It’s January, and we are well into the start of a new year which is a busy and pivotal time for dental practices, setting the tone for the months ahead and offering the opportunity to recalibrate and realign.
One of the primary tasks is reviewing the previous year’s performance and setting clear goals for the future. These goals often include financial targets, such as increasing revenue or improving collections, and patient care priorities like enhancing case acceptance or boosting recall engagement. It also requires allocating funds for new equipment, technology upgrades, or office renovations. Equally important is team development, emphasizing communication, training, leadership growth, compensation, and other incentives tied to performance.
This process provides an opportunity to revisit the preliminary budget created in the fourth quarter and refine it based on finalized year-end data, updated economic conditions, and any changes in the practice’s priorities.
Additionally, it allows practices to address any unforeseen challenges from the previous year to allocate additional resources toward areas of growth or improvement in the new year. By recalibrating the budget in January, practices can ensure they have a solid and realistic financial plan to guide their operations for the year.
One crucial component is being able to successfully navigate the new year’s budget is rebalancing your fee schedule. Chances are you probably haven’t raised your fees yet. You are not alone. Many dental practices hesitate to adjust their fees, often out of concern for patient retention or fear of appearing too expensive.
In 2025, dental practices are encouraged to implement a fee increase of approximately 4% to address rising operational costs and inflation, a step aligned with industry recommendations to maintain financial stability. The American Dental Association’s Health Policy Institute has highlighted staffing shortages, insurance challenges, and increasing overhead costs as the top concerns for dentists this year. Supporting this trend, a poll by the Health Policy Institute revealed that nearly 75% of dentists planned to raise their fees in response to ongoing economic pressures. 1
Implementing a 4% fee increase can help address these challenges by ensuring that revenue keeps up with expenses, allowing practices to invest in staff retention and manage overhead costs effectively. 2
Unfortunately, it’s common for me to see that practices only increase their fees by just a few dollars across the board each year and then wonder why they aren’t seeing the profitability they expect. They often overlook the significant impact of not adjusting fees to keep up with the rising costs of doing business.
Another key issue is that many practices simply don’t know how to determine the right fee increase to effectively realign their practice and ensure long-term financial sustainability. Without a structured approach to fee adjustments, they risk falling behind financially while struggling to cover operational costs.
You might be wondering; how does a dental practice go about raising their fees? My recommendation is to start with a solid fee analysis to guide your decisions. For 2025, there are great resources available, like the National Dental Advisory Service 2025 Fee Report Book or the Dental Customized Fee Analyzer. 3-4 These tools let you create customized reports based on your specific zip code, giving you detailed data on the typical dental fees for a variety of procedures in your area. I also suggest reaching out to dental vendors like Patterson Dental, as they often provide fee analysis services tailored to your practice’s region. These insights are invaluable in helping you ensure your fees stay competitive and aligned with local market standards, allowing your practice to maintain profitability while delivering exceptional patient care.
I take all three of these factors and more into account when adjusting fees to position the practices within the 85-90% range for their area. Practices that haven’t consistently raised their fees may find it challenging to implement a significant increase all at once, so they may need to make moderate adjustments over time to gradually rebalance and achieve sustainability.
As an in-network dentist, it is crucial to regularly review the usual and customary fees (UCR) set by the dental insurance carriers with whom you have contracts. In-network dentists are often bound by contractual obligations that leave them feeling held hostage by insurance companies, as these contracts typically prohibit raising fees for covered services beyond the agreed-upon reimbursement rates. This limitation can make it challenging to address rising operational costs or adjust for inflation. However, dentists can negotiate higher reimbursement rates if justified by factors such as increased overhead costs, expanded services, or enhanced qualifications. Staying informed about UCR rates provides a valuable benchmark for making competitive and strategic fee adjustments, helping to balance profitability with patient retention. To navigate these restrictive contracts effectively, dentists must fully understand their terms and consult legal or financial experts or with dental consultants that specialize in contract negotiations when seeking renegotiations or considering changes to their fee schedules.
Annual fee increases are not merely a strategy for profitability; they are a necessity for sustainability. Without these adjustments, practices may find themselves forced to cut corners, which can ultimately compromise the patient’s experience and the quality of care. Over time, the gap between your income and expenses can widen to the point where it becomes impossible to maintain a thriving practice. This not only affects the business but also the livelihood of your team and the trust of your patients.
January is the ideal time to implement these fee increases. Starting the new year with updated fees aligns with the natural cycle of planning and budgeting that many patients and businesses adopt at the beginning of the year. Patients are often more accepting of changes during this time, as they associate January with fresh starts and new goals. Additionally, implementing fee adjustments in January allows your practice to benefit from the increased revenue throughout the entire year, giving you more flexibility to manage rising costs and reinvest in your operations. By preparing your team and communicating changes ahead of time, you can ensure a smooth transition and maintain patient trust.
Patients often appreciate transparency and value. Communicating the reasons for fee increases can help them understand that these adjustments reflect your commitment to maintaining excellence in care. Framing the conversation around how their investment contributes to their long-term oral health can build trust and reinforce the value they receive from your services. Most patients recognize that the cost of living rises annually, and they will understand that your fees reflect these broader economic realities.
Running a successful dental practice requires balancing exceptional patient care with maintaining a financially sustainable business. For me, raising fees isn’t about profit; it’s about ensuring the longevity of the practice and our ability to continue delivering the highest quality care. Patients expect us to stay current with advancements in technology, techniques, and comfort-focused amenities, and meeting those expectations requires consistent financial reinvestment. This extends to our team as well—providing outstanding care is only possible with a highly trained, motivated staff, which means ongoing investment in their skills, training, and compensation.
Every dollar we reinvest into the practice strengthens our capacity to provide superior care, enhances the patient’s experience, and builds long-term loyalty.
Does raising fees consistently actually work? Without hesitation—yes! Speaking from both experience and passion, I’ve seen firsthand how impactful this strategy can be. Alongside my consulting work, I continue to manage a dental practice. When I first joined my current practice over twenty years ago, they were only raising fees by a few dollars, and even then, it wasn’t done consistently or across the board. The result? A practice struggling to align its revenue with rising operating costs. They brought me in to help realign their financial strategy, and while it took a few years to fully rebalance, the transformation was remarkable.
Today, we consistently raise fees by 5-7% across the board starting January 2n, ensuring the practice remains not only profitable but thriving. This approach allows us to confidently invest in the latest technology, equipment, and team development, creating an environment where both our team and patients flourish. It also gave us the resilience to navigate unforeseen challenges like the pandemic and economic uncertainties with strength and stability. The same success story applies to my clients. By embracing consistent, strategic fee adjustments, they too achieve financial health, innovation, and the ability to confidently grow into the future.
Cited Information
https://wasserman-medical.com/shop/product/national-dental-advisory-service-2024-fee-report-book-25/
