Hidden Taxes on Your Dental Practice


If you think you are only taxed by the government, you’re mistaken!


Dentists are subjected to an increasing “hidden tax” by dental insurance carriers! They have lowered our fees, increasing our overhead, and they continue to add unnecessary complexity to the processing of the claims for our patients!


It is important to estimate a patient’s costs before starting treatment.  This is part of informed consent. Unfortunately, dental staffs are often not very good at maintaining the multiple fee schedules necessary for the multiple insurance plans. This is an important function but places an administrative tax on the dental practice.


We got a “tax increase” because it is now more difficult to determine which fee schedule goes with which carrier. “Insurance aggregators” such as Connection Dental or Maverest have their own fee schedules in addition to the individual fee schedules for the carriers with which they contract. For example, you may be a provider for Metlife but this carrier is also covered under a contract with Connection Dental. Which fee schedule do you use? (Not surprisingly, it’s usually the lower of the two fee schedules!) But your contract with Connection Dental may specifically exclude MetLife in your individual case.  So your contracted fees with Metlife may apply. This confusion is a tax on all of us! It consumes hours of nonproductive administrative time without any benefits to either the dental office or the patient!


Recently the situation has become even worse. Delta of Washington now has six new plans that require patients to pay a larger portion of the fee. For example, your Delta fee for a crown may be $900 and the usual Delta contract says they will pay 50%, or $450. However, under these new plans Delta says they will only pay $350 leaving the balance of $550 as a responsibility of the patient. You are still allowed to be reimbursed for your full fee of $900 but staff needs to estimate the patient’s portion differently.


But wait!  There’s more!   If Delta used only one common fee schedule for all six new plans, that would be one thing. But they don’t. Each of these plans has a different fee schedule!  To accurately estimate a patient’s copayment, we now need to maintain two separate fee schedules for each of these plans! This is a nightmare! And just to put more bitter frosting on this inedible cake, so far we have been unable to get these new patient copayment fee schedules in an electronic form that can be imported into the dental software. This means that each of these fees for each of these fee schedules needs to be individually entered by staff.


Do I sound upset? I am!


So what can we do to reduce these taxes on our practices?


We can just say the hell with it and pre-estimate all treatment plans. Unfortunately, this doesn’t guarantee payment, it delays treatment, and it typically reduces the likelihood that the patient will actually follow through with treatment by about 40%! Unless we are already way too busy, pre-estimating treatment is generally not a very good strategy.


We can complain to Delta (and to your Congressperson!), but I expect the results to be about the same: “Thank you for your input!”  At the very least, Delta should provide dentists with these fee schedules in a machine-readable format that can be imported by our software. A PDF file simply will not do!


Another thing we need to do is to make sure that our practice management software keeps up with these increasing complexities in billing.  Different softwares deal with these accounting issues in very different ways. Some do it in the obsolete ways we used 20 years ago!  This is not acceptable. We need to be vocal in explaining these changes to the software vendors and demanding that their software allow us to correctly calculate patient copayments. (Or simply switch to more modern software, such as Open Dental, that does these calculations correctly.)


One additional thing we need to do is to make sure that our staffs keep up with these rapid changes in the insurance industry.  As with the software updates, our staff needs to have “updates” and training to minimize the effects of these administrative “taxes” on our practices.


The bottom line is that neither our software nor our staffs can continue to do things the way they did on 20 years ago!



Bruce Stephenson has been a practicing general dentist in San Leandro, CA for 38 years. He now limits his part-time “retirement practice” to Invisalign. He is also a partner in Today’s Dental Consulting doing practice enhancement consulting, training and coaching. You can reach him at BruceStephensonDDS@gmail.com or 209-603-9944


He has also just posted a video, “Modern Dental Practice Management in 9 Minutes,” on his website homepage: Today’s Dental Consulting