A Step-by-Step Guide to Building a Strategic, Profitable UCR Fee Schedule
Whether you’re opening your first dental practice, acquiring a second location, or finally getting
serious about profitability, your fee schedule isn’t just an internal document—it’s a strategic
asset.
Yet far too many practices rely on outdated methods to set their fees:
• Guesswork
• Local competitor copying
• PPO reimbursements
• “What we’ve always charged”
These shortcuts leave money on the table, undermine your negotiations, and create pricing
inconsistencies that frustrate both your team and your patients.
This guide walks you through how to set dental fees that are fair, competitive, data-driven, and
aligned with your value—starting with UCR (Usual, Customary, and Reasonable) fee
foundations.
📌 Why You Should Take Fee Setting Seriously
Before we dig into tactics, let’s answer the bigger question: Why does your fee schedule matter
so much?
Because it directly affects:
• 💸 Your revenue per procedure
• 💼 How insurance companies calculate your reimbursements
• 📊 What leverage you have in PPO negotiations
• 💡 How patients perceive your value
• 🧾 How you structure discounts, write-offs, and memberships
Put simply: If your fees are too low, your business is leaking money. If they’re too high
without justification, you lose trust and volume.
Setting them strategically is the key to profitability without burnout.
✅ Step 1: Define Your Clinical Scope and Profit Goals
Start by reverse-engineering your desired profit—not just reacting to what PPOs or competitors
pay.
Ask yourself:
• What is your target production per provider?
• What are your fixed and variable overhead costs (labor, materials, lab fees, rent, etc.)?
• What do you want your net profit margin to be? (A healthy dental practice should aim
for 40–50% gross margin.)
• What procedures make up the bulk of your production?
You can’t set effective UCR fees without understanding the financial model of your business.
📌 Pro Tip: Create a list of your top 25–30 most billed CDT codes. These will become the core
of your optimized schedule.
✅ Step 2: Gather Regional UCR Fee Data
You can’t charge blindly. Your fees need to be competitive within your region, especially if
you’re participating in PPOs or serving out-of-network patients.
Where to find UCR benchmarks:
• Fair Health Consumer database
• PracticeBooster’s Fee Survey tools
• PPO Negotiation Solutions’ custom UCR analysis reports
• State or local dental society surveys
• Insurance EOB data from your own past claims
When analyzing these sources, focus on percentile rankings, especially the:
• 80th percentile (aggressive, but defensible in high-service practices)
• 70th percentile (common baseline for growth-focused GPs)
• 50th percentile (safe, but often too low to support leverage)
📌 Pro Tip: Analyze ZIP-code-based data, not state or national averages, for more precise
comparisons.
✅ Step 3: Align Fees With Time, Materials, and Value
Now that you have UCR benchmarks and production goals, it’s time to analyze each code based
on the actual resources it consumes.
Factors to include:
• Average chair time for the procedure
• Staffing required (hygienist, assistant, etc.)
• Materials and lab fees (especially for crowns, dentures, implants)
• Provider expertise or credential level (are you a GP or specialist?)
• Risk level (complexity, liability exposure)
• Perceived value by patients (esthetic work often carries higher perceived worth)
Example: If a posterior composite takes 45 minutes, requires two staff, and involves premium
materials, a fee of $150 may be too low—even if it’s common in your area.
📌 Pro Tip: Use a fee-per-minute or fee-per-hour model to validate whether your fees are
covering your costs and time.
✅ Step 4: Establish Your UCR Fee Schedule (Don’t Use PPO Fees!)
Here’s the golden rule: Never copy your PPO fee schedule and call it your fee schedule.
PPO fees are discounted rates, negotiated by insurers to reduce their cost—not maximize your
profitability.
Your UCR fees should be:
• Higher than any contracted PPO fee
• Aligned to the 80th percentile or above where justified
• Updated at least annually
• Used as the baseline for all adjustments (membership plans, in-house financing, courtesy
discounts)
📌 Pro Tip: Create separate schedules in your PMS for:
1. UCR (full fee)
2. PPOs (contracted fees)
3. In-house plan pricing (discounted UCR)
This allows for transparency, proper reporting, and stronger negotiation leverage with payers.
✅ Step 5: Review and Adjust Regularly
Markets change. Overhead increases. PPO contracts shift.
If you’re not reviewing and adjusting your fee schedule at least once a year, you’re already
falling behind.
When to review:
• Annually during strategic planning
• Before any PPO contract renewal
• After significant cost increases (labs, payroll, materials)
• When adding new procedures or technology
What to review:
• Are your top 30 codes still in line with your UCR goals?
• Are there any codes where you’re consistently losing money or writing off large
amounts?
• Are new procedures missing from your fee schedule altogether?
📌 Pro Tip: Flag codes that are routinely downgraded, denied, or require frequent appeals.
These often need either better documentation or strategic adjustments.
⚠️ Mistakes to Avoid When Setting Dental Fees
❌ Guessing Based on What “Feels Right”
If you’re basing fees on emotion or assumptions about patient affordability, you’re
undercharging.
❌ Charging Less Than PPO Allowables
Never set your UCR fee below what you’re paid by a PPO. It undermines your negotiation
leverage.
❌ Relying on the Same Fee Schedule for 5+ Years
Inflation, cost of living, and wage growth all change. Your fees should too.
❌ Copying Competitors Without Context
Their business model, cost structure, and PPO mix aren’t yours. What works for them might not
work for you.
💡 Why This Matters: Your Fees Are a Reflection of Your Value
Your fee schedule does more than determine what gets billed. It communicates your:
• Standards of care
• Level of expertise
• Commitment to quality
• Business priorities
When your fees are too low, you’re sending the message that your work isn’t worth more. And
when you undercharge, you under-earn—even if your schedule is full.
📈 What Happens When You Get It Right?
We’ve seen practices grow collections by 15–25% without seeing more patients just by updating
their UCR fees.
For example:
• A startup GP practice in Texas raised 20 key fees by 18% across the board
• They retained 97% of their PPO patients
• They improved monthly collections by over $14,000
• Their patient acceptance rates increased after clearer communication about value
Bottom line: You don’t have to squeeze in more patients to grow—you just need to stop
undercharging.
🛠️ Need Help Setting or Reviewing Your Dental Fees?
At PPO Negotiation Solutions, we help practices like yours:
• Benchmark UCR fees by ZIP code and specialty
• Rebuild custom fee schedules aligned with overhead and profit goals
• Identify underperforming codes and revenue leaks
• Integrate new fees into your PPO negotiation and billing strategies
Whether you’re a startup trying to set your very first fees, or a seasoned practice owner who
hasn’t updated in five years—we’ve got your back.
📞 Book a Dental Fee Schedule Consultation
Let’s make sure your fees reflect your value and support your growth.