Ownership and transitions
Collections-based pay
A pay method that sets an associate dentist's earnings as a share of the money the practice actually collects from that dentist's patients, not of the fees billed.
Collections-based pay ties compensation to cash that reaches the practice. The ADA defines collections as the net amount the office actually collects for a procedure. Fees that the office writes off, or never receives, do not count toward the pay base.
This differs from production-based pay, which uses the fees charged for the work. The ADA notes that a pay formula may use total production, adjusted production or collections.
The terms of the formula sit in the written contract, so readers often review the employment agreement with an attorney. Collections also depend on the practice's billing work, which the dentist may not control. This entry explains the term. It is not advice about any specific offer.