Comprehensive ADA Policy Statement on Inappropriate or Intrusive Provisions and Practices by Third Party Payers

The ADA is always looking for ways to help your dental practice operate more efficiently. Oftentimes, this support shows up in the form of an official policy or position. In an effort to improve three-way communication between third-party payers, dental offices and patients in regard to explanation of benefits (EOB) statements, the ADA has issued the following:

The ADA’s Position on Content of Explanation of Benefits (EOB) Statements

The ADA urges dental benefit carriers to consider these principles, statements and recommendations as part of the EOB statements they submit to dental beneficiaries and dental offices. Related ADA policies are identified by name and number and establish, or provide a basis for, the stated positions.

An EOB is a written statement to a beneficiary from a third-party payer after a claim has been adjudicated. The EOB indicates which benefit(s)/charge(s) are covered or not covered by the dental benefits plan. EOB language should be written in a clear and concise fashion to clearly communicate the benefits determination and payments made to beneficiaries and dentists alike.

Unfortunately, EOB language can create confusion between patients and dentists, which can interfere with the dentist-patient relationship. EOB language should provide information that clearly delineates the benefit limitations of the plan and any balance due to the dentist by the patient. It should not contain language that may disparage the dentist or otherwise wrongfully interfere with the dentist-patient relationship.

The ADA urges dental benefit payers to consider the following principles when developing EOB statements sent to patients and dental offices:

1. Standards for Dental Benefit Plans (1988:478; 1989:547; 1993:696; 2000: 458; 2001:429): The extent of any benefits available under the plan should be clearly defined, limitations or exclusions described, and the application of deductibles, co-payments and coinsurance factors explained by the third-party payers to patients and employers using terms that a patient can easily understand. The patient should also be informed of his or her financial responsibility to the dentist for payment, as appropriate. In those instances where the plan makes partial payment directly to the dentist, the remaining portion for which the patient is responsible should be prominently noted in the EOB provided to the patient.

The American Dental Association opposes interference in the treatment decisions made between doctor and patient. Plans which contain inappropriate and intrusive provisions substitute business decisions for treatment decisions made through a patient-doctor dialogue. Such provisions and practices deny patients their purchased benefits and robs them of their rights as informed consumers of healthcare.

Plans which contain provisions, such as those listed below, should disclose them to the plan purchasers and to patients. Dentists should be made aware of these practices when offered a contract.

The ADA is of the opinion that a list of practices by third-party payers that are inappropriate or intrusive and interfere with the doctor-patient relationship includes but is not limited to the following:

Bad Faith Practices: Not treating a beneficiary of a dental benefit plan fairly and in good faith; or a practice which impairs the right of a beneficiary to either receive the appropriate benefit of a dental benefits plan, or to receive the benefit in a timely manner.

Some examples of potential bad faith practices include, but are not limited to:

  • failure to properly investigate the information in a submitted claim
  • unreasonably and purposely delaying or withholding payment of a claim
  • withholding funds from bulk benefit payments for services rendered to unrelated patients as a means of settling disputes over prior claims experienced with the dentist either from an alleged past overpayment by the plan or retroactive ineligibility of benefits for a patient

Inappropriate Fee Discounting Practices: Requiring a dentist, who does not have a participating provider agreement, to accept discounted fees or be bound by the terms and conditions set forth in the participating provider contracts signed by other dentists.

Some examples of inappropriate fee discounting practices include, but are not limited to:

  • Issuing reimbursement checks which, upon signing, result in the dentist accepting the amount as payment in full
  • Using claim forms which, upon signing, require the dentist to accept the terms of the plan’s contract
  • Issuing documentation that states the submittal of a claim by a dentist means that he or she accepts all terms and conditions set forth in the participating provider contract
  • Sending communications to patients of nonparticipating dentists which state the patient is not responsible for any amount above the maximum plan benefit

Lowering Patient Benefits and Claims Payment Abuse: Intentionally lowering the benefit to the beneficiary and/or lowering the allowable amount to the dentist negating the code for the actual services performed by the dentist. These practices, coupled with contractual clauses that require the dentist to accept the plan payment as payment in full, compound the problem.

Some examples of claims payment abuse include, but are not limited to:

  • Downcoding: using a procedure code different from the one submitted in order to determine a benefit in an amount less than that which would be allowed for the submitted code
  • Bundling of Procedures: the systematic combining of procedures resulting in a reduced benefit for the patient/beneficiary
  • Limiting Benefits for Non-Covered Services: mandating a discounted fee for procedures for which the plan pays no benefit
  • Least Expensive Alternative Treatment Clauses: contractual language that allows a plan to only pay for the least expensive treatment if there is more than one way to treat a condition
  • Most Favored Nation Clauses: contractual language that requires a dentist to give the beneficiaries of a dental plan the same lower fee that the dentist may have charged another patient

Disallowed Clauses: Contractual language that prohibits a dentist from charging a patient for a covered procedure not paid for by the benefit plan.

Some examples of disallowed procedures include, but are not limited to:

  • Direct and indirect pulp caps when provided in conjunction with the final restoration or sedative filling for the same tooth
  • Frequency limitations such as sealants, which are repaired or replaced by the same dentist within two years of initial placement

Using Non-Dentist Personnel for Adjudication of Benefit: A practice where a non-dentist determines the medical necessity for benefit adjudication. Any determination of medical necessity for the purposes of benefit adjudication should only be made by a dentist licensed in the state in which the procedures are being performed.

Restricting Dialogue between Dentists and Patients or Public Agencies: Contractual language that restricts dentists from fulfilling their legal and ethical duties to appropriately discuss with patients, other health care providers, public officials or public agencies, any matter relating to treatment of patients, treatment options, payment policies, grievance procedures, appeal processes, and financial incentives between any health plan and the dentist.

Automatic Assignment of Participating Dentist Agreements: Contractual language which allows PPO leasing companies and third-party payers to obligate the dentist to participate in any other third party payer or managed care network without full disclosure of fees, processing policies and written consent from the dentist. This is typically accomplished by selling or providing the discount rate information to any other third-party payers and/or other managed care networks.

Non-Disclosure of fee schedules and processing policies prior to contracting: Requiring a dentist to evaluate a contract with a carrier without full disclosure of the fee-schedules and processing policies as it applies to all plans administered by the carrier.

Download Comprehensive ADA Policy Statement on Inappropriate or Intrusive Provisions and Practices by Third Party Payers.

2. Explanation of Benefits Statement and Identification of Claims Reviewers (1985:584; 1990:536; 1995:610): The following or similar statement should be included in communications from a third-party payer or other benefits administrator which attempt to explain the reason(s) for a benefit reduction or denial to beneficiaries of a dental benefits plan:

“Any difference between the fee charged and the benefit paid is due to limitations in your dental benefits contract. Please refer to the pertinent provisions of your summary plan description for an explanation of the specific policy provisions, which limited or excluded coverage for the claim submitted.”

3. Explanation of Benefits Statement and Identification of Claims Reviewers (1985:584; 1990:536; 1995:610): The following information should be reported on the EOB, reporting the benefit determination to the beneficiary: a) the treatment reported on the claim by CDT codes as submitted by the dentist; and b) a statement indicating how the submitted procedures were adjudicated.

4. Dental Procedure Code Changes (2001:433): When a third-party payer, or any other entity adjudicating a dental claim, changes the submitted dental procedure code for internal processing purposes, all outgoing transactions, including EOBs, should show the originally submitted dental procedure code to prevent the dentist and the dental plan from having inconsistent records of the treatment rendered.

5. Identifying Dental Consultants (2002:000): The carrier can facilitate the claims process for all involved by providing the name and toll-free telephone number of the individual who is acting on behalf of the carrier in all correspondence between a third-party carrier and the patient regarding the patient’s dental claims. This may include the degree and license number of the licensed dentist or the identification of any other individual who makes the final decision involved in accepting or rejecting the dental claim.

6. All EOBs should include information on whether the dental benefits plan is self-funded or fully insured. This information is necessary so that beneficiaries can distinguish that state insurance laws may apply for fully insured plans and that ERISA laws may apply for self-funded plans.

7. Limitations in Benefits by Dental Insurance Companies (1997:680): Since the term “usual, customary and reasonable” is often misunderstood by patients and tends to raise distrust of the dentist in the patient’s mind by suggesting the dentist’s fees are excessive, the American Dental Association urges third-party payers employing this terminology to substitute the term “maximum plan allowance” in patient communications and EOB statements.

In addition to stating the maximum plan allowance, it is recommended that the following language or similar language can be used to indicate usual, customary and reasonable (UCR) fees have been applied:

“Your plan provides benefits for covered services at the prevailing charge level, as determined by (name of carrier) pursuant to the terms of your contract. (Carrier’s) determination of the prevailing charge does not suggest that your dentist's fee is not reasonable or proper."

8. Statement on Determination of Usual, Customary and Reasonable Fees (1991:633): The legitimate interests of insured patients are best served by use of precise, accurate and publicly announced methodologies for determining ranges of fees for all dental services

9. Carriers should exercise caution when sending EOB statements that mention potential dollar savings from changing dentists to network dentists. These types of messages should be accurately stated and carefully communicated to patients in EOB statements to avoid wrongfully interfering with the doctor-patient relationship.

10. All EOB statements must include an American Dental Association copyright notice for the dental procedure codes published in Current Dental Terminology. Pursuant to the CDT License, all third party payers are required to use one of the copyright notices printed below on all Explanation of Benefits statements:

  • The Code on Dental Procedures and Nomenclature is published in Current Dental Terminology (CDT), Copyright © American Dental Association (ADA). All rights reserved.
  • Current Dental Terminology (CDT) © American Dental Association (ADA). All rights reserved.


Clear and accurate communication between patients, dentists and dental benefit payers is essential to the delivery of oral health care. EOB statements written in this fashion can help to strengthen and support that message.

This publication was developed to assist dentists in understanding the ADA position on Content of Explanation of Benefits (EOB). It is not intended to cover every situation or offer complete advice.

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