Why We Can't Know Value of Dentistry

Dental practices don't submit claims to insurers based on actual, normal fees -- for a reason that makes little sense.

No one really knows the true value of dentistry. The reason is the widely used practice of submitting claims to insurers with fees based on their reimbursement schedules, rather than on normal practice fees. This practice, which is designed to avoid write-offs, artificially lowers the amounts used in the insurer’s analysis and determination when updating the reimbursement fee schedules and makes it virtually impossible to accurately determine the true "value" of dentistry. Many dentists say the reimbursement fee schedules are unreasonably low -- they say they stay with insurers only to retain patients. While a few insurers annually request that their participating dentists file, or register, their current practice fees, very few dentists participate. Given the lack of availability of actual practice fees, insurers either use  information from the claims they've received or purchase information. The companies offering the information typically advertise that it is from claims submitted. Because neither practice fee schedules nor services provided to the uninsured at the full fee rate are submitted to or captured by the companies analyzing fee information, that information is not included in the calculations. Insurers sort charges into percentiles for each, specific CDT code, and dental practices can use the figures to help understand what their cost structure must be to ensure a reasonable profit. But what insurers show as the 70th percentile could very well be the 50th percentile of the actual practice fees for dentists in an area. Will submitting normal practice fees affect reimbursement levels? The result may be an increase in reimbursement levels – or not. The insurer could maintain the same reimbursement fee schedule, even as submitted claims rise, and claim higher cost containment. An insurer uses cost containment reports as a competitive tool to show how it saves money for its clients. Basically, the lower the premium and the higher the cost containment, the more competitive the insurer can be. Still, with the ability to easily post or to utilize auto-posting capabilities in most practice management systems, and with the Jan. 1, 2014, mandate that requires insurers to be able to provide electronic payment files (remittance advice), the practice of submitting fees based on reimbursement schedules to avoid write-offs seems counterintuitive given that the practice could lower future reimbursement schedules.

Oscar Bryant

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Oscar Bryant

Oscar Bryant is the cofounder and CEO of AccessDentist365, which makes connections between consumers, dentists and payers with the goal of lowering costs and increasing the affordability and accessibility of dentistry. He is also the founder and managing member of Venture Capital Technology Development, which provides software development and support services for start-ups in exchange for convertible debt or equity and a board seat.

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