06.19.09 Issue #380 Forward This Newsletter To A Colleague

Tom M. Limoli, Jr
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Balancing Your Practice's Fee Schedule

My company has tracked dental fees for the better part of the last quarter century. My father collected both international and domestic fees and fee schedules the same way some people accumulate postage stamps and coins. His detailed analysis of data was nothing less than a labor of love for his profession and how it functioned within the confines of differing world economies.

The tracking and reporting of dental fees is no different today. The sluggish economy complicated by rising unemployment and government intervention in the free market system is challenging capitalism as we know it. And guess what? All this shows up in the fees charged by doctors to their patients.

Not so long ago, it was common for dentists to raise their fees annually by 2% to 5%.  These fee raises were usually across the board, modifying each and every procedure code. But those days have gone by the wayside. The act of balancing fees is an art form pioneered by my father in his original 1984 textbook entitled The Dental Consultant Looks at Insurance with your Fee Schedule.  He and I perfected the process of fee balancing and relative value with our original 1995 text Fee for Service Dentistry with a Managed Care Component. In short, Limoli and Associates (www.LIMOLI.com) is the most accurate source for a comprehensive fee schedule analysis.

So what does the current fee data show?  In many parts of the country, dental fees are stagnant. We are not seeing dental fees statistically drop but we are seeing areas where the data has reached a plateau and is no longer in a growth posture. I see this also occurring as fewer and fewer dentists are routinely marking up their individual fees simply because the calendar says so.

In the few areas of the country where fee data is consistently rising, I see these increases as the effect of simple procedural reality. Artificially deflated fees simply and naturally rise as greater numbers of various procedures continually occur in that geographic area.

These two previous observations are complicated by the economic reality that many people simply have little or no confidence with the integrity and potential prosperity of Wall Street. People are holding on to their cash because they fear (real or perceived) yet another drastic economic shift. Too many analysts are still saying the financial situation is going to get much worse before it begins to get better.

Three things have to happen before the economy begins to grow on a foundation of rock rather than sand.

  • Banking and lending markets have to stabilize on their own without government intervention or other institutional manipulations
  • Service industries, including healthcare, need to fundamentally restructure how they do business in order to maintain a more competitive and cost effective posture in delivering their services
  • Corporate models must continue to trim out and whittle down the cost of goods sold while continuing to produce and develop newer market solutions to yesterday’s longstanding problems

In other words, business as usual is dead and gone. Old solutions are not going to fix the new economic problems that caused most of us to lose almost half the value in our Wall Street - based financial portfolios over the last year.

And what common denominator do all three phases share? The answer is fair market pricing. Fair market pricing is the amount of money that a willing buyer pays to acquire something from a willing seller, when a buyer and seller are independent and when such an exchange is motivated only by commercial consideration. What we are talking about is your unrestricted usual fee.

So where do your fees fit in? Is your data higher or lower than that of your neighbor? Is it that way by design and intent, or do you simply not know? Stop basing the future of your practice and fee schedule on randomly generated statistical percentile calculations. Now is the time to have your fees professionally analyzed. Your potential as well as active patient base is shopping for quality, price and value. Unfortunately, not always in that same order. But then again, aren’t you?

If you are interested in having a comparative Fee Schedule Review 7 page report detailing 216 of the most often performed dental procedures compared to your existing fee schedule compiled for your zip code, please email info@mckenziemgmt.com.

Tom Limoli, Jr. is the prevailing expert on proper coding and administration of dental insurance benefit claims. He serves as president of Limoli and Associates/Atlanta Dental Consultants, Inc., a company that over the past quarter century has assisted dental offices in streamlining the insurance reimbursement process.

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