Dental Insurance Plans

Dental Insurance Plans. How To Calculate Your Payments

Calculating Payments
A clear understanding of the methods used to calculate benefits and payments will allow you to compare and evaluate the purchasing power of different plans. The following are four common payment schedules:

Capitation (per capita). This fee schedule is used by plans structured to provide a predefined level of benefits. Because dental care needs vary by individual, it is critical to have a thorough understanding of the level or range of services "defined" or covered by the plan. Under this fee schedule, the patient is responsible to pay for treatment not covered within the scope of the plan. In some cases, the allocated payment a dentist receives from the benefits plan, including patient co-payments, is less than the actual cost of providing care. Patients often settle for less-than-optimal treatment alternatives or postpone necessary services when their co-payments do not cover all possible options.
Table or Schedule of Allowances. Plans using this form of benefits calculation establish a maximum dollar limit for each covered procedure, regardless of the fee charged by the dentist. If you select a plan that uses this type of table or schedule, ask how often the table is adjusted for inflation or for changes in accepted dental procedures. In these plans, the difference between the allowed charge and the dentist's fee is paid directly by the patient.
Patients should understand that contracted fee reductions listed in some plan allowance schedules can significantly diminish the level and quality of care delivered. Contracted rates are based on the size of the patient population and projections of the amount and type of treatment performed within a given time frame. Since cost control drives this payment approach, your ability to choose your dentist or see a specialist may be limited.

Direct Reimbursement. In this self-funded plan, the patient pays the doctor for services. The employer or plan sponsor reimburses the employee for a predetermined percentage of all costs. Under this fee schedule, the employee has an incentive to work with the dentist to plan healthy and economical solutions.
Usual, Customary and Reasonable (UCR). Most indemnity (traditional fee-for-service) plans use this payment schedule. It allows patients to select their own dentist. The UCR schedule pays benefits based on a fixed percentage of the lesser of the dentist's fee or the fee determined by the insurance carrier to be "usual," "customary" or "reasonable" for the service in the community in which the service was delivered. Wide fluctuations in UC fees between communities have made this payment system highly controversial. Because many insurance carriers set the UCR percentage too low in comparison to the area's usual professional fees, patients may wind up paying more out-of-pocket. Most payments are made directly to the dentist, but in some instances they are made to the beneficiary.

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