Fee for Service Is Not a Bad Thing

This article originally appeared in the April/2023 issue of the Academy of General Dentistry’s AGD Impact magazine.

Being in-network with various dental insurance providers consumes the major portion of a dental practice’s marketing budget. If your practice relies heavily on insurance networks to attract new patients, you are essentially paying for marketing by accepting lower fees for services. Many dentists see this as a fair trade-off. Others, however, wish there was a better way, and that is when they begin to consider transitioning away from dental insurance to a fee-for-service model.

Restrictions of Dental Insurance

Dentists across the country are changing their fee models from majority dental insurance cases to primarily fee for service. These practices have stopped relying on insurance providers for most of their new patients. According to Lee Brown, DDS, a dentist from Westchester, Ohio, who helps dental practices reduce their reliance on dental insurance and part of our Clinical Advisory Board, “When you remove dental insurance limitations and get paid your full — and appropriate — fees, you are no longer being undercut by dental insurance reimbursements.”

One of the biggest benefits of fee for service is no longer being forced to accept the rates insurance companies dictate to dental practices, which, by the way, have been steadily trending downward over the last few years.1 Not only that, but patients pay upfront, which means no more waiting on the insurance company to approve a claim and send a reimbursement. The entire process is smoother and cleaner for everyone involved.

What Does ‘Fee-for-Service’ Mean?

Transitioning to a fee-for-service model should not be confused with not accepting dental insurance. To the contrary, the practice is still able to file claims with patients’ dental insurance providers. However, instead of the practice being reimbursed for the part that is covered, the patient is. The practice collects the entire fee for the treatment upfront (in most cases) and files the electronic claim with the patient’s dental insurance company, and insurance pays the patient directly for the portion of the claim that was covered. When a dental practice is no longer in-network with insurance providers, the practice, not the insurance companies, dictates the fees for the services they provide. The dentist is free to use whatever materials and techniques he/she believes are best for their patient and is thus able to provide high-quality care that will make the patient happier and healthier in the long term.

Attracting New Patients When Your Practice Is Not In-Network

A big sticking point for dentists who might be thinking about transitioning their practices to fee for service is the fear of losing a pipeline of new patients, but that fear is unfounded. Not only will the practice be able to continue to attract new patients, but, with the right focus and attention, it will be able to attract high-quality patients.

As Brown explains it:

“You give [dental insurance companies] tens of thousands of dollars every year, and it’s completely random the type of patients you get. It isn’t an intentional approach to new patients, just luck of the draw. The write-offs you accept from insurance are basically really expensive and below average marketing. Wouldn’t it make more sense to actively recruit the patients who want and appreciate the value you provide?”

As a marketing strategy for attracting new patients, relying on dental insurance networks is one of the most inconsistent and costly. Once a practice moves away from insurance, it is free to invest more in targeted strategies that focus on the types of services and patients the dentist wants. For example, if a dentist is passionate about full-mouth rehabilitation, with the help of a marketing partner, he/she can develop campaigns around dental implants, crowns, veneers and orthodontics to show potential patients that, first of all, the practice offers all of those services, and secondly, that the dentist is known for his/her expertise in those types of treatments. With a little time and effort, new patients will be contacting the practice for precisely those services and will be willing to pay upfront.

Once a practice transitions away from dental insurance as the primary driver of new patients, its marketing partner can really take the lead, and the possibilities are endless. Getting paid upfront and not having to wait for reimbursements frees up revenue to be directed to the places where it will do the most good for the practice, including marketing to attract the right types of patients. As a result, the practice may get fewer new patients, but those patients will be of higher quality, and so will the relationships the dentist is able to build. Without dental insurance constraints, the practice can also focus more of its marketing on existing patients, creating a higher degree of loyalty within the current patient base, which will generate repeat business as well as referrals.

For dentists who are thinking about making the transition to a fee-for-service model, precise marketing strategies will be the key to short and long-term success. With the right marketing partner, it can be a smooth transition, and the end result should be high-quality patients, better relationships, more freedom to practice dentistry the way you want to and stronger revenue with less work.