If you’re a dental practice owner trying to balance profitability with PPO participation, you’ve probably heard the term UCR fees tossed around. You’ve also likely seen the growing gap between what you charge and what you actually get paid from PPOs.
Here’s the million-dollar question (literally):
Are your UCR fees helping or hurting your PPO reimbursements?
In this guide, we’re breaking down the real differences between UCR and PPO fees—and showing you how optimizing your UCR strategy can be the secret weapon in your next PPO negotiation.
What Are UCR Fees?
UCR stands for Usual, Customary, and Reasonable. It’s the full, undiscounted fee your practice charges for a procedure before insurance adjustments.
Think of UCR as your “sticker price.”
It’s based on:
- Your location (zip-code-based benchmarking)
- Your practice’s historical pricing
- What other similar providers charge in your area
UCR fees aren’t just arbitrary numbers—they signal the value you place on your services. And yes, insurance companies are watching.
What Are PPO Fees?
PPO fees are the reduced, pre-negotiated rates you agree to accept from a PPO (Preferred Provider Organization) in exchange for patient volume and network listing.
When you sign a PPO contract, you agree to:
- Accept lower reimbursement rates than your UCR
- Follow their fee schedule
- Adjust off the difference as a contractual write-off
So if your crown fee is $1,200 (UCR), but your Delta Dental PPO contract only allows $750, you eat the $450 difference. Ouch.
UCR vs PPO Fees: Key Differences
Let’s get clear about how these two fee types differ:
| Category | UCR Fees | PPO Fees |
|---|---|---|
| Definition | Full fee charged by the practice | Contracted reimbursement rate |
| Set by | You | The PPO |
| Negotiable? | Always | Sometimes (but requires strategy) |
| Affects reimbursements | Indirectly | Directly |
| Purpose | Baseline for billing, negotiation | Actual payment received |
| Visibility | Patients and PPOs see it | PPOs define it |
Why UCR Fees Matter in PPO Negotiation
Here’s where things get interesting—and where many dentists get caught off guard:
PPOs often base their allowable fees in part on your submitted UCRs.
If your UCR fees are too low, you’re signaling to insurance carriers that you’ll accept less. That means when you try to negotiate higher PPO reimbursements, they can (and will) point to your own submitted fees as justification for saying “no.”
On the flip side, if your UCRs are too high—say, wildly out of line with regional norms—you risk triggering claim denials, audits, or just being ignored.
It’s all about balance.
The Impact of Outdated or Incorrect UCR Fees
Too many practices fall into one of these dangerous traps:
1. Set It and Forget It
You established UCR fees five years ago and haven’t revisited them. Since then, costs have gone up, but your fee schedule hasn’t.
Result: Your PPO reimbursements are suppressed because they track outdated UCRs.
2. Follow the PPO Fees Too Closely
You match your UCR fees to PPO reimbursement rates to avoid confusion.
Result: You cap your negotiating power and leave thousands on the table every month.
3. Overinflate UCR Fees Without Context
You crank up your fees 30% across the board without benchmarking or reason.
Result: You risk scrutiny, and the PPO sees the move as an attempt to manipulate the system.
How to Optimize Your UCR Strategy
Setting the right UCR fees is a balancing act of data, market research, and negotiation strategy. Here’s how to do it right:
1. Benchmark Regionally
Use reputable fee data (like Fair Health, Zip Code Fee Surveys, or consulting services) to see what practices in your area charge.
2. Segment by Procedure
Don’t apply a blanket percentage increase. Look at your top 20 most-billed procedures and ensure those are competitively—but reasonably—priced.
3. Adjust Annually
Inflation doesn’t skip dental practices. Update your UCR fees at least once a year to reflect your costs and regional trends.
4. Align Before Negotiation
Review and update your UCRs before initiating PPO negotiations. Your current UCRs will often be referenced during that process.
5. Bring in Expert Help
A dental fee schedule consulting firm can help you run the analysis and build a UCR strategy that won’t raise flags—but will raise your revenue.
Real-World Example: What One Fee Adjustment Can Do
Let’s say your current UCR for a crown is $1,000. Delta Dental’s PPO fee for you is $720. You’re writing off $280 every time.
But your market shows the average UCR for a crown in your zip code is $1,200. You adjust your UCR accordingly, with justification and documentation.
Now, when you go back to the PPO to renegotiate, you’re not arguing based on hope—you’re showing data:
- Regional comparisons
- Volume metrics
- Procedure complexity
- Updated overhead costs
That’s the kind of argument that can unlock PPO fee increases.
Bottom Line: Your UCR Is a Business Lever, Not Just a Number
Your UCR fee schedule isn’t just for show. It’s a powerful tool that influences:
- PPO negotiation leverage
- Perceived value of your services
- Revenue projections and budgeting
- Patient communication and pricing transparency
Too many practices treat UCR as an afterthought. Smart ones treat it as a strategic asset.
Ready to Optimize Your Fee Schedule?
PPO Negotiation Solutions specializes in building smart, data-backed UCR strategies that support long-term profitability—especially when it comes to PPO negotiations.
Don’t go into your next negotiation with outdated or underpriced UCRs. Let us help.
👉 Request a Free UCR Fee Analysis
Know your numbers. Maximize your leverage. Get paid what you’re worth.