🦷 What Are Dental UCR Fees and Why They Matter

Understanding the Foundation of Your Practice’s Profitability

If you’re a dental practice owner—especially one navigating the world of PPOs—you’ve likely
heard of UCR fees. But if your eyes glaze over when the term comes up, you’re not alone.

UCR fees—short for Usual, Customary, and Reasonable—are one of the most misunderstood
and yet most important components of your practice’s financial health.

Understanding how they work, how they’re calculated, and how to use them strategically can
unlock significant advantages for:

• PPO negotiations
• Out-of-network billing
• Membership plans
• Fee schedule optimization
• Profitability per procedure

In this post, we’ll unpack what dental UCR fees are, why they matter, and how to build a
strategy around them that supports long-term revenue growth.

💡 What Are UCR Fees?

UCR stands for Usual, Customary, and Reasonable. It’s a benchmark that insurance
companies use to determine the maximum reimbursement they will allow for a specific dental
procedure in a specific geographic area.

While each insurance company calculates UCR differently, the concept generally refers to:

• Usual: The fee a dentist usually charges for a service
• Customary: The range of fees charged by dentists in the same geographic area
• Reasonable: Whether the fee is justified based on the complexity of the procedure and
provider qualifications

UCR fees are not fixed or published by any one authority. They are determined by analyzing
data from regional dental offices, third-party fee schedule providers (like Fair Health or
DataQuest), or the insurance companies themselves.

🔍 Why UCR Fees Are More Than Just a Number

Many practice owners treat UCR fees as arbitrary or administrative—but in reality, they set the
foundation for your entire billing ecosystem.

Here’s how:

1. They Determine Your Position in PPO Negotiations

PPO carriers compare their contracted fees against your stated UCRs when negotiating. If your
UCR fees are too low, you’ve already given away leverage before the conversation starts.

Example:

If your crown UCR is $900 and the PPO offers $750, the discount is “only” 17%. But if your
UCR is $1,200, that same PPO offer is now a 38% discount—which gives you a stronger case to
negotiate or decline.

2. They Impact Out-of-Network Reimbursement

When you’re out-of-network, many carriers still base patient reimbursement on their internal
UCR data. But if your UCR fees are significantly below average, you risk:

• Lower patient reimbursement
• More frequent “balance billing” scenarios
• Reduced perceived value of your services

Setting realistic and regionally competitive UCR fees ensures your patients are reimbursed
fairly—even when you don’t accept their plan.

3. They Influence Internal Perception of Value

Low UCR fees don’t just hurt your contracts—they also impact how patients perceive the value
of your care.

Perception matters. If you’re charging $800 for a crown while the local average is $1,200,
patients may wonder:

• “Is this a discount crown?”
• “Are they using lower-quality materials?”
• “Am I missing something?”

Aligning your UCR fees with regional norms positions your practice as modern, confident, and
competitive—even if you participate in PPOs or offer internal discounts.

4. They Affect Patient Membership and Fee-for-Service Models

If you offer an in-house membership plan, the starting point for your discounts should be your
UCR fees—not your PPO fees.

Failing to distinguish between these two can lead to:

• Underpricing your services
• Offering discounts on already-discounted fees
• Training your patients to expect low-cost care that undermines profitability

🧮 How Are Dental UCR Fees Calculated?

There’s no single source of truth—but here’s how most third-party data providers and insurers
approach it:

• ZIP Code or Region-Based Aggregates: Based on data collected from practices in your
area.
• Percentile Benchmarks: Insurers may set reimbursement limits at the 70th, 80th, or
even 90th percentile of submitted fees.

• Procedure Type: Some procedures have wide variability (e.g., crowns), while others are
more standardized (e.g., exams).
• Provider Specialty: General dentists vs specialists may have different customary fees for
the same CDT code.

For example, a UCR database might say:

CDT Code     Procedure                                   80th Percentile Fee (ZIP 45236)
D2740             Crown, porcelain/ceramic            $1,298
D4341             SRP, 4+ teeth                                   $226 per quadrant
D1110              Adult prophy                                    $106

This means that 80% of dentists in your ZIP code charge less than or equal to this fee—and
20% charge more.

⚠️ Common UCR Fee Mistakes (That Could Be Costing You)

Let’s talk about the mistakes we see far too often in practices across the country:

❌ Mistake 1: Copying the PPO Fee Schedule as Your UCR

This undermines your leverage across the board. Your UCR should be higher than your
contracted PPO rates, not the same.

❌ Mistake 2: Never Reviewing or Updating UCR Fees

If your fee schedule hasn’t changed in 3+ years, you’re falling behind. Inflation, material costs,
and labor rates rise—your fees should, too.

❌ Mistake 3: Setting Fees Based on Emotion, Not Data

Undercharging to “stay affordable” can be well-intentioned, but it limits growth. Your fees
should reflect market data, cost structure, and service quality.

🧠 How Often Should You Review Your UCR Fees?

We recommend a comprehensive UCR fee review every 12 months. At minimum, assess your
top 30 most frequently billed procedures, which typically make up 80%+ of your production.

What to evaluate:

• How your UCR fees compare to regional 80th percentile
• How your PPO reimbursement compares to UCR
• Whether clinical documentation supports higher billing
• Which codes are routinely denied, downgraded, or underpaid

🧰 Tools for Reviewing UCR Fees

You can conduct your review using a combination of:

• Third-party UCR databases (e.g., Fair Health, DentalMenu, PracticeBooster)
• PPO Negotiation Solutions’ UCR Fee Analysis Services
• State association fee reports (if available)
• Benchmarking your own A/R and write-offs

And remember—this isn’t a one-time event. It’s part of a continuous improvement model for
practice profitability.

📈 What Happens When You Get UCR Right?

We’ve seen practices increase profitability by 15–30% annually just by:

• Raising UCR fees to match local percentiles
• Re-negotiating PPO contracts using updated UCR benchmarks
• Improving documentation to support higher value codes
• Reducing unnecessary write-offs tied to bad fee architecture

For example, a practice that increased its UCR on 25 key procedures saw:

• $96,000 in additional annual revenue
• Higher acceptance rates for membership plan patients
• Stronger leverage in Delta Dental fee negotiations
• Improved staff confidence when presenting treatment plans

📞 Ready to Review Your UCR Fee Strategy?

Whether you’re launching your first practice, acquiring a new one, or reevaluating your existing
billing structure, your UCR fees are the foundation of everything.

At PPO Negotiation Solutions, we help dental practices:

• Analyze their current UCR fee schedule
• Benchmark fees against local and national data
• Identify underpriced procedures
• Build a strategic roadmap for growth and profitability
• Integrate UCR insights into PPO contract strategy

📞 Schedule a Free UCR Fee Strategy Call Today
Let’s build a fee schedule that works as hard as you do.