Introduction

One of the biggest concerns for dental practices today is the growing gap between rising operational costs and stagnant PPO reimbursement rates. As inflation drives up costs for labor, supplies, equipment, and rent, many dentists wonder: Will insurance companies ever adjust reimbursements to keep up with inflation? Unfortunately, history suggests that widespread, automatic adjustments to match inflation are unlikely. Here’s why—and what dentists can do about it.

Why Dental Insurance Companies Are Unlikely to Adjust for Inflation

1. Insurance Companies Prioritize Profitability

• Dental insurers, like all businesses, are focused on maximizing profits while keeping costs predictable.

• Increasing reimbursement rates across the board would reduce their profit margins, which insurers try to avoid.

2. Fixed Contracts and Long-Term Fee Schedules

• Most PPO contracts lock dentists into multi-year fee schedules, making it difficult to adjust reimbursements frequently.

• Even when contract renegotiations occur, increases are minimal and do not match inflation rates.

3. Network Leverage Against Dentists

• PPOs maintain large networks of providers, and they assume most dentists will accept lower reimbursements rather than leave the network.

• Because so many dentists participate in PPO plans, there is little pressure on insurers to raise fees.

4. Lack of Government Regulation on Dental Insurance Fees

• Unlike medical insurance, where some reimbursements are influenced by Medicare or Medicaid regulations, dental insurance is largely unregulated when it comes to adjusting fees for inflation.

• This allows insurers to maintain low reimbursement rates without legal requirements to adjust them over time.

5. Employer-Controlled Premiums

• Many dental insurance plans are funded by employers who negotiate rates with insurers.

• Employers seek cost-effective benefits and may push back against premium increases that would allow for higher provider reimbursements.

The Impact of Inflation on Dental Practices

With insurance reimbursements remaining stagnant while expenses rise, dental practices face increasing financial pressure. Inflation affects:

• Staff wages – Salaries for dental assistants, hygienists, and front office staff are rising due to workforce shortages.

• Dental supplies and lab costs – Materials have become more expensive, impacting profitability.

• Overhead expenses – Rent, utilities, and general operating costs continue to climb.

• Technology and equipment investments – Practices need to invest in modern technology to remain competitive, but rising costs make it difficult.

What Can Dentists Do About It?

While waiting for insurance companies to voluntarily adjust reimbursements is unlikely to be fruitful, dentists can take proactive steps:

1. Negotiate PPO Fees Regularly

• Request fee schedule adjustments every 1-2 years based on cost increases and regional benchmarks.

• Focus on high-volume, high-revenue procedures to maximize reimbursement improvements.

2. Drop Low-Paying PPOs

• Analyze which insurance plans contribute the least to your bottom line and consider going out-of-network with unprofitable plans.

• Encourage patients to use out-of-network benefits or explore membership plans instead.

3. Implement a Fee-for-Service Model or Membership Plans

• Develop an in-house membership plan to provide affordable care for uninsured patients while maintaining better control over pricing.

• Shift towards a fee-for-service model where possible, reducing reliance on PPO reimbursements.

4. Increase Efficiency and Production

• Focus on high-value procedures like implants, cosmetic dentistry, and clear aligners that provide higher profit margins.

• Use technology (CBCT, intraoral scanners) to enhance treatment planning and increase case acceptance.

5. Educate Patients on PPO Limitations

• Help patients understand that insurance is a benefit, not a comprehensive solution, and encourage them to make treatment decisions based on need, not just coverage.

Conclusion

The reality is that insurance companies are unlikely to adjust reimbursements in line with inflation unless significant market pressures force them to. Instead of waiting for insurers to make changes, dentists must take proactive steps to renegotiate fees, optimize production, and explore alternative revenue streams. By strategically managing PPO participation and financial planning, dental practices can remain profitable despite rising costs.

Benjamin Tuinei

Founder - Veritas Dental Resources, LLC
Phone: 888-808-4513

Services:
PPO Fee Negotiators | PPO Fee Negotiating | Insurance Fee Negotiating
Insurance Credentialing | Insurance Verifications

Websites:
www.VeritasDentalResources.com | www.VerusDental.com