An Introduction to Dental Insurance
A dental insurance plan is a financial tool that can assist you with payment of your dental fees. The best way to take full advantage of your dental insurance coverage is to understand its features. We advise you to become familiar with your dental plan so that you can take full advantage of this financial tool.
Dental insurance plans offer a variety of benefit levels with varying features. For example you and your neighbor may both have dental insurance through Aetna but their coverage may differ from yours. In the state of Texas there are over 36,000 dental insurance plans. A dental insurance plan represents a benefit contract between you, your employer, and the insurance company (carrier). If you have a self-insured dental policy the contract is between you and the carrier. Your dentist is never a party to your dental insurance contract. The benefit paid on each dental plan varies according to that chosen by the employer; or in the case of a self-insured policy, according to the insurance product that was purchased.[Don’t have dental insurance but want to know if it’s necessary? Read this.]
Dental Plan Administration and Risk Management
Dental Insurance Plans must both administer the plan and manage the risk of providing the plan. There are various ways this can be done. A plan can be identified based on its role in assuming risk and managing claims administration as follows:
Fully Insured Dental Plan: A dental benefit plan whereby the employer contracts with another organization (insurance carrier) to assume financial responsibility for the enrollees’ dental claims, administrative services, and costs.
Self-Insured Dental Plan: A dental benefit plan whereby an individual contracts with another organization (insurance carrier) to assume financial responsibility for the enrollees’ dental claims, administrative services, and costs.
Self-Funded Dental Plan: A dental benefit plan whereby the employer directly assumes the cost and risk for dental claims incurred by their employees. Employers will usually contract with insurance carriers to administer and process their claims. Insurance carriers in this situation are called third party administrators because they are neither the policyholder or the insurer.
If an employer is self-funding their dental plan, the employer will have control over the benefit features; while the insurance carrier merely administers the plan on behalf of the employer. If your employer has purchased the insurance product from the carrier, or as a self-insured individual you have purchased the insurance product from the insurance company or carrier, then the insurance carrier controls both the benefit features and plan administration. Much like other types of insurance, the price of the policy and/or the generosity of the employer determines the benefit features you receive. Even the most generous of policies is designed merely to to assist you with payment of your dental bills not fund everything related to your dental health.
At Crabtree Dental our fees are carefully evaluated and set based on the time, materials, skill, experience, overhead and service required to deliver your care. We maintain only one fee schedule and do not assess different fees to patients based on their level of insurance. Often a patient believes that an insurance company who pays 100% on a particular procedures will pay for ALL of it. While that is a reasonable assumption and may be true of some carriers, it is not true of all. Most carriers have a “ceiling amount” they will pay per each dental procedures. Instead of calling it a “ceiling” your insurance company will likely use the term “UCR” or ” allowable”. If a treatment fee is higher than their “UCR” or “allowable” they will pay 100% of their fee not the dentist fee. This is one way the insurance company controls the cost of a plan. These fee schedules or allowances are considered proprietary and are not usually shared with dentists, employers or patients in advance of treatment.
UCR stands for usual, customary, and reasonable. These three words roll off the tongue of an insurance expert almost always in an unbroken string, and many think they are interchangeable terms, but they aren’t. Rarely do we stop to explain what they really mean. It can shed a light of understanding on these terms if they are used separately in their own sentences.
- Usual: a fee the provider usually charges for a given service
- Customary: a fee that is representative of the customary fee charged for that service in a given geographical region
- Reasonable: a reasonable modification to a fee based on complications or added circumstances of treatment
Dentists are free to set their own usual fees. The insurance company’s fee schedule is called customary, but it may or may not accurately reflect the fees for dentistry in a geographic region for various reasons. Each carrier determines UCR fees differently. Data gathered from dentists through the process of tallying claims provides statistical data to help generate the fee tables. The data may or may not be current; the regions it is collected from may or may not be representative of the area geographic you live in. After collecting this data, a UCR value is set using a percentile system. You are probably most familiar with this when talking about standardized test scores, but this concept is also valid for this discussion. An insurance company sets their UCR fee table at a percentile that they need to operate in to be profitable. Some carriers set their UCR’s in the 80-90th percentile, but others can set it far below at say, the 50thpercentile. And of course the premiums that they charge are directly correlated with the percentile they operate in. In short, UCR Fees vary widely among carriers, because they operate under differing business models.
Just because your dentist’s fee is higher than the UCR fee of your insurance company doesn’t mean that they are charging too much for the service. Realize that you do not know how the insurance carrier calculated their UCR and they do not usually disclose how their UCR schedules are established. Insurance companies need to control expenses, and setting their UCR fee schedule at a lower percentile aids them in doing this.
Table of Allowances
Within your dental insurance plan, reimbursement can also be based on a fixed fee schedule, often called an “Allowance Table”. The insurance company assigns a fixed dollar amount for each procedure. Fee schedules vary and are not always representative of the prevailing fee, resulting in a lower benefit level. For example, your fee for a specific dental service is $100 your insurance company fee table may provides a benefit of $90 for that service. Your estimated portion is the remainder from the charge and the allowable, which is $10. If however, your dentist is a provider in the insurance network, the table of allowances will represent the discounted fee they have agreed to accept for that service.
Types of Dental Benefit Plans
Because we live in a free market economy there are many different kinds of dental benefit plans. Plan types can vary in different regions of the country. Here in Katy, dental plans are divided into three major types known as Traditional Indemnity, Preferred Provider Organizations, and Dental Health Maintenance Organizations. The following explanations represent the types of plans most commonly encountered in our practice at Crabtree Dental.
Traditional Indemnity (Fee-for-Service plans): Indemnity is defined as “security or protection against a loss or other financial burden”. A dental indemnity plan then provides insurance to protect you from financial loss due to dental disease or trauma. Traditional plans allow patients the freedom to be treated by the dentist of their choice. Reimbursement for dental claims is usually based on a percentage of the procedures performed. Most plans will have a maximum fee allowed for each procedure known as a UCR fees (see explanation of UCRs below). For example, if a dental service provides a benefit of 50% for a $100 service with a UCR of $90, the insurance company will provide the patient a benefit of $45, and the patient will pay the $55 remaining (this example does not consider annual deductible or maximum). A traditional indemnity plan can be paired with a PPO creating a hybrid of the two types (see PPO).
Preferred Provider Organizations (PPO): This type of plan combines the traditional indemnity plan with a network of dentists who are under contract* to the insurance carrier to discount their fees. The dentist in return is included in the network and therefore is advertised to a wider group of patients. Benefits are calculated much the same as they are in a traditional indemnity plan except a network provider has agreed (via a contract with the insurance company) to “write off” the difference between their fee and the contracted fee listed in the carrier-dictated table of allowances.
In this type of plan patients are free to choose a provider within their network and are almost always free to seek services outside of the network. If a patient goes to an “out of network” provider, benefits are often calculated using a UCR fee schedule rather than the table of allowances used by a contracted provider and no “write offs” are given. Patients treated by an out of network dentist may also be required to pay a greater share of the fee for service perhaps through a higher coinsurance percentage or a deductible paid toward a preventive service. The UCR allowance is often (but not always) substantially higher than the contracted network allowance. Depending on the dental plan, insurance company and service performed many patients incur no more out of pocket in network than out of network. This is almost always true of services in the preventive category.
*The network provider contract (PPO contract) is not the same as the patient’s dental benefit contract. The PPO contract is a separate contract between the insurance carrier (or network developer) and the dental provider. The patient is not a party to this contract. (See section on in/out of network dentists)
Dental Health Maintenance Organizations (Dental HMO or DHMO): DHMO plans are also known as “capitation” plans. In this type of plan, the insurance company contracts with a list of providers from which patients must choose in order to receive dental services. The freedom to choose your dentist is drastically reduced; if the patient doesn’t see a provider in their network then they don’t receive dental coverage. DHMO dentists must provide work needed during the contracted time period and are paid a set amount per month per patient, whether or not the patient visits the dentist. DHMO’s are designed to reduce cost to the lowest level (and arguably a corresponding drop in service), but they are the least popular form of dental coverage because patients are forced to seek services in limited care networks. Because we think the patients freedom to choose the dentist of their choice is paramount, we are opposed to this type of network at Crabtree Dental. We are not and have never been a participating provider in this type of network.
In Versus Out of Network Dentists
Many patients are confused by the relationship that a network provider has to the insurance carrier. They often mistakenly assume that the dentist has become a party to the contract they have with the dental benefit plan’s employer and/or carrier. This is far from the truth as the agreement a network dentist has with an insurance carrier/employer is an entirely separate agreement from the patient’s contract with the insurance carrier/employer. It is usually a simple agreement, often only a couple of pages in length. In a contract of this type, a network provider agrees to “write-off” the difference between their fee for service and the insurance companies allowed fee for that network. This write-off is limited to covered services performed on patients enrolled in the insurance plans that utilize the contracted dentist network. With minor exceptions, this is the sum total of the agreement between the dentist and the preferred provider network. Dentists are not responsible to write-off differences based on plan provisions such as allowances, limitations, exclusion, frequencies, maximums, or downgraded procedures. Dentists who are not “in network” are not responsible to write-off balances.
Patients choose to go out of network every day. At Crabtree Dental, our dentists are providers in only one dental network, and so the vast majority of patients either have fee-for-service plans or have PPO plans and choose to visit us out of network. Patients want to receive quality dental services from caring professionals in an environment they are comfortable with. Patients often neglect dental care because they are dissatisfied with their “in-network” provider options. Rather than go “in network” they stay home, avoiding dental care altogether. This patient soon discovers they are better off paying a little more with the dentist of their choice. Many plans work under a different set of rules depending on whether you are treated by providers who are “in” versus “out” of their network.
Understand Your Dental Insurance Coverage by Learning Your Plan Features
If you want to take full advantage of your dental benefit plan, the best thing you can do is to understand its features and the language used to describe them. Some people think dental insurance is complex, but we can assure you it isn’t akin to rocket science. Much like any field of study, familiarity with subject-specific terminology contributes to a wealth of understanding. To learn about your specific plan, we recommend that you read the benefit book provided to you by either your insurance company or employer. The following general explanations will supplement the information found in your benefits book, thus enabling a better understanding of the particular features of your plan.
– Assignment of Benefits
Typically, upon registration with our practice, patients with dental insurance elect to assign their dental benefits directly to Crabtree Dental. An assignment of benefits is included in the financial agreement you enter into when you first become a patient in our dental practice. When you assign your benefits to Crabtree Dental, you authorize us to submit dental claims and collect dental insurance benefit payments directly from the insurance carrier on your behalf. This does not transfer responsibility for the cost of treatment to us; it merely delays the responsibility for payment until the insurance has adjudicated the claim. Once the claim has been settled, if the insurance carrier paid less than estimated, the balance is immediately due from the patient. Most insurance carriers allow you to assign benefits to the provider of the services.
– Benefit Year
Dental benefit calculations are accumulated during a twelve month period. Usually, but not always, this is based on a calendar year. Deductibles are deemed satisfied and maximums accumulate according to this time period. Sometimes benefits renew on a month other than January 1st. Benefits can also renew individually per person based on the date they became effective under the plan. You should be aware of this benefit period to know when your deductibles and maximums renew. They are important when considering your plan limitations. Keeping track of things that pertain to your benefit year will ensure that you don’t leave your hard earned benefit dollars on the table when the calendar page turns.
– Coverage Percentages and Categories
Dental insurance plans usually classify dental procedures into three categories of coverage: preventive, basic, and major. Each category reimburses specific types of dental services at a predetermined percentage. This means the carrier will pay a certain percentage of the fee for a specific type of treatment and you will pay the difference or coinsurance. Your out-of-pocket cost accumulates in part from coinsurance. The percentage of coverage and the types of dental services within a category vary from plan to plan. (A minority of dental plans don’t use percentages to calculate your dental coverage, but rather benefit a fixed fee for each individual procedure. In these plans your coinsurance is the difference between the dentist fee and the insurance table fixed fee. The way to determine the fixed fees is to obtain a copy of the specific fee table from the insurance carrier.)
The average dental plan classifies services into preventive, basic and major categories; with each one reimbursed at varying percentages. The most common coverage percentages we see in our Katy, TX dental community are 100% for the preventive category, 80% for the Basic Category and 50% for the major category. This means the typical patient coinsurance is 0% for preventive, 20% for basic and 50% for major services. Each category also has limitations and exclusions (think loopholes for the insurance carrier!) that reduce or eliminate the benefit paid by the dental plan. These are the most challenging things to uncover in a dental plan not only for the patient but also for our very able and dentally astute administrative personnel.
The specific procedures that fall under each coverage category will vary per dental plan but services are typically divided in the following way.
Preventive Category of Dental Services: These procedures, typically covered at the highest reimbursement level are diagnostic and preventive in nature. They are reimbursed at such a high level because they want to motivate patients to elect early preventive care. Statistics show that patients who participate in preventive care can prevent dental disease. Prevention of dental disease leaves not only leaves you in better health, it also leaves money in the dental plan. Procedures in this category are services such as dental cleanings, examinations, fluoride, x-rays, and sealants.
Basic Category of Dental Services: This category is usually reimbursed at a percentage 20-30% lower than the preventive category. A typical plan will classify such services as fillings, extractions, root canals, and periodontal treatment. Some plans will classify root canals and periodontal treatment in the major category, but in our experience at Crabtree Dental most plans include them in the basic category.
Major Category of Dental Services: This category is usually reimbursed at a percentage 50 to 60% lower than the preventive category. These services are more complex and because they involve some sort of dental prosthesis they are usually included a laboratory fee such as a crown, bridge, or denture. Though many dental plans do not allow any coverage for dental implants, at Crabtree Dental we are seeing a growing trend toward coverage of these modern alternatives to tooth replacement.
Orthodontic Benefits could be considered a fourth category of coverage. As we do not provide orthodontic services at Crabtree Dental, we do not have the expertise to provide education on this category other than to say that the maximum benefit for orthodontics is usually separate from the general dental maximum and is typically a lifetime benefit per person. Sometimes plans will pay an orthodontic benefit for adults, some will restrict benefit payments to children and youth.
– Annual Deductibles
Almost all dental plans have a specific dollar deductible. This works much like your medical insurance. You will be required to pay part of your dental fees before your dental insurance will kick in with coinsurance payments. Plans vary on the payment of deductibles but most dental plans have a $50 deductible per person against basic and major services each benefit year. Sometimes a family deductible applies; for example, if two to three family members satisfy the deductible, it is considered to be met for the entire family.
– Annual Maximums
Most insurance companies will limit their coinsurance payments to a maximum amount per person each benefit year. This maximum automatically renews each benefit year. If you do not use up all your benefits each year, you lose them, they do not roll over. At Crabtree Dental we see dental plans with maximums as low as $750 and as high as $3,000. The average plan falls at around $2,000. This is not very high considering the typical plan provided $1,000 in benefits over three decades ago when we started Crabtree Dental. Still, we encourage patients to be grateful for something over nothing (that is unless their premium payments are steeper than the benefit received). Your out-of-pocket cost accumulates in part as a result of reaching your maximum annual benefit limit; in that once your maximum has been reached, all services performed will not receive any further benefit payment for the year.
- Dental examinations and cleanings can be limited to two times in a benefit year, two in twelve consecutive months, three times in a benefit year, six months apart and any other combination the insurance company can invent. A cleaning performed even one day early can limit your coverage under a limitation provision. It is important to be aware of what your cleaning limitations are so that appointments are scheduled to maximize your benefit.
- Problem-focused examinations can fall under the basic category even though they are diagnostic in nature. They can be considered as one of two exams per year or benefited as an additional exam.
- Periodontal cleanings are performed on patients who have some degree of periodontal disease; usually the cleaning is categorized in the basic rather than the preventive category.
- Dental x-rays can be limited as to their frequency and timing. Typically bitewing x-rays are covered annually and panoramic x-rays are covered every three to five years. This does not mean that taking an x-ray sooner is not dentally necessary, just that your plan restricts payment for that service on a limited frequency.
- Fluoride typically carries an age limitation that restricts coverage to children and youth. Adults may benefit from fluoride treatment, but insurance won’t pay for you to receive that benefit.
- Sealants are typically limited to children under age 14 and to certain teeth, often with a once-per-tooth-per-life limitation. The age, specific teeth covered, and frequency vary widely among insurance plans.
- Replacement clauses for prosthetic services require the prosthetic to be unserviceable and of at least a certain age, typically five years old, but some carriers require the prosthetic to be as old as ten years.
- Certain categories of services can require a waiting period before benefits are paid. The most common use of this is manifest as a 12 month waiting period for major services, but it can be of any variety towards any and all categories of services.
Typical exclusions include:
- No coverage or limited coverage for implants.
- No coverage or limited coverage for bone grafts.
- No coverage for services done principally for cosmetic reasons. While the effects of such dentistry can change your life, don’t expect insurance coverage for it.
- No coverage to replace a missing tooth if it was extracted prior to coverage under the dental plan.
- Fees in excess of the plan’s allowance.
– Alternate Benefit Clause
This is a cost containment feature that restricts benefit payment to the least expensive treatment or method that would produce satisfactory results. Regardless of the procedure performed, the insurance carrier will re-code the procedure to a lesser, but what it considers to be, adequate procedure. (We often liken this to the old proverbial choice between a Cadillac and a Volkswagen.) Two common uses of the “alternate benefit” clause occur with fillings and dentures.
- A dental plan will recode and downgrade tooth-colored (composite resin) filling procedures performed on posterior teeth. An alternate benefit of an silver-colored (amalgam) filling will be benefited. A resin restoration is technique-sensitive, takes longer to restore, and necessitates the use of more costly materials than amalgam; consequently commanding higher fees. In our experience and community patients simply reject amalgam fillings in their mouth. Patient demand for them was so low that we stopped offering them to patients years ago. Based on the experience in our practice we estimate more than half of dental benefit plans pay the full fee for composite fillings, with less than half opting to control the cost of dental benefit by downgrading the procedure.
- A dental plan can restrict benefit payments to removable denture services rather than fixed prosthetics such as crowns, bridges, and implants. This restriction depends on the number of teeth the patient is missing. The more teeth missing the more likely the provider is to recode and downgrade the procedure and reduce its benefit payment as a result. This is a good use of the old Cadillac versus Volkswagen example.)
- The exclusions and limitations listed above are not a comprehensive list, but are among the most common we encounter in our practice at Crabtree Dental.
– Dental Benefit Coverage under Multiple Plans
A small percentage of patients have more than one dental insurance plan. We call this “double coverage”. The most common occurrence of this is when both spouses have employer provided dental insurance benefits. If you are entitled to receive dental benefits from multiple plans, the plans may coordinate the payments amongst themselves to insure that the amounts paid by all plans will not be greater than 100% of the dental fees. If the insurance plan offers coordination of benefits, it will do so under a specific set of rules which govern which is the primary (code word for- it pays first) and which is the secondary (it pays second) plan. Submitting claims to both plans does not necessarily mean that the plans will coordinate together and pick up the full balance of treatment. Many plans, for reasons of cost containment have invoked a “Non-Duplication Rule” to limit coverage when considered as the secondary plan. Some plans will not coordinate benefits in the presence of two plans or if they coordinate, do so in a non-standard way. Such plan coordination is too complex for dental software to calculate and track. Coordination rules and procedures can be tricky and very difficult to unearth. At Crabtree Dental we will investigate your coverage to the best of our ability, but may have to refuse to take assignment of benefits for the secondary insurance if it is too problematic to provide an estimate of coverage.
In Summary . . .
Undergirding every dental insurance plan is specific contractual language that spells out your dental benefit plan. Please realize that dental benefits are not communicated to employers, consumers or healthcare professionals in a universal format. Your dentist is not a party to that contract and therefore it is impossible to guarantee insurance benefits to any patient.
It is unfortunate when a misunderstanding regarding dental insurance coverage creates an environment of mistrust between the dental practice and the patient. The doctor/patient relationship can be put at risk by a dental benefit contract that is not even a party to the relationship. At Crabtree Dental we would prefer misunderstandings not occur. It is for this reason that we have created this web page. To further communicate, we use clearly worded patient documents and strive to educate patients regarding insurance estimations commencing with registration as a patient in our practice and continuing through each phase of treatment.
The information we provided herein is NOT comprehensive; insurance contracts are more complex than we can expound here. Nonetheless, we hope this Dental Insurance “101” training has given you a basic understanding of how your dental benefits plan can work . . . both for and against you. While we are not party to your dental insurance benefit contract, we are always willing to assist you in understanding your dental insurance plan. Of course, the ultimate authority on your plan is your insurance carrier. For the final word, read your benefits book and contact them with specific questions. Don’t hesitate to voice your concerns to your HR department. Many changes are made to dental coverage as a result of employee dissatisfaction.