The letters “UCR” in insurance stand for usual, customary, and reasonable. These are the fee guidelines by which an out-of-network dentist is allowed to charge a patient if the dentist is not a member of the patient’s PPO network. This does affect the patient’s claim payment and how much they are to pay out-of-pocket. You must properly balance your fee schedule to at least 80% in the beginning to ensure your practice remains competitive. By doing this, it allows you room for re-negotiation in the future. The dental benefit contracts you initially obtain from an insurance provider are based on your UCR fee schedule. Therefore, make sure you balance your fees before you negotiate for a PPO reimbursement contract.
Why is a UCR Fee Schedule Important?
Insurance providers control their expenses by using the UCR fee schedule. Each dental procedure is listed, as well as how much the provider has determined each procedure should cost. The benefits paid on your patient’s claim is determined by this list of fees. UCR fees are involved when using indemnity and PPO dental insurance plans. The insurance provider will pay a percentage of the cost they have determined based upon the dentist’s charges or their UCR fee for the procedure, whichever is less.
What Do Geographics Have to Do With It?
The UCR fee levels are different in each state and community. Take for instance the price of a crown is $1,000. If the percentages for the area are in the 80th percentile, it means 80% of the dentists in that state or region charge $1,000 or less for a crown.
If your dental practice is a member of the American Dental Association, you may obtain a survey which contains self-reported fees by procedure from a nationwide, random sample of dental offices. There are over 200 dental procedures listed by specialists and general dentists and their fees charged. If your practice is not a member, you may purchase this list of fees from the ADA Catalog.
However you decide to negotiate fee schedules with the PPOs in your area, it’s best to do the following idea:
- call the largest employers in your vicinity
- ask their Human Resources Department to which PPO they belong
- check out their list of UCR fees
- determine which PPOs your dental practice would be compatible with
- then begin your negotiations
How Can UCR Fee Schedules Affect Dental Fees?
Based upon information obtained by the insurance company, let’s say they determine 90% of the dental offices in your area charge $1,000 or less for a crown; then the UCR fee for dental crowns most probably will be set at $1,000. If you charge your patient $800 for a dental crown, the insurance company will pay 50%. And then your client will pay 50% of your bill out-of-pocket. On the other hand, if your dental practice charges $1,200 for the crown, the insurance company will only pay 50% of their $1,000 UCR fee to your practice. Which leaves the patient responsible for the remaining $700 out-of-pocket. There does seem to be a wide fluctuation in charges without any regulation as to how an insurance company decides their calculation.
In the case of a more popular insurance company in your area, it would seem their UCR fee schedule could affect the area prices for dental services. But your practice does not want to be known for charging more than the other dental practices in the nearby vicinity. So the use of UCR fees does help keep the prices charged by all dentists in your area in line. Also, if you decide your fees are short of the UCR fee set by other dentists in your area of operation, this allows you to raise them. Or in the alternative, if your dental practice offers a unique experience, you may decide it justifies your higher fees.
In the end, the total benefits under a policy are usually limited by a deductible and a yearly maximum of payment, so your patients will ultimately have to determine the price they are willing to pay for their services.
PPO Negotiation Solutions can help you determine proper UCR fees and keep them balanced well, as well as increase your dental practice revenue. Do you know most dentists write off nearly 40% in PPO reimbursements per year? It also takes over 30 hours in some instances to complete the credentialing process alone to be accepted into a PPO! Also, 7 out of 10 dental offices do not set their UCR fees correctly from the beginning. We offer 30 years of experience. And as a result, there are hundreds of dental practices just like yours that trust our team as their solution. Contact us for your complimentary assessment and schedule a consultation today!