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ADA, NADP share views on claims processing delays

'Steps should be taken to ensure that payments are as prompt as possible'

This is the third installment of a series of ADA News articles on dentists' "Top 10" concerns submitted to the ADA about their dental claims. These articles include perspectives from ADA members, National Association of Dental Plan members and the Council on Dental Benefit Programs.

Claims processing delays and requests by payers for additional information were among the most frequent concerns ADA members complained about to the ADA during 2005.

Dentist and dental benefits industry perspectives on dental claims denials were featured in the Nov. 20, 2006, and Jan. 8 ADA News.

Subsequent articles will cover the remaining nine of the "Top 10" concerns, which include lost attachments, bundling and down-coding, post utilization review, assignments to participating doctors only, provider contract issues and others.

Claims Processing Delays

Dentist perspective

Insurance payments are a key component in the income stream for many dentists, and when prompt payment is not received, dentists may have trouble paying staff and other administrative expenses.

The Council on Dental Benefit Programs believes that once professional care has been delivered to the patient the dentist deserves prompt financial compensation. Delayed or denied insurance payments may already affect the dentist-patient relationship; steps should be taken to ensure that payments are as prompt as possible.

Although 46 states have prompt-pay laws, those laws apply only to "clean claims," or claims submitted to third-party payers without any missing or wrong information.  Many times clean claims are rejected for missing claim information that is clearly written on the claim form. Many dentists consider this a stall tactic by the insurance company in order to delay the payment to them.

Third-party payers often dispute claims on the basis that services were not necessary or that a different procedure should have been done. Payment is delayed until the dentist provides additional information. Often the carrier asks for more information or clarification of the information submitted. Resubmitting these claims is often a time-consuming and costly process for the dental office.

According to CDBP, any delay in claims payment is compounded by the cost of collection activities, bad debt ratio, as well as the time value of money to the practice.

The ADA, through the CDBP, has been working with the NADP to try to improve the efficiency and speed of claims settlements and thus improve dentist-patient, patient-carrier and dentist-carrier relationships. The ultimate goal has been to reduce unnecessary and unsolicited submissions, which is a growing problem and expense for dentists and ­carriers.

Many dentists believe that all claims should be thoroughly reviewed before a request for additional information is sent to the dentist. They also believe that when a consultant requests additional information to process the claim, the claim processing should be expedited once that information is received.

Dental benefits industry perspective

Payers are aware of the importance of claims payments to dentists. The dental insurance industry processes more than 250 million claims annually with about 70 percent being auto-adjudicated, which means processed with computerized decision logic that is linked to the provisions of an employers' group policy. Auto-adjudication is used with both electronic claims and paper claims to improve processing speed and identify claims that require staff review. Paper claims are either scanned or keyed into the system. Handwritten entries on claim forms, light print or unclear copies may result in some information not being captured from the original paper submission. As in any system, the complexities involved in claims processing can create misunderstandings as well as break down.

Regulations and employer group requirements: Payers are regulated by the states for prompt payment of claims. This is not only required by law in many states, but is actually part of performance guarantees mandated by many large employer groups.

Performance guarantees are a tool by which these employers identify claim processing timeliness and accuracy rates which the payer must meet. Failure to do so results in penalties, such as financial fines or loss of the employer as a client.

In self-funded situations, employers determine covered benefits and how quickly claims are processed and paid since the employer's money is at risk. About 37 million Americans are enrolled in dental plans through employer self-funded groups. This is 26 percent of the private market for dental benefits. In these cases, the payer performs as a dental administrator and is obligated by contract to process claims within the time frame specified. These groups are regulated under federal law—Employee Retirement Income Security Act of 1974—not state law.

Industry data shows that 93 percent of all dental claims are processed within 10 days—well below the time required under the typical state "clean claim" laws. Payers do not want to handle claims multiple times nor is there an advantage in delaying payment because delays:

  • add to the cost of administration;
  • create complaints from dental offices and consumers;
  • impede the payer’s ability to meet performance guarantees.

Claims processing pitfalls: The ADA claim form is the prime document that conveys what was done, when and to whom, and acts as the bill to ensure the dentist is paid. The clear and complete form should result in prompt and accurate reimbursement. Payers find that some common information which is needed for the adjudication process and coordination of benefits is often missing.

It is also common for periodontal charting and X-rays to be missing from claims (when required). Payers recognize that it can be difficult to check each payer's requirements for attachments. NADP has partnered with National Electronic Attachment, Inc. to create a single online portal for dental offices to check payer attachment requirements. This portal, NEA FastLook, was launched in January and can be found at www.nea-fast.com.

In addition to missing attachments it is not unusual for a payers to receive claims with outdated Code on Dental Procedures and Nomenclature codes. This requires that the claim be reconciled to CDT 2007 which payers are required to use under federal HIPAA law and can cause delays.

Another common claim submission error is for the payer name or code to be reported incorrectly. This may be due to outdated practice management software or submitting through vendors that have not updated their lists. One clearinghouse reported that 9,258 claims were submitted by 3,883 dental offices in one month under a payer name or code that had not existed for more than five years. Clearinghouses have created databases to get these claims into the system, but the use of out-dated information does create delays for some claims.

Another issue payers face is receiving claims for other payers. Often this results from mailing large batches of claims in a single envelope. To comply with privacy laws, the payer must return these claims directly to the dentist.

Reviews for dental necessity: In limited instances (less than 5 percent of claims) there may need to be a review for dental necessity. Dental necessity is a provision in many dental benefit policies, but may not be utilized by every payer. Some payers have dental directors or dental consultants who are licensed dentists to review specific claims. A discussion of claims denials was published in the Nov. 20, 2006 ADA News. The most common reasons for denying a claim for dental necessity are extraction of asymptomatic third molars, osseous surgery in the absence of sufficient pocketing/bone loss, and crown buildup when enough tooth structure is present to retain the crown.

Requests for additional information such as X-rays, further narratives and diagnostic materials usually occur when there is some question on a particular procedure or this information is not initially submitted. When this need arises it is not because payers are trying to discern the course of treatment, but do need to know if the procedure performed falls within the definition of the patient's coverage.

Similarly reviews for dental necessity are not intended to interfere or disagree with the clinical judgment of the attending dentist but rather to identify whether the procedure performed falls within the parameters of the patient's coverage.

—Compiled by Arlene Furlong