My Insurance Company Says You Charge Too Much!

A top-notch office manager once told me that it requires a schizophrenic octopus to work the front desk of a dental office. While many office managers laugh heartily at this thought, none seem offended. The person at the front desk is the very heart of the dental practice. Everything funnels through this area, yet frequently one person is responsible for the telephone, making financial arrangements, doing the insurance billing, attempting recall, scheduling, answering the other telephone line an

Jan 1st, 1997

Del Webb, DDS

A top-notch office manager once told me that it requires a schizophrenic octopus to work the front desk of a dental office. While many office managers laugh heartily at this thought, none seem offended. The person at the front desk is the very heart of the dental practice. Everything funnels through this area, yet frequently one person is responsible for the telephone, making financial arrangements, doing the insurance billing, attempting recall, scheduling, answering the other telephone line and greeting the new patient with a smile and obvious warmth and concern. The total task often is overwhelming! Amazingly, many very dedicated people perform this service day after day.

One of the most negative elements of the front-desk person`s day centers around the patient`s perception of what the insurance company will pay and the fees of the dental office. It is all too common to hear the patient on the other end of the telephone say, "I just received a letter from my insurance company that says your doctor charges too much."

The problem in answering this complaint is that, often, the person at the front desk (or the doctor) may not know how the insurance company derives its UCR-usual, customary and reasonable reimbursement amount. Many think that the UCR quoted by the insurance company is the normal or average fee charged by dental offices in that zip code. Categorically, it is not! In very few cases is the UCR even reasonable.

Stress results when those responsible for answering the dreaded patient complaint do not really know enough about insurance reimbursement and dental fees. Stress of this type is negative. Most people are motivated by a chance to reduce pain or increase pleasure. When patients complain about fees that they have been told are above the amount reimbursable to the patient by the insurance company, the person at the front desk seeks relief. Too often, the simplest way to end the pain is to reduce the fee so that it is less than or equal to the UCR. This spells financial disaster for the dental office.

In addition to misconceptions about the UCR, there is an intimately-related and often inseparable misconception that a dental office must charge all patients the same fee for each procedure. It is neither illegal, immoral, unethical nor fraudulent to charge different people a different fee for the same treatment code, so long as the reason for the fee is based upon the care, skill and judgment employed to provide the service. Of course, you cannot charge insured patients more than noninsured patients, solely on the basis of whether or not they have insurance. That would discriminate against the insurance industry. However, you can have a variable fee structure.

Dr. L. D. Pankey taught us that "A fair fee is that fee which the patient is willing to pay without losing his gratitude and the doctor is willing to receive without losing his gratitude."

The many Delta Dental plans are the most common plans throughout the country. Delta Dental is structured as a service corporation. Technically, it is not an insurance company. The legal and practical reasons for this become crystal clear if you take a few moments to ponder the potential benefits to the corporation.

If you become a preferred provider by signing a contract, then you are subject to the restrictions and requirements of that contract. In most states, the contract mandates that you charge the patients covered by Delta the lowest fee of any fees charged to your patients. This helps Delta market their product, since they can report to employers that enrolled dentists have agreed to charge these patients the lowest fee of all their fees. This could be detrimental to the financial health of your practice.

Consider the impact of the common misconception that you must charge all patients your contracted Delta fees. Millions of dollars of potential revenue have been lost by dental offices, simply because they did not know that Delta does not require this. In fact, Delta gains a marketing advantage if you do charge your non-Delta patients more.

The idea of an "annual maximum" reimbursement completes this thought triad. Consider the insurance industry`s annual maximum allowance, which is spelled out in most dental plans. The average annual maximum reimbursement is $1,000. While not all dentists have raised their fees adequately, all have raised their fees to some extent in the past 20 years. Yet, the annual maximum has remained constant. This means that the purchasing power has dropped significantly. What about premium increases? One recent survey puts the typical annual dental-insurance payment at $447 a year. Many employees are dropping dental coverage, because the return on investment is so limited.

You have probably seen this bumper sticker: "If you think education is expensive, try ignorance." Ignorance is about not knowing; it is not about an individual`s intelligence nor is it about the ability to learn. Or, how about this quote: "If you don`t know, and you don`t know that you don`t know, you can`t change. When you find out or admit that you don`t know, then you can change." Or, perhaps, you can relate to this definition of insanity: "To continue with the same behavior, while expecting different results."

The insurance industry limits its reimbursement by maintaining UCR allowances and annual maximum allowances that are completely inappropriate for today`s costs of providing dental care. They have the gall to tell our patients that "the doctor is charging too much." Many insurance executives have dental degrees. They know that fees and allowances are below cost in many instances. They also know that some dentists continue to sign on the dotted line. The insurance industry has a duty to remain profitable. It cannot be criticized for increasing profits for the company and its shareholders. Dentists can be criticized for joining without knowing the financial impact that enrollment has on their individual practices.

You must know more abut UCR. You must know that it is not based upon what your neighbors are charging. It is not the amount the Almighty would have you charge. UCR is not based upon the dentist`s calculation of cost plus profit. In most cases, it is not reasonable. You must know enough about UCR to communicate with your patients, if thriving in dentistry is one of your goals.

You must understand that you may charge a variable fee for a given ADA code. You are providing a service, not selling a commodity. If you think of it in this way, the idea of a variable fee is obvious. The fee necessarily would be variable, since the care, skill, judgment and time would be variable. If you think in terms of services, it is natural to think of variable fees.

You must become conversant with the fact that the annual maximum insurance reimbursement has remained at $1,000 for two decades or more. With increased premium amounts and diminished purchasing power in return, dental insurance has become nearly a joke. The negative impact of this reduction must be factored into your fees and your case presentations. You must think differently in order to act differently.

Applied information can save you thousands of squandered dollars. Ignorance (not knowing) can cost your office thousands of dollars. It is time to get involved. What you don`t know can hurt you! Which of your fees are profitable, based upon care, skill, judgment and time? If your answer is that you don`t know, then do something, today! The "other guys" are not worried about your profitability. Hoping "they" will do it is financial suicide. What does UCR have to do with your profit? Is it possible that any of your fees are less than the UCR? If so, isn`t that insanity squared?

Another version of Pankey`s fair fee is "A fair fee is that fee which the patient is willing to pay without losing his gratitude and which allows the doctor to do his finest dentistry." What does UCR have to do with that definition? Nothing! Nothing short of insurrection will do! This is your profession-contribute by not succumbing. No more dental casualties. No more uninformed or undertrained, schizophrenic octopi. Let`s restore the profession to what it once was. Not to decide is to decide. If not today, when? If not you, then who?

The author practices in St. George, UT, and is a noted consultant and lecturer on dental insurance, case acceptance and profitability.

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