Tom Limoli Jr.
A long time ago in a galaxy [dental practice] far, far away, insurance paid for the clinical wants and needs of both the patient and the dentist. Those were happy times. The stock market was booming. The air we breathed was clean. The birds sang ... and yes, gasoline was only 45 cents a gallon.
Benefit plans have changed drastically since then. But why should we worry about these changes in plan design? Isn’t it the patient’s plan?
Yes, it is the patient’s plan. If we are going to file for benefits on behalf of the patient, however, it is our responsibility to do the best that we can. All too often, lack of knowledge on the part of the dental office results in unsecured benefits and unfulfilled expectations on the part of both the patient and the office. If we are going to provide the additional service to our patients of filing for their insurance benefits, we better know how to properly handle the process!
Let’s begin our discussion of basic plan design with some specific examples as they might appear in your individual dental practice. Reflect back to the first time you heard the famous Abbott and Costello skit in which they discussed the strange names of baseball players. Do you remember it? “Who is on first, What is on second.” Primacy coverage can at times be just that confusing.
When faced with a question about primary coverage, remember three simple rules of engagement:
The plan identifying the patient as anything other than a dependent is primary.
The plan without a true coordination of benefit (COB) provision is primary.
The plan with the lowest dollar threshold is primary.
With Rule No. 1, plans covering patients as employees, members, subscribers, beneficiaries, etc., take precedence (or primacy) over plans identifying patients as dependents. When confirming eligibility, you must first determine how the plan identifies the patient. Rarely, if ever, will a nontraditional, managed-care plan be secondary. Nearly all of these alternate funding plans identify patients as either members or subscribers.
Rule No. 2 is easy to determine once you have reviewed the specifics of the patient’s plan. Remember, the rules of the plan are governed by the state in which the plan is bound, not the state in which the dentistry is performed. Even though the patient is sitting in your New York dental office, the patient’s benefit plan may very well follow the rules and laws of the state of Illinois. True coordination of benefits occurs under the protection of individual state law and applies only if each of the plans involved specifically has COB provisions. If any plan is covered under ERISA (which pre-exempts state law) or does not include COB provisions, that plan cannot coordinate benefits with other plans and always will be considered primary.
Rule No. 3 concerning the dollar thresholds is easy to determine. If your son or daughter goes to the toy store and finds two identical items priced differently (one is priced at $7 and the other at $12), which one will the child purchase? The lower-priced item, of course! Now, let’s say you have a contractual arrangement with a nontraditional benefit plan (Delta Dental, the Blues, etc.) and the schedule of benefits calls for crowns to be reimbursed at $500. If your usual fee is $700, $500 is the lower dollar threshold, making it the primary plan. Thus, the patient’s total financial obligation is $500.
These rules of primacy are leading many of your patients’ families to the conclusion that it is no longer financially beneficial for individuals to have multiple benefit plans. The rule of thumb for today and tomorrow is simple: Have only one plan per family! The dental office should accept authorization for payment (assigned benefits) only with the patient’s primary plan.
I recommend you reduce your administrative and cash-flow burden by accepting authorization for payment (assigned benefits) from only the insured’s primary plan. Patients must pay their portion in full prior to or at the time of service. It also is not uncommon to establish a minimum dollar threshold of $75 to $300 for assigned benefits. Your policy might state, “If services rendered during this series of visits are anticipated to exceed $125, we will gladly await the insurance reimbursement, provided all estimated copayments, deductibles, and out-of-pocket costs have been paid in full by the patient.”
Then, file for secondary benefits on behalf of the patient, but do not provide the payer with your Tax ID and/or Social Security number except where you are contractually obligated to do so. Also, do not accept assigned benefits on secondary coverage. Work with only one benefit plan.
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 www.LIMOLI.com.