Should dental associates be responsible for lab fees?

[_ToothBeTold_]

Hello! I am reviewing a contract for an offer at a private practice and was wondering if dental associates should be responsible for lab fees? And if so, how much?

My current contract indicates I will be paid a base salary for 6 months. It then states, "Employee compensation after the initial 6 month period shall be based on 35% of collections LESS 50% of associated lab fees LESS monthly base draw”

I have seen that many corporate dental practices cover associates lab bills at 100%... is it normal to see private practice having their associates pay 50%? Or should it match the compensation percentage (i.e. 35%)?

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[allDAT]

It should match the compensation, so if you’re paid 35%, you’ll pay 35% of the lab bill. Careful with draws. Make sure you have a dental specific attorney help you before you sign.

Careful with lab fees if you’re offering 3rd party financing because that decreases collections too. Labs fees and Ortho don’t mix well either.

 

[_ToothBeTold_]

It should match the compensation, so if you’re paid 35%, you’ll pay 35% of the lab bill. Careful with draws. Make sure you have a dental specific attorney help you before you sign.

Careful with lab fees if you’re offering 3rd party financing because that decreases collections too. Labs fees and Ortho don’t mix well either.

Should the draw be the same as the initial base salary? And regarding negotiation of the lab fee percentage, would you ask for 100% (and see if it is accepted) or directly ask for 35% to match the compensation?

 

[nobeldds]

Hello! I am reviewing a contract for an offer at a private practice and was wondering if dental associates should be responsible for lab fees? And if so, how much?

My current contract indicates I will be paid a base salary for 6 months. It then states, "Employee compensation after the initial 6 month period shall be based on 35% of collections LESS 50% of associated lab fees LESS monthly base draw”

I have seen that many corporate dental practices cover associates lab bills at 100%... is it normal to see private practice having their associates pay 50%? Or should it match the compensation percentage (i.e. 35%)?

In the scenario that you are describing, they are essentially proposing that you pay 17.5% of your lab bill. I think that this is very reasonable.

I believe that requesting an associate to pay a portion of their lab fee is much more reasonable than proposing to pay them on collections vs adjusted production. Usually a private office that has you paying a portion of your lab fee will give you the freedom to choose what lab and materials you want to use. While it may be true that large corps will not have you pay your lab fees, you will be discouraged from using anything but the cheapest available labs/materials.

It’s like living in an apartment where the landlord pays your utility bill. Sounds nice at first but they may regulate your thermostat for you and keep you sweating in the summer. In the end it just depends on what is valuable to you.

 

[allDAT]

Should the draw be the same as the initial base salary? And regarding negotiation of the lab fee percentage, would you ask for 100% (and see if it is accepted) or directly ask for 35% to match the compensation?

There are too many variables to offer you advice here. Some things you should be thinking about:

Is the offer competitive for the area?
Is the practice busy enough to support a draw (you could owe them money if you don’t produce/collect)? You should get rid of the draw IMO.
What are their fee schedules and do their fee schedules support you paying half the lab bill? You’ll need every fee schedule for each insurance to evaluate.
How much of the adjusted production is not collected? Most offices don’t collected around 2-3% of adjusted production. Ask to check AR 60+ and 90+ to get a sense of collections. 90+ is basically not going to be collected.

How will they handle collections when you leave? Will you continue to be paid on collections and if so for how long?

Lots of questions.
Talk to your attorney about it and negotiate from there.

 

[Mauricio45]

Here in Canada, it's standard for associates to pay 100% lab fees and pay on 40% collections. It's interesting how in the States it varies drastically region to region.

 

[AONLINE]

A corporate offered me a contract of a guarantee salary for first 12 months or 30% collection, whichever is higher. No draw. Associates do not pay lab fees. Just to give you a data point.