Dental Fee Schedules Explained

What is a Dental Fee Schedule?

A dental fee schedule is a comprehensive list of charges that a dental practice assigns to each procedure or service, typically referenced by CDT (Current Dental Terminology) codes. This schedule serves as the foundation for billing, insurance claims, and patient estimates. Fee schedules are essential for maintaining transparency, consistency, and compliance in dental billing, ensuring that every service—whether it’s a routine cleaning or a complex restorative procedure—has a clearly defined price.

Dental fee schedules are used by both dental practices and insurance companies. For practices, they guide how much to charge patients and what to submit on claims. For insurers, fee schedules help determine allowable amounts for covered services, which directly impacts reimbursement rates and patient out-of-pocket costs. Understanding your fee schedule is crucial for accurate billing, minimizing claim denials, and optimizing your accounts receivable (AR) process.

How Insurers Determine Fee Schedule Rates

Insurance companies use several factors to set their own fee schedules, which may differ significantly from a practice’s standard rates. Here’s how insurers typically determine these rates:

• Geographic Location: Insurers analyze regional cost data to establish what is considered reasonable for dental services in a specific area.
• Usual, Customary, and Reasonable (UCR) Fees: UCR rates are based on what most dentists in a region charge for a particular service. Insurers use UCR benchmarks to set their maximum allowable fees for out-of-network claims.
• Provider Contracts: For in-network providers, insurers negotiate contracted rates, which are often lower than UCR but come with the benefit of increased patient volume through the insurer’s network.
• Procedure Complexity: More complex or specialized procedures typically have higher allowable fees, reflecting the skill and resources required.

Insurance fee schedules are regularly updated to reflect market trends, regulatory changes, and cost-of-living adjustments. Practices should compare their own fees to insurer schedules to identify discrepancies and potential underpayments.

Using Fee Schedules in Your Practice

Effective use of your dental fee schedule can streamline billing, improve patient communication, and support financial health. Here’s how to integrate fee schedules into daily operations:

• Patient Estimates: Use your fee schedule to generate accurate treatment estimates, factoring in insurance allowable amounts and patient responsibility based on EOBs (Explanation of Benefits).
• Claims Submission: Always bill your full office fee (not the insurance-allowed amount) on claims. The insurer will apply their fee schedule and send an EOB indicating the allowed amount, patient portion, and any adjustments.
• Accounts Receivable (AR) Management: Regularly reconcile payments and adjustments against your fee schedule to ensure proper posting and to identify underpayments or denials that may require follow-up or appeals.
• Staff Training: Ensure your front desk and billing teams understand how to access and interpret the fee schedule, so they can answer patient questions and process claims accurately.

Best practice: Review your fee schedule annually and update as needed to reflect changes in costs, market rates, and insurance reimbursement trends.

Adjusting Fees: UCR, Network, and Out-of-Network

Dental practices must navigate several types of fee schedules, each with its own implications for billing and collections:

• UCR (Usual, Customary, and Reasonable) Fees: These are the standard rates charged by most providers in your area. UCR is the benchmark for out-of-network insurance reimbursements.
• Network (Contracted) Fees: When you join an insurance network, you agree to accept the insurer’s contracted rates, which are typically lower than your UCR fees. In exchange, you gain access to the insurer’s patient base.
• Out-of-Network Fees: If you are not contracted with a patient’s insurer, you may charge your full UCR fee. However, insurers will only reimburse up to their UCR maximum, and the patient is responsible for any difference.

To optimize revenue and compliance:

1. Regularly compare your UCR fees to local benchmarks and insurer schedules.
2. Negotiate with insurers during contract renewals to ensure your fees reflect current market rates.
3. Clearly communicate to patients any differences between your fees and what their insurance will cover, especially for out-of-network services.

Accessing and Updating Fee Schedule Information

Maintaining up-to-date fee schedules is critical for accurate billing and patient satisfaction. Here’s how successful practices manage this process:

• Accessing Fee Schedules: Obtain current insurer fee schedules by contacting provider relations or accessing your online portal. Save digital copies for reference and staff training.
• Updating Practice Fees: Review your own fee schedule annually. Consider cost increases, regional trends, and insurer updates. Adjust fees as needed to remain competitive and profitable.
• Software Integration: Use your practice management software to store and update fee schedules. Ensure all CDT codes are mapped to the correct fees for both standard and insurance-specific schedules.
• Communicating Changes: Notify staff of any updates and provide training on new fees or billing procedures. Update patient-facing materials, such as treatment plans and financial policies, to reflect current rates.

Best practice: Set a recurring calendar reminder to review and update all fee schedules at least once per year, or whenever you receive new insurer contracts or significant market changes.

By understanding and actively managing your dental fee schedule, your practice can maximize reimbursement, reduce billing errors, and provide clear, consistent information to patients and staff alike.