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Dental insurance confusion and inequity

June 7, 2022
Most dentists agree that dental insurance is one of the largest sources of frustration in managing their practices and patients. It occupies more time and energy than anyone would like it to.

Most dentists agree that dental insurance has created better access to care during the last 40 years. They might also agree that dental insurance is one of their largest sources of frustration in managing their practices and patients. With close to 40 years of experience as a private practicing dentist and having spent many of those years in leadership positions in organized dentistry, I admit that the confusion and inequity perpetrated by the insurance industry has occupied more of my time and energy than I’d ever thought possible.

The confusion begins with the misunderstanding that dental insurance is needed to achieve good oral health, when in reality consumers are buying insurance products that are nothing more than reimbursement plans. These plans have maximum amounts they’ll pay for care that hasn’t changed in more than 35 years, and for this reason the plans don’t reimburse enough to offset the current cost of dental care. 

Lack of transparency

The array of dental plans available with varying designs, degrees of plan provisions, and restrictions, coupled with the lack of transparency, adds to the frustration. Why should so much of a dentist’s time and energy focus on educating patients about their dental insurance rather than on their oral health-care needs? As the American Dental Association looks at dental insurance reform, addressing this lack of transparency is crucial to enhancing the doctor-patient relationship. 

The lack of transparency is best demonstrated in the bifurcated insurance system that exists. Is a plan self-insured or fully insured? Do the plan provisions follow state guidelines or federal guidelines? Patients certainly don’t know, and my experience in dental benefits and government affairs has demonstrated that most dentists don’t know either.

Self-insured vs. fully insured

The issue of self-insured versus fully insured leads to another frustration. Can a patient assign benefits to the dentist and if so, how will that benefit be paid? Fortunately, almost half of the states have provisions in the law that allow for assignment of benefits regardless of the dentist’s network affiliation, thanks to the efforts of political action and government affairs at the state associations. However, that may not be the case for self-funded plans, which are how most large employers manage their benefits. 

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Assuming state law allows for assignment of benefits, is the benefit paid with a check, electronic fund transfer, or a credit card? Accepting so called “virtual” credit card payments from a carrier results in a fee to the dentist and savings to the carrier. Once again, through the efforts of effective government affairs advocacy, some states have prevented carriers from limiting claim payments to only virtual credit cards. Dentists now have options on payment methods.

Nonduplication of benefits

When we talk about inequity and lack of fairness, I think of the nonduplication of benefits clause found in many dental plans. There are many confusing aspects of dental insurance. For many, coordination of benefits (COB) is at the top of that list. When I was chairperson of the New Jersey Dental Association’s Council on Dental Benefits, I gave a one-hour lecture on COB. By the time I was done, even I was still confused.

Patients are led to believe that by paying two premiums and having two dental plans they’re entitled to the full benefits of each plan. Sometimes they are, but in most cases they are not. This one-plan provision has led to more confusion and misunderstanding with patients than probably any other provision. Patients should be made aware of plan provisions prior to purchasing a plan and should be entitled to their full benefit following reasonable and fair coordination of benefits. Carriers claim that nonduplication clauses prevent the insured from being enriched by the plan when in reality this provision adds to the carrier’s cost saving and profitability. 

Leasing of networks 

A recent challenge that dentists who participate with dental plans have faced in the past few years is dental insurers selling or leasing their networks. More than 35 years ago, I became a participating provider for a discount insurance plan that after two years yielded very few patients. Due to lack of activity, I assumed the plan had ceased to exist. Two years ago, I was informed by patients who work for the New Jersey state government that I was now in their network, despite my office never being involved with the state plan or any of the carriers they had contracted with.

To my dismay, after investigating, I found that the carrier that had the New Jersey state contract had purchased the network from the company that I assumed no longer existed. Subsequently, it took me three months and thousands of dollars to get out of a contract that I didn’t know even remained in effect. It interfered with my patients’ relationship, which took months to repair. I had to initiate a marketing campaign to correct the miscommunication and misunderstanding that the insurer had created for my patients. Since leased network legislation passed in New Jersey, this won’t happen again. Carriers are required to provide adequate notice and provide the dentist with the ability to opt out of the network lease offer and do so without impacting the original contractual relationship.

Dental insurance reform

As chairperson of the ADA Council on Government Affairs, I realize how many dentists are working at the state and federal level to effect dental insurance reform. Each of the successes has led to a decrease in confusion and inequity in dental insurance. A prime example is noncovered services.

The current dental insurance landscape is unfair to both providers and patients. Dentists, their patients, and the public at large are at a disadvantage from the negative impact noncovered service provisions have on competition among entities in the health insurance industry. Imposing discounts on providers for services an insurance company doesn’t cover is a marketing ploy designed to gain a competitive advantage over small carriers. It also acts to hinder the doctor-patient relationship and may shift costs to the uninsured.

At the federal level, the ADA has been advocating for the Dentist and Optometric Care Access Act. This will prevent insurers from holding dentists to fees for services they don’t cover, and from providing unreasonably minimal compensation for services rendered. The ADA has been lobbying this bill for more than two years. While this legislation would affect self-insured plans, the state’s dental associations have been working on legislation to affect fully insured plans. To date more than 40 states have enacted legislation that prevents carriers from dictating fees for noncovered services. If the noncovered services campaign was a constitutional amendment, it would have been ratified by now.

Confusion from coding 

Speaking of confusion and inequity, one cannot forget about downcoding, bundling, and disallowed services. Downcoding and bundling create tremendous confusion for patients and may create lack of trust in their dentist. When a carrier downcodes (substitutes a fee for a lower cost service) or bundles (combines services with separate fees into one fee), patients perceive that the dentist or office staff did something wrong. 

“Disallowing” dental treatments is questionable because the plans do not use diagnostic and patient preference information the doctor used to make the treatment recommendation to conclude their disallowance/denial. These are unfair business practices by the dental payer industry whose goal appears to be reduced claims cost rather than optimal patient outcome. The business financial goals set forth by the insurance carriers interfere with the patient’s access to appropriate and necessary care, and it’s unfair to the beneficiary and the benefit purchaser. We could argue that it borders on unethical business practice.

One way to minimize confusion and inequity in a dental practice is to implement an in-office membership and loyalty plan for patients. This has been especially appreciated by those patients who assumed they need insurance to visit the dentist. These plans also offer an effective way to assist patients who want to stay with a practice despite financial hardships.

The dental insurance maze can be daunting for patients, dentists, and dental team members. The best way to minimize confusion and inequity is for dentists to educate themselves so they can educate team members and patients. Dentists taking an active role in organized dentistry and advocating for insurance reform is key to reducing confusion and inequity. 

The ADA has a program called the Third-Party Concierge that helps dentists with their concerns regarding dental insurance companies. ADA members can call or email a designated expert for insurance-related questions and concerns. Check out the ADA online hub for the latest dental insurance information to help you understand the nuances of doing business with dental insurance companies.

Editor's note: This article appeared in the June 2022 print edition of Dental Economics magazine. Dentists in North America are eligible for a complimentary print subscription. Sign up here.

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