The complicated reality of the third-party payer system
Americans who have dental insurance are much more likely to see a dentist1 and take their children in for dental care; they also receive more restorative care and enjoy better overall health.2 The access to care that dental insurance can provide has a clear benefit for patients, but many practitioners are frustrated by a perception that third-party payers are squeezing their practices with reduced reimbursement rates and claim denials.
The economic pressures affecting the profession are certainly complex, but the question remains—how culpable are the policies of dental insurers for flat or declining profits?
Coverage and Participation
Twice as many Americans under 65 lack dental insurance compared to those who are medically uninsured (roughly 67.7 and 32 million, respectively). Nevertheless, some 205 million Americans are currently covered by dental insurance plans—roughly 64% of the US population.3 About three quarters of those plans are private, with the vast majority provided by employers or groups such as the American Association of Retired Persons. The rest receive their coverage from public programs such as Medicaid.
Approximately 100 dental insurance providers currently operate within the United States, 82 of which are members of the National Association of Dental Plans (NADP), according to NADP Executive Director Evelyn Ireland. Since 2000, the NADP has conducted an annual survey in an effort to better understand the scope of dentist participation in provider networks. Ireland says analysis of the most recent (2014) report data showed that more than 95% of professionally active dentists were participating in at least one network.
The NADP data also showed that almost 80% of the dental plans in the market already are preferred provider organizations (PPOs), with more than 193,000 American dentists (an estimated 96% of those who are actively practicing) participating in at least one, with the average dentist accepting 5.7 PPO networks.
Despite high rates of participation, some industry observers and practitioners believe that reimbursement rates have declined—with deleterious consequences for practice profitability. “Insurance rates have definitely dropped throughout the country,” states practice management expert Roger P. Levin, DDS, chairman and CEO of Levin Group, Inc. Levin says that based on daily interaction with practices, it seems many dental insurers have reduced their reimbursements to PPO levels. “We believe that eventually all insurance reimbursement will be at a PPO level. They won’t all be in PPOs, but they will be at a PPO level.”
Robert Margeas, DDS, expresses guarded contentment when asked about his experiences with dental insurance. His Iowa Dental Group, based in Des Moines, Iowa, focuses on comprehensive restorative and implant dentistry and currently accepts benefits from two insurers (Wellmark Blue and Delta Dental). “I’m somewhat happy with the reimbursements,” Margeas says. “It’s not like the medical field where they’re writing off 40% and 50%.”
Still, he points out some limitations. “I can’t always use the highest quality laboratory for maximum esthetics because my reimbursement is not high enough,” he explains. Or sometimes there are problems with claim denials, such as when insurers won’t pay for a crown for a cracked tooth because a crack does not show on the x-ray. “Often getting reimbursed comes down to writing a good narrative for the claim and asking a consultant to review it,” he says. “That’s an extra step for the dentist, but it’s one way to get paid.”
Claims related to cone-beam computed tomography (CBCT) can also be frustrating, he attests. “It’s not common to be reimbursed, even though it’s something that is very useful. But a lot of times the patient has to be willing to pay out of pocket to have that extra care.”
Dental consultant and speaker Christine Taxin says CBCT scans are in fact reimbursable, but it means getting your office on board with medical billing (see sidebar). An important first step toward billing medical for CBCT is getting your unit registered with your state, she notes. Each state has different regulations, but the legwork is worth it not only for billing, but also for the prestige accreditation offers the practice. Once accreditation is achieved, dentists can bill for different aspects of the CBCT workflow, including taking the scan, reading it, or sending it out to be read by a radiologist. There is even a code for reading a scan performed elsewhere, Taxin says.
Another reimbursement problem that factors into practice profitability is the overhead faced by offices. “When you look at the amount of money it takes to clean an operatory, between the OSHA standards and the employees, it’s about $70 just to clean the room and get it ready for the next patient. But reimbursement may be only $36 for a cleaning. When patients are coming in and only wanting what insurance covers, and they have a very small co-payment, the dentist has lost money by cleaning that patient in that chair. You can only do that so many times a day.”
Indeed, Levin deems declining insurance rates to be a key factor affecting the business of dentistry today. “It’s a game changer because it lowers practice production. The only way to offset that is with higher volume,” he says.
Levin argues that most dentists today should be concentrating on converting their practices into extremely well run businesses, something most do not learn in dental school. “It’s a matter of overhauling the practice with excellent systems to maximize efficiency. By putting in highly efficient systems, dentists can see a higher volume very comfortably, efficiently, and with low stress to compensate for the lower insurance reimbursements.”