Mastering the reimbursement process

Nov. 1, 2003
Can a four-unit bridge have multiple billing dates? The answer to this question is quite simple. You bill for procedures on the date that you performed them.

Tom Limoli Jr.

Can a four-unit bridge have multiple billing dates? The answer to this question is quite simple. You bill for procedures on the date that you performed them. A four-unit fixed bridge is a single appliance composed of four individual procedure codes and only one billing date.

In the dark ages of dental reimbursement (during the Nixon and Ford administrations), the benefit claim was sent to the insurance company when the doctor picked up the handpiece and first prepared the tooth for the final impression. This initial "date of incurred liability" was sensitive to the fact that the doctor was committed to the completion of an irreversible procedure. Insurance claims were generated at that time (i.e., when the work was started).

The good old days are gone. May they rest in peace!

The Employment Retirement Income Security Act (ERISA) was signed into law on Labor Day in 1974. With this legislative nightmare came the financial demise of what was then known as indemnity dental insurance. Indemnified plans protected the client (plan purchaser) against loss. In short, indemnity dental plans pay claims with insurance company money and not the direct funds of the employer group. This metamorphosis of benefit-plan design led to the early development of the Administrative Services Only (ASO) contract. This type of employee benefit plan is simply administered by an insurance company (or third-party administrator) and the client (employer) is totally at financial risk for all paid claims. In other words, claims are paid with the direct funds of the employer.

With the employer now holding the purse strings, ASO-type plans dictate that the procedure be complete before liability for reimbursement can be generated.

Billing the patient

The patient is always financially responsible for the total cost of dental treatment. The old days of submitting the claim, waiting on the plan to pay its portion, and later invoicing the patient for any unpaid remaining balance are gone! This old system of financial mismanagement is a sure road to ruin. It may have worked in the old days, but not now. The patient must participate in the cost of care as soon as possible.

If the total fee for the treatment is $900 and you anticipate the patient's out-of-pocket cost to be $600, why would you not want at least some of that $600 in your bank account before the doctor picks up the handpiece? Ask the patient for $200 to secure the confirmed series of appointment dates and times. Get your second

$200 on the preparation date and collect the $200 balance when the patient's treatment is completed. You now have money in the bank to cover your direct expenses, and the check from the benefit plan is gravy for the mashed potatoes.

Now let's look at the limitations of our practice-management software. If prepayments are entered on the patient's financial ledger, we must make sure that these amounts are not entered on behalf of an incomplete procedure. In other words, don't enter the patient's first $200 prepayment under a completed procedure code such as D2750. You do not want to generate a claim at this time. Rather, enter the $200 prepayments as simply a "Payment On Account" or POA. By doing it this way, the patient will have a credit balance on his or her account when the crown is delivered and the claim is actually generated. This system greatly eliminates erroneous accounts receivable and increases cash flow.

Billing the benefit plan

The current claim form has modified the treating dentist's signature block to read as follows:

"I hereby certify that the procedures as indicated by date are in progress (for procedures that require multiple visits), or have been completed, and that the fees submitted are the actual fees I have charged and intend to collect for those procedures."

The problem statement is the phrase "are in progress." As well intended as the terminology change may have been, benefit plans usually do not consider a reimbursable loss to have contractually taken place until the procedure is completed. Completed means "finished." In other words, submit the claim when you are finished with these individual procedures. If our overall objective is to gain financial independence from the patient's benefit plan, then we must do a better job of mastering the reimbursement process.

See you on the road.

Tom Limoli Jr. is the president of Atlanta Dental Consultants and the editor of Dental Insurance Today, a bimonthly publication that addresses third-party reimbursement in the dental office. He also is the author of Dental Insurance and Reimbursement Coding and Claim Submission. He can be contacted by phone at (404) 252-7808. Visit his Web site at

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