Becoming A Fee-for-Service Dental Practice

Dentistry Today


Many dental practices can eliminate patient billing and become a fee-for-service business. It requires proper planning and a strategic game plan.

Our dental practice was established in 1978. We are a 3-doctor dental practice in a middle- to upper-middle-class area in a suburb of Philadelphia. In the mid 1990s we found our cash receivables increasing and our collections sluggish. More and more patient bills were going out each month, and the time and cost of billing patients became a significant component of our overhead. We formulated a strategy to eliminate most of our patient billing, if not all of it, at a specific future date.

Table 1. Important Notice From Doctors.


Dear Patient:

In an effort to control our costs while maintaining the standard of excellence we have provided over the years, we will be making some changes in our insurance financial policy. We will require patients that have dental insurance to pay for ser-vices as they are rendered. As of September 15 we will be requesting payment at the time of services. This payment can be cash, check, or major credit card. We will still submit your dental claims for you. Payment from your dental carrier should go directly to you. If this is a hardship, we can have your insurance carrier pay us directly. We will then charge your credit card the difference, once your insurance pays its portion. We have the credit card authorization forms ready for you in our office. For your convenience, for treatment exceeding $500, we also offer a 0% finance option. Details are available in our office. Arrangements made for dental work in progress will be honored.

With extensive dental work that requires preauthorization, our office will only require the patient’s portion to be paid when the services are rendered.

This policy change has been brought about by many insurance companies not reimbursing our office on a timely basis. We try to maintain the highest in quality care and service for all our patients. In today’s economic market it is difficult to purchase the newest and best in dental equipment and supplies and not have a consistent cash flow from insurance carriers. We have a commitment to all our patients to provide quality care and service in a safe and modern dental facility.

Please feel free to give our office a call with any questions or concerns you might have. We look forward to continuing to provide you and your family with quality care and service.

Howard Hopenwasser, DMD
Jonathan Glatt, DMD
David Faust, DMD

All of our patients were notified several months prior to this “elimination of billing” date (Table 1); this letter outlined our need to control our costs. We informed our patients that they would be required to pay for services as they were rendered. We also informed them of the date of this policy change. We advised our patients that we are a quality-oriented practice and did not want to compromise our standard of excellence. We presented our new policy to our entire patient base, held our breath, and hoped we wouldn’t lose many patients.

Our new policy was really very simple. All patients were expected to pay for dental services as they were performed. In cases of extended treatment, payments could be made as the case progressed, and total payment was due when treatment was completed. No billing. We also offered a 5% bookkeeping courtesy to all our patients if they prepaid all extended treatment plans; this prepayment was required at their initial visit. We accepted all major credit cards, but the 5% bookkeeping courtesy was not an option for those patients paying with a credit card. We also offered our patients several different outside financing agencies that cater to dental offices, such as Wells Fargo Financing or CareCredit. With these financing agencies, patients who needed extensive dental work could apply for a “loan” from one of these financing companies. A percentage (ie, 5%) would be deducted by the financing agency and would be deducted from the agency’s direct payment to our office. We would immediately receive payment (ie, 95%) from this agency. The patients would fill out a simple loan application that our office provided, and if they qualified, they secured a 6- to 12-month no-interest loan (we paid the 5% up front as the loan interest fee).

Table 2. Billing Agreement From Patient.

After my dental insurance company has paid its portion of the dental services rendered to me at the offices of Drs. Hopenwasser, Faust, and Glatt, I,_________________________ , hereby give my consent to that office to charge any outstanding balance to my credit card. This balance may include deductibles and denials as well as noncovered services.

Signature_____________________________ Date________________

Credit Card #__________________________________________________________

Expiration Date________________________________________________________

Circle One:     Visa       MasterCard      American Express      Discover        

Patients with dental insurance were basically treated in the same manner as the patients without dental insurance. If we had a preauthorization from an insurance carrier, we would only expect the patients to pay their portion; we would submit their preauthorization with as-signment going to our office. What about patients with dental insurance who required routine dental treatment such as an exam, prophy, or filling? This was a key to making this new billing policy work: we asked our insurance patients to sign a statement (Table 2) allowing us to bill their selected credit card any balance that remained after we billed the insurance company. Patients with dental insurance would come in for treatment, we would submit their insurance forms electronically, and then charge their credit card for any remaining balance after their insurance payment was received. No bills to patients.

Was there resistance to our original letter outlining our new no-billing policy? Yes. Did we lose many patients? Not many—only a very small number.

When our initial notice was sent we received some calls from patients asking how we could do this. They stated that they had been coming to our office for years and have always paid us! Didn’t we trust them? We received some calls and some letters from patients informing us that they would be switching to another office, one that accepted their insurance and would bill them after the insurance payment was received. I received personal calls from patients asking me to make special exceptions, since I had known them so long. In response to these calls we em-ployed another part of our strategy: all calls and letters were addressed immediately. I personally answered many inquiries, assuring these pa-tients that I valued their dental business and trust and would not want to lose them or their families as patients. Our basic “special consideration” was to tell them we would have them sign our credit card authorization form, and by doing this their credit card would be billed instead of them directly. After getting this “personal” call and “personal” consideration, most patients were more understanding.

In the 2 months following the initiation of our new no-billing policy, our accounts receivable dropped by approximately 50%. These 2 months were also by far the largest revenue months in our office history!

This no-billing policy has now been in effect for more than 7 years. Do we lose or turn off some patients? Yes. Do we still get new patients? Yes, averaging more than 30 new patients per month. We have also worked hard to establish our office as a high-quality, caring facility. Our office over the last 7 years has continued to grow and expand, and our accounts receivable remain at a low level (50% to 70% of one month’s production).

In today’s economic market, a strategic and empathetic fee-for-service policy can enable a dental practice to grow and thrive.

Dr. Hopenwasser has been a practicing dentist for more than 30 years and has lectured extensively on dental management. His practice management articles have been published in Dental Economics, Dental Management, Dentistry Today, and the Journal of the American Dental Association, and he has also written a chapter in the book, Success Guide for New Dentists, published in 1990 by Anadem Publishing in Columbus, Ohio. He can be reached at (215) 493-4021 or