Dental Insurance – Part 1
Do you take or accept my dental insurance? Dr. Sung, I don’t see you in my network. Can I still come to you? Why do you charge more than the in-network dentist?
I’ve been treating patients for over 10 years now, and I can confidently say I know a thing or two about doing fillings and crowns. But when it comes to dental insurance matters, things can get very complicated and sometimes it is difficult to explain what we know to patients. I had written this blog already, but decided to rewrite in FAQ format for ease of reading.
1. What is “In-Network” and “Out-Of-Network”?
When a dental provider is contracted with the specific dental insurance plan to accept negotiated, discounted dental service fee, which is typically a lot lower than the usual, customary and reasonable dental fee (UCR), the provider is said to be in-network.
An out-of-network provider is not contracted with any plans and also is not dictated by administrative policies set by insurance companies. While patients may have to pay higher coinsurance, as long as patients are covered by a PPO plan (Preferred Provider Option), patients are allowed to choose any providers both in and outside of the network.
2. What is the difference between PPO and HMO?
The acronym, PPO, stands for Preferred Provider Option/Organization. Dental PPO plans are the most popular insurance option with fewer limitations and offer better service than HMO plans. Patients with PPO plans are still responsible for their annual deductible and copays. Patients are free to choose any dentist and/or dental specialists.
HMO (Health Maintenance Organization) plans are much cheaper than PPO plans, but patients are assigned (roster) to a specific provider/primary dentist. The insurance will not reimburse if patients see a provider who is not in their approved provider list. Referrals by a primary dentist are a must to be seen by dental specialists.
3. Why does it cost more to see an out-of-network dentist?
I will give you an example here. Let’s say you go to a dentist who is in-network to get a filling done, and assume the regular fee for the two surface composite resin filling is $240. The negotiated, lower rate is $180. Your plan covers 80% of $180 which is $144. This is the amount paid to the provider. You as a patient pay the difference to the doctor, which is $36. Your in-network provider has to write off $60 ($240-$180).
Now let’s say you go to an out-of-network dentist. No discount is applied since the doctor is not contracted. The insurance will pay 80% of their allowed fee for the service, which could vary by plans, but let’s say the maximum they will pay is $144 (this is what they will pay to the in-network provider in above example). You will be responsible for $96 ($240-$144). Some great plans will pay 80% of $240 while some inferior plans like the one in this example will set their allowed fee very low. Also, most insurance plans will downgrade the composite resin filling (a little more expensive) to an amalgam filling (cheaper) to lower the reimbursement rate.
4. Am I really saving money by seeing an in-network dental provider?
It will depend on many factors, but from the financial point of view, you may save money by seeing an in-network provider. At the same time, that same doctor is losing money by being contracted to accept a negotiated fee. It’s a simple mathematics that such loss has to be made up somewhere. Offices that accept many PPO plans compensate the lost profit by doing volume dentistry. Schedules are often double or triple booked with less than adequate treatment time assigned.
There are many ethical dentists while there are many who aren’t. To answer the question, as long as you trust your dental provider and the provider is ethical in diagnosing and treating, yes you are saving money. This is true regardless of insurance participation. I’ve seen some great, ethical dentists who participate in all PPO plans. Also, I’ve seen some horrible out-of-network dentists who have the worst chair-side manner and pump out unethical dentistry. The bottom line is that you need to stick with the dentist who you trust and who treats you like a family member.
5. How do DSOs work?
The volume dentistry is typically employed in corporate dental settings and even some private practices that heavily rely on PPO insurance plans. There are many DSO (dental support organization) supported dental practices that appear as privately owned dental offices, and you can’t even tell the difference by their names. These investor-owned practices promise to provide dentistry at a fraction of the cost, and in return, unethical billings and over-diagnosing by debt-burdened, young graduates have become major issues. Due to ever increasing dental school tuition fees and competitive dental business market, many dentists including recent graduates and even seasoned providers no longer consider practice ownership as an option. DSOs are backed by investors and can provide a great facility with all the latest bells and whistles. No management headache! No HR issues! No business loans! No need to worry about marketing! Dentists are guaranteed minimum salary and do what they like doing the most, CLINICAL DENTISTRY! This makes DSOs to expand, acquire and merge multiple dental practices throughout the nation.
In my next blog, I will talk more about how my office is different and what makes it stand out in this competitive market.