Fee Optimizer is a powerful tool that allows you to view all your fees for procedures that have been performed, as well as production values for any date range.
In Optimizer Classic, you can sort the list view in Fee Optimizer by clicking on any column header, such as Procedure Count or Current Production to arrange the entire report by that value. Fee Optimizer allows you to see the items that are most frequently invoiced or which generate the most production.
By default, Fee Optimizer uses one year’s (last 12 months) production data and analyzes several data sources to calculate recommendations.
***Note: The top 3 boxes indicate your adjusted production (which looks at your total gross production charges, less any adjustments made against those charges in your Practice Management Software). The Current Production in the list view (below) is referencing your gross charges for the number of procedures performed - and does not consider adjustments made against those charges in your Practice Management Software.
What is the New Fee?
The New Fee is a recommendation. Fee Optimizer does not position the New Fee as a requirement for any practice to implement. As always, the final word on updating the fees rests with the owner/doctor because he/she is the final decision maker. When a patient walks in the door, the owner/doctor is responsible for explaining his fee to the patient.
Where does the New Fee come from?
Your practice's “style” determines the New Fees. This means that you could have higher fees than other practices in your area, but still be the top performer for a specific procedure. Fee Optimizer aligns two main factors: the frequency of procedures and their profitability. This brings the two factors as close as possible to display the New Fee. Remember that a particular code may be the most frequent procedure, but it cannot be the most profitable. This is because it may affect a practice's supply-demand balance (for example, prophys). That is why it is essential to bring frequency and profitability together to create an "optimized" New Fee.
Note: These two factors will never be in perfect alignment, but Sikka brings you the best and most optimized New Fee based on those two factors. The result is a New Fee that does not follow a guideline of percentile rankings alone, but rather optimizes fees to maximize a practice's profitability. Other secondary factors affecting the two are procedure mix, duration of appointments, number of providers, provider types, lab fees, number of operatories, and more…
Sikka provides the best, most relevant, comprehensive, and accurate fee data guidelines that will always reflect the macro and micro economic conditions in and around your practice.
What if I mostly take insurance patients?
Sikka’s fee data is based on Provider (UCR/Office Fees) charges, NOT Payor (Insurance Fees) payments. If you take mostly insurance, you can still use Sikka’s fees. By submitting your UCRs to your Insurance Payors, you can influence the updating of what they pay in some cases. If 25% of your patients will be cash patients (after insurance runs out, and through co-pays) your practice can still increase profitability by as much as 20% in the next 12 months using our New Fee guideline.
Our PPO Comparison Report is a great tool to use in tandem with Fee Optimizer.
Where does the percentile fee data come from?
Sikka has one of the largest samples of fee data in the U.S. We have collected fee information through 7 major sources:
- Surveys (such as the national and state dental organizations)
- ADCPA and local state and county-level fee surveys
- Dental Economics - Sikka fee survey
- American Dental Sales Fee Survey
- Our own list of 52,000 dentists that we periodically get fee surveys from
- Cost of Living (COLA) and US Department of Census databases such as Data.gov
- Our own list of over 13,000 opt-in installations that are refreshing data every morning
Based on this, Fee Optimizer has over 55,000 dentists and thousands of zip code level information sources. Over 42,000 zip codes source our fee database. In the US there are about 49,000 zip codes. This all means that Sikka has one of the most comprehensive fee databases in the industry.
How is Sikka’s fee data different from other fee schedules?
Most other fee surveys only source 2,000-5,000 dentists and use 3-digit zip codes, which are less relevant to your practice. They also include geo multipliers in their calculations.
For example, if you are in San Diego, your fees may be averaged out with every other practice in your region, and then multiplied by the geo multiplier of 1.2 for the recommended fee, but if you are in Kansas City that geo multiplier is only 1. The geo multiplier determines your new fee by averaging out your geographic data
Fee Optimizer includes 55,000 dentists, and we use the full 5-digit zip code in our logic. If our survey does not find enough dentists in the 5-digit zip code, it follows a funnel-shaped analysis and goes to a zip (3 digit) and then to the county level if necessary.
How do I avoid losing patients by updating my fees?
Most dentists think that they are the best-paid dentists in their area. However, 99.99% of dentists are not the best paid. There are always dentists who are charging more than you are. If you are afraid you are already are at the highest percentile, rest assured it is just an artificial ceiling. Simply put, if you are the best-performing dentist in your area, then you should be the best-paid dentist in that area.
of In addition, rules of price tolerance are such that if your patient can bear the update in fees, then you should charge those fees. Sikka’s customers have never seen patient attrition more than 2% after a fee update. Of the patients who do leave, statistically they are those who will call around to find out who charges $20 less for crowns… frankly, those are not the loyal patients that you need in your practice.
A Gary Takacs study that showed that if your overheads are 65%, and your fees are updated by 10%, your practice would have to lose about 30% of its patients to realize the loss of profitability.
Please review the supplemental articles we have included here for further strategies and best practices regarding evaluating and setting your fees (attached below).
How often should a practice evaluate/update their fees?
To stay abreast of costs and maintain practice profitability, a practice should review their fees at least twice per year. In the current ever-changing economic environment, it is a good practice to review and analyze fees on a quarterly basis. This helps practices remain competitive and profitable at the same time.
A practice that has been in business for many years should not want to set their fees too low and risk undermining the value of their work. Practices that use high-end labs, state-of-the art diagnostics, and other technology etc., need to ensure that they are profitable. A practice that is just starting does not want to set their fees too high, which may result in driving patients away.
For more information on Fee Optimizer, watch this video from Sikka CEO Vijay Sikka: