Unit 3: Finances
Unit 5. Finances

Section 1. Financial Viability

Determining Appropriate Clinic Fees

It is important that a clinic’s fee schedule reflect the full value of the services it provides. Full fees should be set at prevailing rates. If a portion of your patient population has commercial insurance or has the ability to pay for the services provided, it can be financially devastating to develop a fee schedule that is too low. There are multiple third-party fee schedules, some of which are geographically sensitive, available for some guidance on appropriate fees.

Discounts for people who cannot afford full fees are accomplished through discounting the fees based on a sliding-fee schedule or nominal-charge methodology. This ensures an accurate record of the full value of the services provided to this patient population. The fee adjustments indicate a documented value of the services being provided to your safety net dental clinic’s population. This information is invaluable when preparing year-end reports and grant applications and for justifying your clinic’s existence.

When developing a dental clinic fee schedule or evaluating your clinic's fees, there are two separate but related questions to ask in order to determine if your clinic’s fees adequately reflect the value of the services being provided:

  1. Do the clinic’s fees reflect the difference in the value of one procedure in relation to the value of another procedure?
  2. Are the clinic’s fees comparable to the fees charged by other oral health professionals in the clinic’s service area?

Do not set your full fees at Medicaid rates, since Medicaid rates tend to be significantly lower than prevailing fees. The full fees set at an FQHC dental clinic should be comparable to the fees found in the private sector within a similar geographic area. Patients who can afford full fees should be charged fees comparable to rates found in the private sector. Third-party fee schedules, some of which are geographically sensitive, can help in establishing the full fee for individual services.

There are several sources of published patient-fee data that you can purchase. For example, the National Dental Advisory Service Comprehensive Fee Report has data to the zip code level. The American Dental Association (ADA) publishes fee surveys that are available to members.

Relative Value Units

Relative value units (RVUs) help determine if your fees reflect the relative value of one procedure as compared with that of another procedure and provide a mechanism for establishing a baseline set of fees. This baseline should be used as a starting point for developing an appropriate fee schedule for your safety net dental clinic.

A set of RVUs for the procedures your clinic provides may be obtained from a company or organization that studies and analyzes dental procedure RVUs, such as RVS, Inc., or may be developed internally, based on the value the clinic’s health professionals and administration place on the specific set of procedures performed in the clinic.

Developing a Relative Value Units Conversion Factor

In general, if you wish to develop your own set of RVUs, you should consider the following questions.

  • How much time does a procedure generally take to perform?
  • What level of training and skill is required to perform the procedure?
  • What are the costs of non-separately billed supplies and disposables typically used to perform the procedure?
  • What is the potential for complications?
  • How severe is the problem related to the procedure? (From routine prophylactic care to emergency treatment).

Then, use the Fee Schedule Assessment and Development Tool to calculate the RVU conversion factor for your clinic’s fees.

To determine the RVU conversion factor for the set of procedures performed in your clinic, input a target RVU conversion factor where instructed to do so. Adjust this conversion factor until you have developed a set of fees that appropriately reflect the full value of the services your clinic provides or will be providing.

The resulting RVU conversion factor fee schedule should be compared with the prevailing fees being charged by other oral health practices in your clinic’s service area. This may be accomplished by using dental fee surveys, such as those published by ADA or the National Dental Advisory Service. Important: If you use a published survey, be certain to apply the multiplier for your region and to use the survey results for the 75th or 80th percentile. This will ensure that your fees reflect the value of the services provided.

Finally, your fees should reflect other market influences such as demand for specific services. Generally, a higher demand for a specific service may result in higher fee for that service, and vice-versa.