How to Set Up Your UCR?

​UCR stands for Usual, Customary, and Reasonable. It is essentially what you would like to charge for someone who is paying all expenses out of pocket or not in network with their insurance plan. You must set your UCR as one of your early tasks before opening your startup. Numbers can be all over the place, and there is no exact formula to determine that. I hope these tips can help you set the UCRs to what is best for your practice:
 
1. Demographics and Local Competition: Take a good look at what differentiates you compared to solo or corporate competition. If you are already working in an office, use that as a starting point and set yours higher or lower depending on your answer to the differentiation question. You need to position yourself well in the market, not too high or too low.
 
2. Use ADA Annual Survey as a Guideline: Take it with a grain of salt as most participants are not orthodontists.
 
3. Use Gaidge Summary of Dental Practices: Gaidge has more data compared to ADA from actual orthodontic offices, so their information is likely to be more reliable. However, most startup orthodontic practices do not use Gaidge, so their data is skewed towards established mid to high-performing practices.
 
4. Get in Touch with Insurance Companies: Obtain their fee schedule. Aim to be at least 30-40% higher than the best-paying insurance. Insurance fee schedules are set based on the demographics and number of the local providers.
 
5. Talk to Friends or Colleagues: Keep in mind that their demographics may be different than yours.

6. Tiered UCR Pricing: You may choose to have multiple levels of pricing for the same code. This way, you can be compensated fairly for the complexity of the clinical case or patient management.
 
A common question we get is whether UCR even matters if your practice is in-network with insurance plans. The answer is a strong yes! Your UCR will be a strong tool for negotiating your fees with insurance plans at the startup process and also down the road. My last piece of advice is to be diligent in adjusting your UCR yearly in parallel with the inflation in service industries.