Ranking your dental plans by what each writes off per hour of chair time

The number that ranks a dental plan

One number ranks them: the dollars a plan writes off, divided by the chair hours its patients consume. A plan with a thin fee schedule that fills short hygiene hours can outrank a plan with a better schedule that eats a full afternoon on a crown. Rank on that ratio and the list stops being a matter of opinion in the office.

The contractual write-off is the gap between what you billed and what the contract lets you collect from the plan and the patient combined. It is money you agreed never to see, and it sits entirely inside the contract you signed.

Chair time is the scarce thing. Two plans can write off the same dollars in a year and cost very different amounts of capacity, and the one costing more is blocking an appointment you would rather give someone else.

So the ranking is a division problem, and both halves come from records you already hold.

Pull the write-offs out of your own remittances

Your remittances already carry the number. Every adjustment on a claim comes back tagged with a group code, and ASC X12 defines four of them: CO for contractual obligations, PR for patient responsibility, PI for payer-initiated reductions, and OA for other adjustments 1Ref 1ASC X12 (Accredited Standards Committee X12) (2026).Claim Adjustment Group Codes.The four claim adjustment group codes (CO, PR, PI, OA) and their use to separate a contractual write-off from patient responsibility and payer-initiated reductions when totalling write-offs by payer.. Only the CO lines are the write-off you are ranking. Sum them by payer across twelve months and stop there.

PR lines are the patient's share and belong in a collections review. PI and OA lines are worth reading for another reason: a payer reducing claims on its own initiative is telling you about administrative hours.

Then count the hours. Most practice-management systems export appointment length by procedure and by plan, and where yours will not, three months of the schedule counted by hand gives an average you can annualize.

The output is one row per plan, six columns wide.

Fill it in before forming an opinion. The plan the front desk complains about is not always the one at the top of the sheet: the desk meets a plan's portal and its bounced preauthorizations, and the CO total sees none of that.

Build the hourly cost the write-off sits against

Your own overhead per chair hour is the figure the write-off sits against, built from the recurring column of your expense list. The Small Business Administration's method for calculating startup costs splits expenses into one-time and ongoing monthly costs, and tells an owner to count at least a year of the monthly ones 2Ref 2U.S. Small Business Administration (2026).Plan your business — Calculate your startup costs.Splitting practice expenses into one-time and ongoing monthly costs, and counting at least a year of the monthly ones, as the overhead input to a per-chair-hour cost figure.. Add up twelve months of rent, staff, lab, supplies, software and debt service, then divide by the chair hours the schedule held.

That figure moves when the practice changes shape. Making the first hire moves it, because a salaried assistant converts variable hours into a fixed monthly line. Buying the stack in order moves it too: software arrives as a recurring cost whether the operatory is full or empty.

Once you have an hourly cost, the ratio becomes readable. A plan writing off more per hour than the practice spends per hour is discounting each hour by more than it costs to run. That alone is not a reason to leave, since the plan's collections may still clear overhead and its volume carries fixed costs. It is the reason to look at that plan first.

Three things that reorder the list

Three variables move a plan up or down once the ratio is computed: how long the money takes to arrive, how much of your production sits in that plan, and how much administrative work each claim costs outside the operatory. None of them replaces the write-off per hour. They break ties, and in a small practice they break them often: cash timing and staff hours are the constraints that bind first.

Payment speed is set by your contract and by your state. California gives one worked example of the clock: a health care service plan licensed under the Knox-Keene Act must reimburse a complete claim as soon as practicable and no later than 30 calendar days after receipt 3Ref 3California State Legislature (2024).Health and Safety Code § 1371.One state's worked example of a payment clock: a Knox-Keene licensed health care service plan must reimburse a complete claim no later than 30 calendar days after receipt.. Whether that statute reaches your own contract depends on how the carrier's product is licensed, since insurer-issued products sit under a different code.

Concentration should be counted rather than felt. Pull the share of last year's production that plan's patients accounted for. Two plans with the same ratio are different decisions when one holds a small slice of production and the other holds most of it.

Administrative load is the variable that hides: preauthorization requirements, narrative attachments, downcoding and repeated resubmission all cost staff hours that never appear in a write-off column.

Which patients can follow you out of network

Some can and some cannot, and the plan type decides it before loyalty does. The Texas Department of Insurance sets out the general shape of the four network types: HMO and EPO members who go outside the network may owe the full cost themselves, while PPO and point-of-service members can see any provider at a higher out-of-pocket cost 4Ref 4Texas Department of Insurance (2026).Health care coverage guide.The generic out-of-network rule by plan type: HMO and EPO members may owe the full cost outside the network, while PPO and point-of-service members can go out of network at a higher out-of-pocket cost.. A PPO patient keeps a benefit when you leave.

So sort the panel by plan type before anyone gets a letter.

Nationally, spending on dental services reached $165.3 billion in 2022, roughly a 4 percent share of total health spending 5Ref 5Centers for Medicare & Medicaid Services, Office of the Actuary (2022).National Health Expenditures 2022 Highlights.National framing for cash-pay replacement revenue: dental services spending of $165.3 billion in 2022 at roughly a 4 percent share of total health spending, and the 34 percent of out-of-pocket spending accounted for by dental services, durable medical equipment, and physician and clinical services together.. Dental services, durable medical equipment, and physician and clinical services together accounted for 34 percent of all out-of-pocket health spending in 2022 5Ref 5Centers for Medicare & Medicaid Services, Office of the Actuary (2022).National Health Expenditures 2022 Highlights.National framing for cash-pay replacement revenue: dental services spending of $165.3 billion in 2022 at roughly a 4 percent share of total health spending, and the 34 percent of out-of-pocket spending accounted for by dental services, durable medical equipment, and physician and clinical services together.. Those are national aggregates rather than your payer mix, and the second pools dentistry with two other categories. It still places dentistry among the three kinds of care that together take a third of what patients pay out of pocket.

A membership plan sold directly to patients is the dpc equation in a dental room: a recurring fee, a defined set of included services, and a panel size that fits the hours you have. Practices commonly write the terms before the termination letter goes out.

What the contract and your state allow

Read the termination clause in the contract first, because the notice you owe a plan for leaving is written there. State law adds clocks of its own, and the two below run the other way: they fix what the plan owes you before it changes your fees or your contract. No national notice period exists for leaving a dental plan, and neither state's rule tells you what happens in a third.

California writes its clock in business days and puts the burden on the plan. A dental service plan must give a contracted dentist at least 45 business days' written notice before certain material changes to claims payment, or to policies affecting provider rates and fees, take effect 6Ref 6California State Legislature (2012).California Health and Safety Code Section 1375.7 ("Health Care Providers' Bill of Rights").California's dental-plan contract thresholds as one state example: at least 45 business days' written notice before certain material changes to claims payment or to policies affecting provider rates and fees, and 60 days to supply a fee schedule the provider requests.. A dentist who asks for the plan's current fee schedule is owed it within 60 days 6Ref 6California State Legislature (2012).California Health and Safety Code Section 1375.7 ("Health Care Providers' Bill of Rights").California's dental-plan contract thresholds as one state example: at least 45 business days' written notice before certain material changes to claims payment or to policies affecting provider rates and fees, and 60 days to supply a fee schedule the provider requests..

Virginia writes its clock in calendar days and gives the provider the shorter window. A carrier must give at least 60 calendar days' notice before a contract amendment takes effect, and the provider then has 30 calendar days to notify the carrier of an intent to terminate rather than accept the change 7Ref 7Virginia General Assembly (2026).Code of Virginia Section 38.2-3407.15, "Ethics and fairness in carrier business practices".Virginia's differently structured rule (60 calendar days' notice of an amendment, 30 calendar days for the provider to declare an intent to terminate) and the exclusion of stand-alone dental plans from its clean-claim and downcoding-dispute protections..

Virginia also carries a carve-out. Its downcoding-dispute protections, the notice and review a carrier owes a network provider when it downcodes a claim, do not apply to stand-alone dental plans 7Ref 7Virginia General Assembly (2026).Code of Virginia Section 38.2-3407.15, "Ethics and fairness in carrier business practices".Virginia's differently structured rule (60 calendar days' notice of an amendment, 30 calendar days for the provider to declare an intent to terminate) and the exclusion of stand-alone dental plans from its clean-claim and downcoding-dispute protections., so a dentist there cannot assume the dispute rights a medical provider has. One carve-out is not a pattern. But it is a reason to read your own state's provision for the words stand-alone dental before assuming a protection reaches you.

The lookup is short: the contract's termination and amendment clauses, your state insurance department's provider pages, and the carrier's current fee schedule, requested in writing.

Drop one, then measure before the next

Leave one plan at a time and let two quarters pass before the next decision. A drop order built on a spreadsheet is a hypothesis about how patients, hours and collections will move, and the only way to test it is to make one change and watch the same six columns. A practice that terminates two or three plans in one quarter loses the ability to say which one caused what.

• Send the termination in writing, by whatever method the contract names, and keep proof of delivery.
• Read the contract's terms for treatment already in progress before setting the effective date, since those terms decide what you owe patients mid-course.
• Tell the patients whose plan type leaves them no out-of-network benefit first.
• Recompute the sheet after two quarters, same columns, same twelve-month window.

Bring the finished sheet to your accountant: the twelve-month CO totals, the hourly overhead figure, each plan's share of production, and each contract's notice period. The ranking you can run alone. Whether to send the letter is worth deciding with someone who sees the whole year.