Third Party Issue Tracker

Navigating your way through dental benefits

Owning a dental practice involves a wide variety of responsibilities and accountabilities, but one of the more challenging aspects of running an office is understanding the complicated world of dental benefits. With so many patients using employee benefit plans, it’s imperative that you know the basics of properly coding for your services and what to do if the claim gets rejected by the insurance company.

Below is a list of important dental benefits terms followed by a brief summary. You may also download the following document with more detailed information, including how to proceed if you encounter denial or delay problems, as well as ADA policy related to many of the terms.

Third-party Payer Terms You Should Know

1. Assignment of benefits

A procedure where a beneficiary/patient authorizes the administrator of the program to forward payment for a covered procedure directly to the treating dentist. Some carriers consider assignment of benefits as a perk of being a participating dentist with the plan and will not honor assignment to non-participating dentists. The patient’s signed request is ignored and the patient is paid directly. This can create problems for dental offices if they base their payment policy on the legitimate expectation raised by the assignment and do not collect payment at the time of service.

2. Bundling of procedures

Claims bundling is the systematic combining of distinct dental procedures by third-party payers that results in a reduced benefit for the patient/beneficiary.

One of the most common examples of bundling issues pertains to radiographs. For example, a panoramic image and bitewings may be combined and a benefit is provided for a full mouth series (FMX), which then subjects the claim to dental benefit plan frequency limitations (many plans will only pay for one full mouth series of radiographs in a five-year period). Usually, the number or type of radiographs taken would not constitute a full mouth series.

Another example is when a dentist has placed a two-surface restoration e.g., mesial, occlusal (MO) and a single surface restoration e.g., buccal (B) on the same tooth on the same date of service; the insurance company may provide a benefit for a three-surface restoration (MOB).

The amount you can bill the patient depends on whether or not you have signed a participating provider agreement with the insurance carrier. The explanation of benefits (EOB) statement should specify the patient responsibility.

3. Changed codes

It is not uncommon for third party payers to change submitted dental procedure codes based on the plan’s processing policies and adjudication procedures. You should submit the procedure code that most accurately describes the procedure performed. The payer must accept that code into the system, but then the plan may adjudicate the claim based on its plan design and processing policies, which may result in a payment based on a different code than what was submitted.

4. Coordination of benefits

Coordination of benefits (COB) is a method of integrating benefits payable for the same patient under more than one plan. Benefits from all sources should not exceed 100% of the total charges.

Coordination of benefits takes place when a patient is entitled to benefits from more than one dental plan. The plans will coordinate the benefits to eliminate over insurance or duplication of benefits. When both plans have COB provisions, the plan in which the patient is enrolled as an employee or as the main policyholder is primary. The plan in which the patient is enrolled as a dependent would be secondary.

In addition, state laws and regulations often mandate coordination of benefits. Plan sponsors should be certain that the plan they select specifies its method for coordinating benefits with other plans.

See the downloadable handout at the end of this article for further discussion of the types of coordination of benefits available, as well as an overview of payment policies when two plans are involved.

5. Delayed claim payments

Delayed claim payments and requests for additional information are two of the most common complaints that the ADA receives from dental offices regarding insurance carriers. Claim payments are vital to the income stream for many dental offices, and when prompt payment is not received, dentists may have trouble paying staff and other administrative expenses.

There are 46 states that have passed prompt-payment legislation; however, those laws apply only to "clean claims," or claims submitted without any missing or incorrect information. Even though the dental office may have submitted a properly completed claim form, what is there to stop the payer from returning the claim form indicating it needs more information? This can be costly and time consuming for a dental office. In addition, this can delay the payment of the claim past the prompt payment law’s time requirements for payment and may impact the dentist-patient relationship. Benefit plans are expected to increase requirements for treatment justification, which may include diagnostic codes and reasons for deviating from accepted guidelines.

6. Downcoding

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.

A common example of downcoding is when a payer changes the code for a posterior composite restoration to an amalgam restoration. When a third-party payer downcodes a procedure, it may be understood by the patient that the payer is making a determination that a lower level of care was needed or should have been provided, but it really is that the benefit pays for a lower level of service with no judgment made about the level of service provided. Dentists feel that they, and not the insurance company, should make the determination of the level of care necessary for the treatment of their patients. Unless the business reason for the payer decision is explained, this may wrongfully interfere with the dentist-patient relationship.

The amount you can bill the patient depends on whether or not you have signed a participating provider agreement with the insurance carrier. The explanation of benefits (EOB) statement should specify the patient responsibility.

7. Least Expensive Alternative Treatment (LEAT) clauses

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 and patient agree that a particular treatment is in the patient’s best interest.

The dentist may recommend a fixed bridge, but the plan may allow reimbursement only for a removable partial denture. The benefit plan will allow the more expensive procedure, but will only provide a benefit for the less expensive treatment. 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 is received. In some cases, this provision in the benefit policy may cause the patient to select a less than optimal treatment due to cost.

8. Non-covered services

Twenty-nine states now have laws that prohibit dental plans from controlling what a dentist may charge for services that dental benefit plans do not cover. Provisions in the laws differ depending on the state and some are stronger than others. A noted trend among insurance companies has been to offer a capped fee plan in states that already have non-covered services laws.

The ADA’s legal and state government affairs divisions have developed legislative strategies and passed them on to state dental societies so each state doesn’t have to reinvent the wheel. As a result, the states save money because the legislation is pre-packaged and adjusted to suit their local issues.

The ADA legislatively opposes the practice of capping fees on non-covered services. The ADA opposes any third-party contract provisions that establish fee limits for non-covered services, according to ADA policy passed by the House of Delegates.

Under a plan that caps fees on non-covered services, participating dentists may charge no more than the dental plan’s set fees for services the plan does not cover. In addition to the basic unfairness of this practice it may, and probably will, mean that dentists will lose money when they provide some of the non-covered services subject to the fee cap.

In states with non-covered service laws, the only fees a dental plan may cap are fees for services the plans cover. At least one dental plan has shifted previously non-covered services over to the “covered services” category by reimbursing them at a very low rate (e.g., 5 percent of the allowed amount).

In doing so, the plan is in a position to cap these fees because the services are now technically covered. Some state laws mitigate such activity — called de minimis reimbursement — by requiring reimbursements to be at or above 50 percent in order to fit the definition of a covered service.

9. Predetermination

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 deductible
  • 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 dollar amount. Predetermination is not a guarantee of benefits. For example, predetermination does not consider any coordination of benefits.

10. Utilization review

Statistically based utilization review is defined by the ADA as a system that examines the distribution of treatment procedures based on claims information and in order to be reasonably reliable, the application of such claims analyses of specific dentists should include data on type of practice, dentist’s experience, socioeconomic characteristics and geographic location.

It is not uncommon for dentists to be placed on post-utilization reviews, also called retrospective claim audits, by insurance carriers based on reporting of certain procedures to the carriers. Typically, these audits begin with the carrier internally monitoring use of the dentist's claims and usually the dentist is unaware of this.

If the carrier determines that the dentist has a practice of reporting certain procedures at a much higher frequency than his or her peers, the carrier may flag the dentist in its claims adjudication system. When this happens claims for those procedures are reviewed internally by claims staff.

At this point, dentists may have to submit a substantial amount of additional documentation regarding the necessity of the procedure in order to get the claim paid. For example, if the carrier suspects that the dentist is submitting a disproportionate number of crowns, the carrier may ask for radiographs, photographs and a narrative description of the need for the crown.

If you are not an ADA member, you can purchase this whitepaper in the ADA Store.