Exclusions/Limitations and Cost Containment
- Pre-Existing Conditions
- UCR – Three Different Concepts, Not One
- Annual Maximum
- Managed Care Cost Containment Measures
Some group health plans restrict coverage for dental conditions present before an individual’s enrollment in the plan, such as missing teeth. These restrictions are known as “pre-existing condition” exclusions. If a plan imposes pre-existing condition exclusions, the length of the exclusion must be reduced by the amount of any prior creditable coverage. A certificate of creditable coverage will indicate the time the employee has been continuously covered under a plan and allows waiver of any waiting period to a pre-existing condition. Most coverage can be considered creditable coverage, including group dental coverage, COBRA continuation coverage, or coverage under an individual dental policy. If 63 days or more have passed without any coverage (called a break in coverage) a plan may not have to count the coverage before the break as creditable coverage.
Dental plans may use the terms “Usual, Customary and Reasonable” (UCR) to determine the portion of the dental treatment fee they are willing to pay for a particular procedure. As noted earlier the terms Usual, Customary and Reasonable are not interchangeable and “UCR” is a misleading acronym. Usual fees are determined by the dentist. An insurance company creates its own “Customary” fee schedule. There is no universally accepted method for determining the Customary fee schedule, which may vary a great deal among plans – even when those plans operate in the same area. The fee the insurance company determines to be “Customary” may be lower than area dentists’ Usual fee for the same service.
The benefit paid will generally be based on a percentage of the insurance company’s Customary fee schedule. Patients often do not know what their out-of-pocket costs will be because third-party payers generally do not release their Customary fee schedule maximums to the public.
Many dental plans feature a total annual maximum – a maximum dollar amount that may be reimbursed each year, even if the patient’s dental costs exceed that limit. A common annual maximum is $1,000 or $1,500, but it is not uncommon to see plans with much higher annual maximums of $2,000 or $3,000 to match the rising costs of dental treatment. These totals can be individual or family maximums.
Cost containment measures are used throughout the healthcare industry and are used to determine the payment for services that have been provided. Health care plans should disclose information on how cost containment measures are used, or how they will affect the claim being considered. Any limitations, exclusions and applied cost containment measures should be described, and the application of deductibles, co-payments and co-insurance factors explained to the patients by the third-party payers and employers before the services are performed.
Some of the most commonly used cost containment measures are:
Least Expensive Alternative Treatment Provision (LEAT)
A dental plan may not allow benefits for all treatment options. A Least Expensive Alternative Treatment Provision is a limitation found in many plans which reduces benefits to the least expensive of other possible treatment options as determined by the benefit plan, even when the dentist determines that a particular treatment is in your best interest. For example, the dentist may recommend a fixed bridge, but the plan may allow reimbursement only for a removable partial denture. The patient may not always understand the payer’s least expensive treatment policy, and what the out of pocket costs are, until the explanation of benefits (EOB) is received.
Claims bundling is the systematic combining of distinct dental procedures by third-party payers that results in a reduced benefit for the patient/beneficiary.
Downcoding is a practice of third-party payers in which the benefits code has been changed to a less complex and/or lower cost procedure than was reported except where delineated in contract agreements.
Predetermination of benefits is an administrative procedure that may require the dentist to submit a treatment plan to the third party before treatment begins. The third party usually returns the treatment plan indicating one or more of the following: patient’s eligibility, covered services, benefit amounts payable, application of appropriate deductibles, co-payment and/or maximum limitation. Under some programs, predetermination by the third party is required when covered charges are expected to exceed a certain amount.