Fee-for-Service Dentistry Explained

What Does Fee-for-Service Mean in Dentistry?

In dental billing, fee-for-service (FFS) refers to a practice model where patients pay directly for each dental procedure performed. Unlike insurance-based models, FFS practices set their own fees for services—such as exams, cleanings, and restorative work—using the current CDT (Current Dental Terminology) codes for accurate billing and documentation. Patients may pay at the time of service and, if they have out-of-network dental benefits, can submit their own claims to insurance for potential reimbursement. This model gives dental offices full control over pricing, treatment planning, and collections, without being bound by insurance fee schedules or network restrictions.

Pros and Cons of Fee-for-Service Model

Pros:

• Greater Autonomy: Dentists can set their own fees and treatment protocols, focusing on optimal patient care rather than insurance limitations.
• Streamlined Billing: Offices avoid the complexities of insurance verification, pre-authorizations, and claim appeals, reducing administrative overhead.
• Improved Cash Flow: Payments are typically collected at the time of service, minimizing accounts receivable (AR) and reducing the risk of denied claims.

Cons:

• Patient Affordability: Without insurance coverage, some patients may delay or decline treatment due to out-of-pocket costs.
• Reduced Patient Volume: Practices may see fewer new patients, as many individuals seek providers within their insurance networks.
• Marketing Demands: FFS practices often need to invest more in patient education and relationship-building to communicate the value of their care.

How It Differs from Insurance-Based Practice

In an insurance-based dental practice, the office contracts with dental insurance carriers and agrees to accept negotiated fees for covered services. This requires a robust insurance workflow, including:

• Insurance Verification: Confirming patient eligibility and benefits before appointments, using payer portals or direct calls to carriers.
• Claim Submission: Filing electronic or paper claims with accurate CDT codes and supporting documentation.
• Explanation of Benefits (EOB) Review: Analyzing EOBs to ensure correct payment and identify underpayments or denials.
• Claim Appeals: Following up on denied claims with appeals, additional documentation, or corrected claims as needed.

Insurance-based practices often experience longer revenue cycles, increased AR, and administrative burdens, but may attract a larger patient base due to network participation and lower out-of-pocket costs for patients.

Financial Implications for Patients and Providers

For Patients: In a fee-for-service model, patients are responsible for the full cost of care at the time of service. While this can be a barrier for some, it also allows for transparent pricing and personalized treatment planning. Patients with out-of-network benefits may still receive partial reimbursement by submitting claims themselves, but should be educated on how to interpret EOBs and track their claims.

For Providers: FFS practices benefit from immediate payment and reduced AR, but must be proactive in communicating value and managing patient expectations. Insurance-based practices, on the other hand, must be adept at navigating claim processes, tracking outstanding balances, and appealing denials to maintain healthy cash flow.

Deciding the Right Model for Your Practice

Choosing between fee-for-service and insurance-based models depends on your practice’s goals, patient demographics, and operational strengths. Consider the following best practices:

• Evaluate Your Market: Assess local demand for FFS dentistry versus insurance-driven care. Analyze patient preferences and competition.
• Review Financial Projections: Model expected revenue, AR, and overhead for each approach. Factor in marketing and patient education needs for FFS.
• Optimize Workflows: For FFS, focus on patient communication, transparent billing, and value-driven care. For insurance-based, invest in staff training on insurance verification, claim submission, and appeals.
• Stay Compliant: Regardless of model, use accurate CDT coding, maintain thorough documentation, and follow industry standards for dental billing and collections.

Ultimately, the right model is the one that aligns with your clinical philosophy, financial goals, and the needs of your patient community. Many successful practices blend both approaches, offering FFS options while participating selectively with insurance plans to maximize flexibility and growth.