How dental membership plans work for practices and patients

A dental membership plan is a plan that a practice offers directly to patients who do not have dental insurance, or who do not use it there. The patient pays the office a set amount, and the office gives defined services in return. This post explains the model with ADA sources and lists the checks to run before launch. It is general education, not legal or tax advice.

What is a dental membership plan?

The ADA calls it an in-office dental plan, “sometimes called a dental membership savings plan or direct primary care agreement.” The ADA explains the structure: “Under such a plan, the patient pays the doctor or dental office a fixed amount of money on a monthly or annual basis. In return, the patient generally receives preventive services at no charge, with other procedures offered at a discounted fee.”

The glossary entry on the in-house membership plan gives the short definition. The plan is a contract between the practice and the patient, not a contract with a carrier. That is why state rules matter, as shown below.

Why do practices consider these plans?

The ADA frames it as an option for a practice that does not join commercial plans. It says “research shows that patients who have a benefit plan are more likely to seek dental care and accept treatment plans,” and that for “a growing practice that does not participate in a commercial dental plan,” an in-office plan “may be a viable option to improve patient engagement and retention.”

That statement is a possibility, not a promise. Results depend on the practice, the patients and the plan design. Treat any number you hear about growth from a plan with caution unless it comes with a named source and year.

A practice that is out-of-network with many carriers, or that has patients with no dental benefits, is the typical fit. The out-of-network dental practice post covers the network side.

How does a plan compare with insurance?

The first column describes what the ADA page says about the model. The practice chooses the exact terms, so two plans can look different.

What should a practice check before launch?

The ADA says the Council on Dental Benefit Programs “has developed a toolkit to help dental practices evaluate whether an in-office dental plan option is right for them.” The toolkit “contains a document that addresses common legal considerations and implementation steps, and includes checklists, a list of regulations by state, and a sample letter to introduce the program to patients.”

Steps a practice can take:

1. Read the ADA toolkit and its state regulations list.
2. Check your state’s rules on direct primary care agreements. The ADA insurance page links a status page for this.
3. Ask an attorney how the plan should be worded, whether it must be registered, and how to word marketing.
4. Check any PPO participation contracts you hold. Some contracts address discounts and how the practice treats its other patients.
5. Ask a CPA how to record the payments and handle taxes.
6. Review the ethics rules on fees. The ADA Code of Ethics says “it is unethical for a dentist to increase a fee to a patient solely because the patient is covered under a dental benefits plan.” Your plan fee and your regular fee schedule should line up in a way that you can explain.

How can a practice model the cost?

The ADA toolkit “contains a calculator in Excel spreadsheet format to help predict the financial impact of adopting an in-office dental plan.” Use it, or build your own, with these inputs:

• The membership fee and the number of members you expect.
• The services included at no charge and the time each one takes.
• The discount on other procedures and how often members use them.
• The cost of billing, software and any outside vendor.
• The change in schedule load, since included visits take chair time.

Run a low, middle and high case, and write down your assumptions. Do not copy a member count or a revenue gain from an article or a vendor page without a named source and year.

What about vendors?

The ADA notes that for offices that “wish to hire an outside vendor for assistance in creating an in-office dental membership plan,” it provides a link to an ADA endorsed option. An endorsement from the ADA is not a fit check for your practice. Ask each vendor for its fees, contract length and exit terms, and have an attorney read the agreement.

How should a practice present the plan to patients?

Keep the wording plain and factual. State what is included, what it costs, what is not covered and how to cancel. Avoid pressure language, promises of savings and the word “insurance” if the plan is not insurance. The ADA toolkit includes a sample patient letter that you can adapt. Have your attorney review all patient-facing wording, including the website, as part of the state rules check.

Next step

Plans like this sit inside wider growth planning, covered in the grow a dental practice guide, and they connect to the choices in the PPO participation decision guide. To discuss practice finance topics with Dr. Jon Copeland, DDS, a general dentist in Wildwood, Missouri, contact Dr. Copeland about consulting.