Dental Practices NAICS 621210

Aug 1, 2025 - Surcharge Programs Must Be Carefully Evaluated

• Many dental practices are passing credit card processing fees onto their patients to protect their margins against rising operating costs, according to Dentistry Today. There are compliance issues, however, as not every state allows surcharging, and card networks like Visa and Mastercard have strict rules about how surcharges are disclosed, how they’re calculated, and when they can be applied. Dental Economics notes that while passing card processing fees to patients might seem like a simple fix, the financial and tax implications are often more complex than they appear. Missteps in how surcharges are recorded or taxed can trigger red flags with the IRS, potentially leading to audits, penalties, and administrative headaches. A common oversight is failure to account for surcharges accurately when filing taxes. For example, if a dentist charges a 3% surcharge on a $200 procedure, bringing the total to $206, that $6 must either be reported as income or offset as a processing expense. If it’s not addressed properly, even small discrepancies between what’s reported on tax returns and the amounts shown on 1099-K forms from processors can raise red flags. Rules about taxing surcharges differ by state. Some require the surcharge to be taxed; others do not. If a dental office taxes the base service but omits sales tax on the surcharge, or vice versa, they could find themselves out of compliance. Dental practices must also consider their contracts with insurance providers, which may include clauses regulating how payments are processed, if there are ceilings or set prices for covered services or products, and whether additional fees can be passed on to patients. Violating these contracts could lead to reimbursement issues or even termination of the provider relationship.
• About 27% of US adults — an estimated 72 million people — do not have dental insurance, according to the CareQuest Institute for Oral Health. That is nearly three times the number of adults who lack health insurance (9.5%, or 26 million). Adults with lower incomes and education levels are more likely to lack dental insurance. About 40% of adults without a high school diploma and 38% of those earning under $30,000 annually are uninsured for dental care.

• Consumers now look to spend their health-care money on what will give them the greatest return on their investment, according to Dental Economics (DE). DE cites studies by Pricewaterhouse Coopers that “predict a $1 trillion shift away from traditional payers and providers to new ecosystems that expand beyond product partnerships to include closer connections with technology hyperscalers, AI disruptors, value-chain solution providers and patient-focused innovators.” Consumers, not insurance companies, are leading the way, according to DE. This means that the days of focusing on volume-driven, insurance-dependent and transactional patients are over.
• Dental practice employment and average wages for nonsupervisory employees decreased slightly during the first five months of 2025, according to the US Bureau of Labor Statistics (BLS). Dental Practices slightly raised their prices during the first six months of 2025, according to the BLS. Dental practice sales are projected to grow at a compound annual growth rate of 4.98% from 2025 to 2029, faster than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund. The Producer Price Index for dental practices increased 2.02% year over year in May, according to the BLS.