Understanding Dental Insurance Phoenix - Myths and Misconceptions of...

Any type of insurance is confusing and complex. Dental insurance is no exception and can be even more confusing in many instances. Most people are now aware of the oral health-overall health connection so it would seem that dental insurance would be much like medical insurance. We expect that when we have dental insurance it will cover much of the cost of any necessary dental treatment just like medical insurance should cover necessary medical treatment. However, this is far from the truth. In fact, most dental insurance plans cover very little of the overall cost of dental treatment. It may often cover a large part of preventative services, but restorative services are another matter and cosmetic services are almost never covered. So with the growing understanding of how important your oral health is to keeping you healthy overall, dental insurance practices have a long way to go to catch up to the research.

There are 3 types of insurance plans available-

DHMO or HMO’s are the same type of plan with different names. They are dental maintenance organizations and they work off of something called capitation. We will look at this in more detail later. The dentist is under contract with the insurance company and you must use one of these dentists.
PPO is a preferred provider organization and dentists enter into a contract with the insurance company to be a preferred provider. This plan allows you to choose either a preferred provider, otherwise referred to as staying “in-network”, or you may choose to see an “out-of-network” provider.
Indemnity plans offer insurance coverage with any dentist and there are no contracts between the two parties. You may choose to see any licensed dentist.

Let’s take a look at what each of these different plans really mean to you as a patient.

DHMO or HMO’s

These initials are different names for the same type of plan. With this plan, the dentist contracts with the insurance company and receives capitation, or payment, for each patient. So if you have “ABC DHMO” as your dental insurance, you are forced to choose a provider from a list you receive from them. Once you have made your choice, that dentist begins receiving a monthly payment for you being one of his or her patients. The dentist receives the same monthly payment whether you are seen or not and whether you are treated or not. If you do go for an appointment, you may have to pay a small co-payment depending on what services you receive. You likely pay nothing additionally for preventative services like cleanings or basic fillings, but may pay a small amount for deep cleanings or crowns for example. The way this plan is designed makes it very difficult for a dental office to make a profit if they see all the patients they are assigned. They make a profit when they either do not see a patient at all, yet continue to receive their monthly payment, when they “watch” conditions until they progress to a more serious problem that requires higher co-payments, or worst of all, when they provide unnecessary treatment to collect the co-pay. A proactive approach to dentistry and preventative services cost them money.

PPO

This type of insurance allows you to choose treatment from any licensed dentist whether or not that dentist has a contract with your insurance company. Your insurance benefits may be calculated differently depending on whether or not the dentist you choose is under contract with your insurance company to be a “preferred provider”. A preferred provider is a dentist who has agreed to accept the fee schedule that the insurance company has created and will write off any difference that may exist between his or her dental fee schedule rather than charge the patient the difference. A dentist can choose to be a participating provider for multiple insurance companies if they determine the fee schedule that is offered is agreeable. In Arizona, Delta Dental offers to pay the dentist a higher percentage if he or she chooses to be an exclusive provider and agrees not to contract with any other insurance companies.

If you have a PPO plan, your other option is to choose to see a dentist that is “out of network”. This term means that the dentist does not have a contract with your insurance company and is not obligated to write off the difference between his or her fee schedule and the amount the insurance company allows the dentist to charge for the procedure. The patient is responsible for this difference if one exists. You have every right to choose either an in-network or an out-of- network provider.

Most dental offices will bill your insurance company for you regardless of which type of provider they are although insurance companies will strongly encourage you to only utilize in-network providers. Many insurance companies pay a higher percentage of an allowed fee to out-of-network providers and most fees charged by the dentist are within their allowable amounts. This results in the insurance company paying more to out-of-network providers than they would have if the same treatment was provided by an in-network dentist. So often times, a patient will receive an explanation of benefits from their insurance company that states “you would have saved money by using an in-network provider”. Although this can be true if the fee is higher than the allowed amount, this is often a false statement. In reality, it usually is the insurance company that would have saved money and the patient pays the same or less than they would have with an in-network provider.

Indemnity (Non-Contracted/Fee for Service Insurance)

This term applies when a doctor does not have a contract with an insurance company, but does accept payment from them. You have the freedom to choose any dentist and that dentist can charge any reasonable fee. The dental office will submit your claim to your insurance company for you and you pay any amount that is not covered by insurance. This is just like choosing an out-of-network provider if you have PPO insurance.

The Employer’s Role

To make matters more confusing, employers negotiate contracts with the insurance companies when creating their benefits packages. The employer can determine the maximum coverage amount per year and is able to design a plan with lower allowable amounts than industry standards. When an employer chooses to purchase a plan with allowable fees that are less than is usual and customary, the plan costs the employer less in premiums. However, this often results in a higher out of pocket cost for the patient. Most employers cap their benefits at $1000-$2000 per year.

Calculating Coverage

It is impossible for any dental office to be able to predict exactly what every patient’s insurance company will cover for every procedure. We certainly strive to come as close as possible, but with so many variables involved, it is nearly impossible. If there is time to submit a pre-determination request to your insurance company, we can get a better estimate of coverage, but it still is not guaranteed that the insurance company will honor their estimate of your benefit coverage. Additionally, it can take 2-4 weeks to hear back from the insurance company once the paperwork is submitted. Some procedures cannot wait that long. We will always give you our very best estimate regarding your expected out of pocket costs while factoring in your insurance coverage, but this is only an estimate. Understanding insurance coverage is ultimately each patient’s responsibility and the patient can often get more detailed information about coverage than we can. Dental history is also critical to determining benefits since many procedures have limitations regarding frequency. We may not have detailed information regarding your dental history if you have ever been to another dentist.

Working On Your Team

We are happy to work with you to answer questions and assist in helping patients understand what information they need from their insurance company. We ask that you help us by providing as much detailed information as is necessary. We also ask for your understanding that we will not ever have all the answers on every insurance plan. Our goal is to work with you to ensure you maximize the benefits you have to receive any care you may need. Give us a call today if you have any insurance questions.

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