How to Manage In-house Dental Plans When Selling Your Practice

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By Susan Spear, SAS Transitions, Inc. Dental Practice Brokers
From the Summer 2019 Journal of the Colorado Dental Association

In-house dental plans are growing and can offer a solution to dental insurance plans that don’t meet the needs of all patients. They are also a way to offer dental services to those who don’t have dental insurance. The typical individual plans may look like this:

  • Plan coverage is for one year with an annual membership fee

    The American Dental Association Council on Dental Benefit Programs has developed an Employer Dental Plan Toolkit, which helps employers evaluate their employee dental benefit plans. These plans can help build a patient base and retain patients.

    Download the toolkit: (member login required)

  • Two recare hygiene appointments with doctor exams
  • One set of bitewing x-rays per year
  • 10% to 20% discounted fees on all restorative care (some programs stipulate 20% on all restorative care other than implant placement or orthodontics, etc.)

Other benefits may include updates on full-mouth x-ray series every three-to-five years at no additional cost while still on the plan or no fee for dental whitening procedures, etc. The total program fees can vary greatly. The most common costs for similar programs are $250 to $375 per year for an individual patient. These programs usually have a flat fee, which is paid at the time the patient signs up for the service (prepaid).

If prepaid programs are in place, the selling dentist will need to establish a mechanism for transferring the value of the remaining services to the new owner. Each patient in the program will be at a different point in their plan with a different obligation due from the seller. An issue arises when the seller cannot determine how much of the in-house dental plan will be owed to the buyer at the time of closing. Since the seller has already collected the money for this plan before the sale of the practice, the seller will need to pay the buyer for any services still left on plans of patients who have not used all the treatment services. To avoid the surprise of this expense, the seller can breakdown the value for each service and learn what the remaining value is for each patient’s plan. Not knowing this information at time of the sale can cause disagreement on the amount owed to the buyer. Establishing the in-house dental plan value upfront prevents unnecessary negotiation.

The process for determining what your program costs will be should include a breakdown of each segment of the treatment you provide under the plan. Let’s say your program costs $275 for the type of program outlined above. Determine how much each of these services will cost for a year’s program. Obviously, it will be discounted from your UCR fees, as it is a promotional program that can be used to grow the practice and maintain loyalty. Determining how the services breakdown into individual fees will help you determine what the remaining cost benefits will be for any patient on the program. As an example, if a patient has received one recare hygiene appointment with a doctor exam but did not have bitewing x-rays taken at this visit, the value of the services for the patient would be $125.00. The program values each recare hygiene appointment with exam at $125.00. The bitewing x-rays would be $25.00 (2 x $125.00 = $250.00 + $25.00 = $275.00 annual program cost). The remaining amount to be transferred to the new dentist is $150. The discounts for restorative care will need to be accepted by the buyer going forward at least until the end of the plan. Accepting these discounts is beneficial to the buyer so the patient doesn’t experience an immediate change in policy. The discounts are often less than most insurance plans, which buyers find as a benefit as well.

There are also programs where the dentist works with a company that provides financing for patients. The finance company takes payments from the patient each month. If your plan is connected to a finance company, there should be knowledge of how the lending process works and if the patient can cancel their commitment at any time. Some companies require a contract that must be honored until its completion. With this type of financing, the dentist is paid on a monthly basis for services rendered. If using a program like this for patients, understanding the reimbursement process is very important to ensure the seller is paid for the services he/she has provided before the sale of the practice. Again, a breakdown of the cost of each treatment service is valuable in determining whether the seller owes the buyer, or the buyer owes the seller at the time of the sale. The buyer may owe the seller in this situation for treatment provided because the seller has not collected enough compensation through the monthly payments. It is also important to know if the payment process through the financing company can transfer directly to the buyer and if so, what needs to happen in order to create a smooth transfer of the payments.

In addition to knowing the breakdown of costs, a monitoring or accounting process should be in place for patients from the time they begin their new in-house dental plan to ensure it can readily be accessed at any stage of their care. To manually gather this information takes time, can affect the flow of patient care and adds undue stress to all parties.

In-house dental plans have proven to be successful and are growing in popularity. However, their effect on the sale of a dental practice is often overlooked. If you have a long-standing program in your office, now is the time to clarify and account for its value. If you are just starting a new plan in your office, start it right from the beginning using a method for valuing the services and tracking the treatment for each patient. Don’t let the lack of attention to your plan compromise an otherwise successful sale.

Susan Spear is a licensed broker and business intermediary with SAS Transitions Dental Practice Brokers. Contact her at 303-973-2147 or, or visit

A legal opinion should always be sought prior to starting an in-office dental plan and when considering selling a practice.