Finance and valuation
Lab fees
Lab fees are what a practice pays dental laboratories for crowns, dentures and other lab-made work, and they are counted as a direct expense of treatment.
The ADA's guide for dental associates says expenses may be direct, such as lab fees and provider discounts, or indirect, such as overhead. In its worked example, lab fees are deducted from production before a net-production pay formula is applied, so lab costs can change an associate's pay. ADA News (March 2022) lists lab fees with payroll and supplies as variable costs. Lab fees rise and fall with the volume and type of cases, which is why they are tracked with supply costs. Associate contracts should state whether lab fees reduce the base for production-based pay. They also affect net production in some formulas.