Dental Insurance Reform Issues Defined

Some examples of issues that may occur regarding self-funded plans:

Assignment of Benefits

The issue: Some third-party payers will only assign benefits to participating providers, even when the patients sign the appropriate assignment of benefits box on the claim form. This is a particularly damaging practice because dentists charge the patient only what will not be covered by insurance at the time of service, when assignment of benefits has been obtained. Dentists are then placed in a difficult collections position because in some cases their patients will not pay them after receiving payment from the insurance carrier.

Often the dentist will not receive a copy of the explanation of benefits and has no idea of the amount paid, or even if the claim was received and processed at all. It is hard for dentists to understand why a third-party payer would not honor the assignment of benefits from the plan participant. Many dentists feel that not honoring patients’ requests to assign benefits to nonparticipating providers is an attempt by carriers to get these providers to join their networks. Dentists believe that third-party payers that will not assign benefits to nonparticipating dentists should inform dentists of this policy upfront so that dental offices may collect money from patients at the time of treatment.

MDA advocacy: Missouri has an Assignment of Benefits law for all health insurance carriers, yet there still seems to be pushback from carriers when a patient requests that the payment be made directly to the provider.

Virtual Credit Cards

The issue: In recent years, insurance companies have started paying healthcare providers using electronic payments, including virtual credit cards (VCC). While electronic payments are useful and convenient, certain types of electronic payments such as VCCs reduce the net amount received by a provider from a health insurer. 

A VCC works the same way as a physical credit card. These cards are typically delivered to the dental office either by fax or secure email. The dental office can process the payment just like it does any other credit card transaction – by entering the card number, security code, expiration date and amount. However, like any other credit card transaction, there typically is a processing fee associated with VCC payments, which can range from 2.5% to 5% on the underlying charge. This means that whenever a provider is reimbursed by an insurance company using this method of payments, 2.5% to 5% is automatically subtracted from that reimbursement payment as a transaction fee.

MDA advocacy: In 2019, the Missouri legislature passed legislation to require health carriers utilizing alternative methods of reimbursement (such as VCC) to notify the provider of initiating/changing such method of payment, and permit the provider opt-out. Since the passage of this legislation, the MDA continues to hear from its members that many health carriers require the provider opt-out for each individual payment. Meanwhile, claims paid via VCC almost always require the provider to pay a fee to be reimbursed. 

In the 2023 session, the MDA introduced legislation to prohibit health carriers from reimbursing claims in a manner that requires the provider to pay a fee to receive payment. Unfortunately, our VCC legislation met too much opposition from legislators and leadership favorable towards insurance to advance this year. We are exploring other ways to address this continuing issue in the interim.

Non-Covered Services

The issue: The definitions of covered and non-covered services are important within a contract.

Example contract language: “Covered Services means dental services and supplies for which benefits are provided under an Enrollee Contract.”

In the above example, there is no clear list of covered services in the contract apart from this vague definition. It is important to know whether you can charge the patient your full fee when the service is not covered for other reasons. For example, if the patient exceeds annual maximum coverage limits or if the service is simply excluded under the plan. Many contracts do not address how non-covered services are treated.

If you signed a participating provider agreement with a dental plan that has a non-covered services provision, and there are no statutes in your state to prevent it, then you may be contractually bound to only charge the patient the dental plan’s maximum allowable fee for the non-covered procedure(s).

If the contract stipulates that reimbursement for the procedure is non-billable, then the claim will be denied and the participating dentist also cannot bill the patient for the procedure. This makes it very important to note the contract language and processing policies for every plan you are contracted with.

MDA advocacy: The MDA has helped pass legislation preventing dental plans from capping what a dentist can charge a patient for a non-covered service. This means that you could charge your full fee in this scenario. However, some insurance companies find loopholes based on contractual language that may have been vague to dentists.