Direct reimbursement faces its biggest challenge from within

July 1, 2005
As an advocate and promoter of direct reimbursement dental plans, or DR, I field many questions from dentists about its growth and acceptance by employers.

As an advocate and promoter of direct reimbursement dental plans, or DR, I field many questions from dentists about its growth and acceptance by employers. I explain the progress we’ve made since the campaign started three years ago, and the difficulty in gaining acceptance for a movement with grassroots origins. I convey the continuing challenges I face in getting benefit brokers and consultants to think how such a simple method can provide both more freedom and cost-effectiveness for their clients while they focus on the juggernaut of double-digit health insurance renewals. Quite frankly, the going is often slow and tough.

“How are you promoting direct reimbursement through your practice?” I ask, looking for signs of support. I’m hoping for a response that includes informing patients about the concept, maybe even encouraging front desk personnel to look for opportunities to pass a brochure from a DR display readily at hand on the countertop, or perhaps a lead to a business owner they know who would give me a few minutes on the strength of a personal referral. What I often get is a silent pause.

Most dentists honestly report a lack of effort to actively promote DR. This is common and understandable with the bustle of activities occurring daily in the typical practice. I appreciate the press of other priorities. Occasionally, I’ll get a response that includes, with pride, “We don’t participate in any managed-care plans.” “Admirable” is my response, followed with, “Does that include the traditional plans that reduce your fees by as much as 40 percent and restrict your ability to balance-bill such as the Blues or Delta?” The tone changes. Now a little uneasy, the doctors express a desire not to be contracted with such plans but, alas, feel they must - or lose patients to others.

Welcome to a dental self-fulfilling prophecy. As good as DR is, it will never compete with plans that extract significant discounts from a provider’s fee schedule. The beauty of DR lies in lower administrative cost and freedom of choice. Don’t get me wrong; having patients choose their dentist and preserving the doctor-patient relationship producing a better clinical outcome is a powerful argument. But most business owners need to have it make financial sense as well. They are quite willing to pay more in administrative expense to have it cost less in claims, especially when the increase is far less than the savings extracted on the claims side. Further, the patient is often helped by their decision, as most PAR-type contracts require the dentist to handle the claims filing and forgo recourse when their fees have been reduced.

This is especially true for employers who are already self-funding their claims (as is the case for most employers with more than 100 lives). While DR has experienced growth over the past several years, the rate of growth in PAR, PPO, and discount plans continues to widen the gap as employers who mistakenly jumped into DHMOs reevaluate their options. Moreover, while I’d love to approach the local school system with DR as a smart, consumer-active concept, it’s hard to compete against plans offering wide dental provider panels readily accepting patients under the resignation that they’ll just balance the discounts some other way.

Perhaps my new message to dentists about promoting DR should be to closely review their contracting decisions with a careful evaluation of any arrangement that restricts balance-billing, or, perhaps advocate more strongly that DR patients should receive significant “courtesy” reductions for paying promptly - a practice many dentists still fail to recognize. Either way, the future success of direct reimbursement is less dependent on its promotion by organized dentistry as it is on the actions taken by individual dentists who participate in third-party contracts with highly restrictive provisions whose only true beneficiary is the insurance company.

Remember - help comes to those who help themselves.

Jon S. Frank, CHE, is an employee benefits consultant and licensed administrative services provider. Frank is a member of the Consumer Directed Benefits Association, a national organization promoting direct reimbursement and direct assignment benefit plans. The opinions expressed in this article reflect Frank’s personal opinions, and do not reflect those of any other person, group, or organization. Contact him at [email protected].