By Karen Mouton, Dental Systems, Inc.
Most patients need to maximize their dental insurance policy, but understand little about their benefits. Their employee dental handbooks are full of terms the insurance layman wouldn’t understand, and so are of little help to them. Your patients will probably count on your office to interpret and relay their policies’ benefit information. There’s a lot of insurance lingo out there that denote industry-standard rules of thumb. Here are a few phrases your staff is sure to come across and should understand.
Insurance carriers’ administrative decisions regarding how claims are processed may vary considerably, since not all procedures and guidelines are addressed in policy or employee dental-insurance handbooks. For example, Carrier A may allow a periodontal procedure every 6 months, while Carrier B might typically allow that same procedure once every 2 years. Carrier C might have no frequency limit to the procedure when it’s dentally necessary.
Most insurance carriers’ limitations, exclusions, and provisions are based on cost rather than dental necessity.
A “dentally necessary” treatment is deemed as such by the claim administrator. I.e., if a procedure is excluded by an insurance company, it’s doesn’t mean it‘s not necessary. It’s an indication of a restriction of a specific plan. This restriction may be due to an age limit for that procedure, a waiting period or a frequency limit, for example. If coverage is inadequate on certain procedures, it’s likely that coverage in this area was reduced to lower the cost of the employer’s insurance premiums.
“Alternate Benefit Clause”
A common limitation to policies is the “alternate benefit clause.” This is a cost containment feature that means, if there is a less expensive treatment or method that can produce the same satisfactory result, the plan will pay for the least expensive treatment—and not necessarily the actual procedure performed! For patients, this can mean a greater out-of-pocket expense, since the carrier may pay for a lesser procedure than what was actually performed.
“Most Extensive Procedure/Most Inclusive Procedure”
Carriers often have a policy that’s referred to as “most extensive procedure/most inclusive procedure.” Here are some examples of this. If you perform a periodontal surgical procedure and root planing on the same quad on the same day, the plan will only pay for the most extensive treatment. There will only be a benefit paid for the surgery, and the root planing will be denied. Another example: if a buildup is done the same day as a crown, the plan will often only pay for the crown—not both.
“Coordination of Benefits” (COB)
If a patient has coverage under two different policies, he or she often thinks the entire bill will be covered by insurance. The reality is this is often not the case. “Coordination of benefits” (COB) is required when there’s more than one carrier involved in the payment of claims.
If the plan has a “Standard” COB, claims will be coordinated so that the total payment will not be more than 100% of the actual charges or doctor’s fee. The double coverage provision is intended to prevent payments exceeding total expenses.
To reduce the cost of insurance premiums, many plans will have a “Non-Standard” COB. In this case, the secondary carrier will only pay the difference of the amount it normally allows minus the amount the primary carrier paid.
For example, a primary carrier pays 70% of the cost of a filling, and the secondary carrier normally pays 80%. When the secondary receives the claim, it will only pay the 10% difference between what the primary paid and what its normal allowance is. Standard COB would have paid the remaining 30% of the claim amount.
Fee Charged vs. Fee Paid
“Usual, Customary, and Reasonable” (UCR)
Premium costs are affected by the “ceiling amount” a carrier will pay per procedure—its “usual, customary, and reasonable” (UCR) fee. This allowable-reimbursement amount is based on the first 3 digits of a practice’s location. Each insurance carrier has its own “UCR” fee per dental code, and won’t usually disclose these to dental offices, patients, or employers.
Typically, the insurance carrier and employer set the reimbursement level at a fee that varies between what 70%-90% of the dentists in the area charge. For a particular procedure that most dentists charge $550 for, some policies may base their claims payment amount at $600 or higher. However, if the employer wants to keep the cost of its policy down, it has the option to buy a plan that reimburses at a reduced level. In other words, instead of reimbursing at $550 or higher, it may only reimburse $500 or less for the procedure.
A Common Misconception Caused by the Term “UCR”
Let’s say the dentist’s fee is $550 for that particular procedure (in this example, the amount most dentists charge), but a patient’s employer purchased the lower-cost policy that reimburses an amount of $500 or less. The carrier is likely to state on the explanation of benefits (EOB) that the dentist’s fee is above the “usual, customary, and reasonable” fee.
This might make the patient think his or her dentist’s fee is higher than most others. This is a common misconception. The reality is the employer chose a plan that does not reimburse at the level most dentists in the area charge. In these situations, the patient is responsible for additional “out-of-pocket” expenses, since his or her employer reduced the ceiling amount (UCR) in the coverage in order to lower its overall insurance premiums.
It’s important to realize other employers with the same carrier (or even those with a different carrier) may consider $550 a “reasonable” fee.
Obtaining Insurance-Benefits Information
There are multiple sources in the industry that assist dental teams in researching details and limitations of insurance plans. Many insurance carriers will offer a faxback system that provides a summary or outline of coverage. Other carriers may have limited information on their websites. Electronic “patient eligibility” services are available for purchase from various dental software companies. However, these options won’t provide the intricate, fine-print details dental offices want.
Simply using one of these methods—or even a combination of them—won’t eliminate the need for phone calls to carriers. A majority of offices admit they need more detail than faxbacks, websites and eligibility programs provide. Most have created an insurance verification form listing common procedures they perform, and the details they feel are needed for their practice. It could easily take 20-30 minutes to get benefits per patient, including on-hold time.
Take time to share with your patients information on their insurance limitations. An informed patient is a happier one.