportunities, where you can focus on improving your reimbursement rates.
Escalate Negotiation After First Rejection
Insurers may not approve your first request to revise dental fee schedules. While most practices give up after that, you shouldn’t consider it a final decision.
Insurers may take time to review their decision and may change it once you validate your request with strong data to back it up.
So, request an escalation and contact the senior managers or relevant decision makers in the insurance company. If the initial representative denies, seniors may approve it as they have more authority and a better understanding of the market dynamics.
Read the Contract After Approval
Once insurers approve your fee schedule request and renew the contracts, read what new rates they’re offering and match them with your UCR rate and practice expenses.
They may offer the rates that suit your finances, but they may also add some contract terms or clauses, which may not be favorable.
So, review it and only sign the contract if it offers feasible reimbursement rates and terms for your dental practice.
Bonus tip: Once you secure a fee increase, track reimbursements, revenue, write-offs, and claim processing for the first 90 days after negotiation. With that, you can measure your ROI and verify if the insurer correctly implements the new rates.
Conclusion
Dental fee schedules are the most important part of your practice revenue. Without the right and updated fee schedules, you can’t:
- Manage your finances
- Run your practice
- Provide quality care to patients
So:
- Audit and review your fee schedules quarterly or annually
- Gather important data like your area’s UCR rate, revenue generated for payer, and practice expenses
- Initiate a request to the payer to renegotiate your contracts and fee schedules
With the right strategy and approach, you can secure high reimbursement rates, maximize profitability, and drive overall revenue growth for your practice.
Frequently Asked Questions (FAQs)
Can any dental practice negotiate its dental fee schedules with insurance companies?
Virtually any in-network dental practice can request a fee schedule review and renegotiation. Carriers are more likely to agree when you provide supporting data such as local UCR comparisons, your patient volume with that carrier, and documentation of increased overhead costs.
How long does it typically take to renegotiate a dental fee schedule?
Some smaller carriers respond within 30 to 45 days, while larger companies can take 60 to 90 days or more. Always set a follow-up reminder in your calendar and follow up with insurers politely.
What percentage increase should I ask for when renegotiating dental fee schedules?
Most dental billing experts recommend requesting a 10% to 20% increase as a starting point, depending on how far your current reimbursements are from local UCR benchmarks. Always justify the number with data that supports your reasoning.
What data do I need to negotiate my dental fee schedules effectively?
The most important data points include your current fee schedule from each carrier, top procedure codes by revenue, local UCR fee benchmarks, monthly patient volume per carrier, and total write-off amounts.
Should I use a dental billing company to help negotiate my fee schedules?
Working with an experienced dental billing company can significantly improve your results. Billing professionals have carrier contacts, access to industry fee data, and experience negotiating with specific insurers. They also handle follow-up communications, freeing your team to focus on clinical care.
