FFS Benefits: Why Dentists Might Consider a Fee for Service Model

My endodontic practice didn’t always follow a fee-for-service (FFS) model. But it has made a world of difference ever since we changed strategies! I was recently interviewed by Dr. Sonny Spera on the Fee For Service Podcast, and we talked all about FFS benefits, drawbacks, and considerations.

If you’re thinking about an FFS model, this episode is for you! Watch it in its entirety below:

One fun note: Dr. Spera and I are from the same town in New York, and he knows the endodontist who changed my life as a young woman! What a small world.

What Is the FFS Model?

There are a lot of ways to run your dental practice. Maybe you have contracts with insurance providers or have a discount membership dental plan.

I resisted a fee-for-service model for a while, because I was afraid we’d run into issues with being out-of-network for our patients. And that has been a hurdle to overcome.

But before we get into FFS benefits and drawbacks, let me describe what this model actually is. (If you already know, just scroll down a little bit!)

In an FFS model, your patient pays you (the provider) for treatment, which empowers them to truly understand their own individual policy. Then, their insurance will reimburse them, directly. I believe that the FFS model is how it should be, because it allows us dentists to focus on patient care, and not be limited by what an insurance provider will cover, as opposed to fretting about patient billing. Ultimately, it’s about the flow of money energy—where is it coming from, and where is it going?

Why I Decided to Shift My Business Model

When I started practicing, I was told that I had to be in-network, so that’s what I did. I was in-network with about several plans for years in my practice.

I did that for a while and realized that I was on the same fee schedule for ten years without a fee increase. Of course, that doesn’t reflect the changes in inflation or the cost of doing business. Like hello, girl’s gotta get paid!

I focused on increasing my production so the practice could be more profitable, and I brought in two other doctors to the practice. But there are only so many efficiencies we could make, and I wasn’t willing to lose my free time to work.

Like you, I’m a busy person, and being an endodontist is only part of my identity. I’m also a mom of three, the founder of the E-School endo CE course, a public speaker, and a mentor to dentists. So the answer definitely wasn’t to work myself to the bone.

I knew I needed to make a shift in the way I was working so I could do everything I wanted to do without burning myself out—and without reducing my income!

On top of that, I had a one-month wait to get into my practice, which told me there was a huge demand for my services. (I personally like to be booked out about a week; that’s a sweet spot for an endodontist.)

How I Chose an FFS Model

In 2016, I experienced a major career burnout. I was SO done. I didn’t want to own my practice anymore, and I honestly hated my life. I wrote out an org chart of my practice, and my face was in every single bubble. No wonder I was so exhausted!

It was an awakening. I realized I didn’t deserve to live with that level of stress. I began to work on my self-discovery and personal development. I learned to be a better boss, empower my team, and delegate with intention.

I started not only looking inward and recognizing my real value, but also absorbing a lot of external wisdom. One day in 2018, I was listening to a podcast with Gary Takacs and Lois Banta, and they were essentially doing math about practice business models and highlighting the benefits of FFS. As I listened, I thought, “Hey, this really makes a lot of sense.”

The idea goes like this: Being in-network is like spending marketing dollars. If you’re a $1M practice, and you’re doing a 30% write-off, that means you’re spending over $300k a year on marketing.

And nobody needs to spend $300k a year on marketing!

I looked at where the money was going in my practice, and when I added it up, I saw that it was $2,500 per day. (You can pay a great marketing firm that much per month!)

I realized that I could actually handle having less volume, and that I would make the same amount of money whether I went home at 4:00pm or 6:00pm. It was time to work easier, and I finally had the courage to take the next step.

The Process of Changing My Business Model

Once I was aware of all the FFS benefits, I took a tiered approach to making the shift. First, I dropped Delta and MetLife in 2018. At the same time, I added an associate, which allowed me to drop from five to four days a week at the practice. 

This was TERRIFYING. Those were my biggest insurance contracts, and here I was spending more money to expand the practice and reducing my own time at the office. But I knew that those insurance companies were the biggest write-off, and they would not negotiate with me at all. It was the best way forward out of my burnout.

When I realized how much more energy I had for my family when I came home at the end of the day, I became even more motivated to keep going. We kept dropping more and more insurance contracts until there were none left.

Covid times taught us a lot. During the early months, particularly, we didn’t know who was furloughed and who did and didn’t have insurance. This uncertainty is what ultimately drove us to finalize our shift. We learned how to talk to patients about going out-of-network and went completely fee for service.

Because of the technology I use, because I’m reimbursed appropriately, and because of the workflows I put in place, my production hasn’t dropped. Now, I produce more working in my practice 5 days a month than I used to working 5 days a week.

Even though we’re fully out-of-network now, and we’ve slowed down a bit, we’re still up $200k this year, and we have room to grow in our schedule!

While I’m continuing to work in my practice every week, switching to a FFS model has allowed me to continue shifting my trajectory toward teaching and mentoring other dentists to make a bigger impact, even outside my community.

The Other FFS Benefits to Consider

I’ve already talked through a lot of the FFS model benefits in my own practice, but there are two more I want to touch on.

Both you and your patients have increased freedom of choice in a FFS model. Because you aren’t tied to the rules of your contracted insurance providers, you can recommend and provide treatment based solely on your professional judgment of what the patient really needs. On the patient’s end, they can choose their provider and treatments based on their needs and preferences.

Another thing that always used to drive me nuts with insurance models is that patients honestly have no idea what they’re going to pay. But with a FFS model, we dentists can provide our patients with super clear and transparent fee schedules so they know exactly what to expect. This helps them make more informed and empowered decisions around their care, and hopefully, they can still get reimbursed by their insurance provider.

So… how do you make the shift?

The first step is gaining knowledge, and you’re doing that just by reading this blog! I am blown away that so many dentists and their front office teams don’t have a clear understanding of how insurance (especially the distinction between in- and out-of-network) impacts them.

Hear me loud and clear, my friends: Out-of-network does not mean out-of-benefits or out-of-service. All it does is change the flow of the energy of the money. The patient does have coverage, they will just need to get directly reimbursed by the insurance provider if you’re out of their network.

If we don’t understand this as dentists, and if we don’t make sure that our team members who are handling financial conversations understand this, we will make it harder for our patients to understand their insurance and get the best care. Keep an eye on your financial beliefs, because you really can treat more patients than you might imagine you can.

If you want to implement an FFS mode, there are any number of ways to get started! But if you like the benefits of FFS and want to give it  a shot, my recommendation is to drop one of your insurance contracts—the one that is least willing to work with you and update their fees. And just see how it goes.

You can always renegotiate to get back on board with them, but when you see how much less you’re paying in write-offs, a fraction of which you can put toward marketing instead, I don’t think you’ll miss the insurance contract much.

If you want my mentorship, guidance, and support when it comes to making business decisions about your practice, sign up for the waitlist to learn more about how to work with me in this capacity. Empower yourself, always!

– Sonia