The National Insurance Guide

The NationalInsurance Guide

compiled by the SAO and approved by the AAO

401 North Lindbergh, St. Louis, MO 63141800.424.2841 or 314.993.1700

AAOmembers.org

Revised 2008

SAO OFFICE INSURANCE GUIDE

2

CONTENTS

PrefacePrefacePrefacePrefacePreface 3 3 3 3 3

ChaptChaptChaptChaptChapter 1: Hister 1: Hister 1: Hister 1: Hister 1: Histororororory of Dental Benefy of Dental Benefy of Dental Benefy of Dental Benefy of Dental Benefitsitsitsitsits 5 5 5 5 5

ChaptChaptChaptChaptChapter 2: Ter 2: Ter 2: Ter 2: Ter 2: Types of Dental Rypes of Dental Rypes of Dental Rypes of Dental Rypes of Dental Reimbureimbureimbureimbureimbursementsementsementsementsement 8 8 8 8 8

ChaptChaptChaptChaptChapter 3: Plan Designer 3: Plan Designer 3: Plan Designer 3: Plan Designer 3: Plan Design 1111144444

ChaptChaptChaptChaptChapter 4: Claims Aer 4: Claims Aer 4: Claims Aer 4: Claims Aer 4: Claims Administrationdministrationdministrationdministrationdministration 1919191919

ChaptChaptChaptChaptChapter 5: HIPer 5: HIPer 5: HIPer 5: HIPer 5: HIPAAAAAAAAAA 3333311111

ChaptChaptChaptChaptChapter 6: Orer 6: Orer 6: Orer 6: Orer 6: Orthodontic Codesthodontic Codesthodontic Codesthodontic Codesthodontic Codes 3333333333

ChaptChaptChaptChaptChapter 7er 7er 7er 7er 7: Of: Of: Of: Of: Offffffices of Sices of Sices of Sices of Sices of Stattattattattate Insurance Commissionere Insurance Commissionere Insurance Commissionere Insurance Commissionere Insurance Commissionersssss 3535353535

ChaptChaptChaptChaptChapter 8: Glossarer 8: Glossarer 8: Glossarer 8: Glossarer 8: Glossary of Dental Benefy of Dental Benefy of Dental Benefy of Dental Benefy of Dental Benefit Tit Tit Tit Tit Terminologyerminologyerminologyerminologyerminology 3636363636

ChaptChaptChaptChaptChapter 9: Fer 9: Fer 9: Fer 9: Fer 9: Frequently Askrequently Askrequently Askrequently Askrequently Asked Insurance Questionsed Insurance Questionsed Insurance Questionsed Insurance Questionsed Insurance Questions 4444477777

ADDENDUM: POLICIES, FADDENDUM: POLICIES, FADDENDUM: POLICIES, FADDENDUM: POLICIES, FADDENDUM: POLICIES, FORMS, AND LETTERS (separatORMS, AND LETTERS (separatORMS, AND LETTERS (separatORMS, AND LETTERS (separatORMS, AND LETTERS (separate PDF)e PDF)e PDF)e PDF)e PDF)

PrivPrivPrivPrivPrivacy Pacy Pacy Pacy Pacy Policy (4 itolicy (4 itolicy (4 itolicy (4 itolicy (4 items)ems)ems)ems)ems)

Filing InfFiling InfFiling InfFiling InfFiling Information (2 itormation (2 itormation (2 itormation (2 itormation (2 items)ems)ems)ems)ems)

InfInfInfInfInformation on Third Pormation on Third Pormation on Third Pormation on Third Pormation on Third Parararararties (1 itties (1 itties (1 itties (1 itties (1 item)em)em)em)em)

Sample PSample PSample PSample PSample Policy and Leolicy and Leolicy and Leolicy and Leolicy and Lettttttttttererererers (3 its (3 its (3 its (3 its (3 items)ems)ems)ems)ems)

What YWhat YWhat YWhat YWhat You Should Knoou Should Knoou Should Knoou Should Knoou Should Know About Yw About Yw About Yw About Yw About Your Orour Orour Orour Orour Orthodontic Insurance Benefthodontic Insurance Benefthodontic Insurance Benefthodontic Insurance Benefthodontic Insurance Benefit (11 itit (11 itit (11 itit (11 itit (11 items)ems)ems)ems)ems)

FleFleFleFleFlexible Spending Axible Spending Axible Spending Axible Spending Axible Spending Accounts/DR (7 itccounts/DR (7 itccounts/DR (7 itccounts/DR (7 itccounts/DR (7 items)ems)ems)ems)ems)

Sample FSample FSample FSample FSample Forms torms torms torms torms to File Complaints (2 ito File Complaints (2 ito File Complaints (2 ito File Complaints (2 ito File Complaints (2 items)ems)ems)ems)ems)

RRRRReporeporeporeporeport on Insurance Rt on Insurance Rt on Insurance Rt on Insurance Rt on Insurance Refusal/Refusal/Refusal/Refusal/Refusal/Request fequest fequest fequest fequest for Aor Aor Aor Aor Additional Infdditional Infdditional Infdditional Infdditional Information (1 itormation (1 itormation (1 itormation (1 itormation (1 item)em)em)em)em)


3

PREFPREFPREFPREFPREFAAAAACECECECECE

The idea to produce an office manual

related to Third Party issues in orthodontics came

as a result of an SAO survey that revealed signifi-

cant office confusion and frustration with insur-

ance claims administration. Recurrent problems

common to all practices prompted the SAO

Executive Committee to authorize an Insurance

Committee whose charge was to assemble as

much helpful information on this subject as

possible and make it available in a usable form

for office staff.

The purpose of the manual is to educate,

instruct, troubleshoot, and heighten staff aware-

ness to the responsibilities of data processing

patient care in a Third Party environment. As it is

time dated to issues that are constantly changing,

updates and revisions must necessarily follow as

needed.

There is an inherent bias evident in

sections dealing with self-funded dental benefit

plans like Direct Reimbursement (DR), Direct

Assignment (DA), and Flexible Spending Accounts

(FSA). No apologies are necessary when years of

documented facts speak for themselves. Orga-

nized Dentistry, with good reason, has favored,

supported, and promoted this type of benefit for

many years. With Third Party intervention both as

a collector of funding and a payer of claims, one

must expect differences in outcome for value

received against dollar paid. The integrity of the

orthodontic profession depends on our under-

standing of and independence from Third Party

involvement and on our understanding of and

dependence on the ethical care of patients.

There is always opportunity for the

orthodontist’s and staff’s knowledge to be a

decisive factor in CEOs’, HR personnel, benefit

managers’, and patients’ decisions regarding

dental benefits. At the very least, the AAO and

ADA provide a wealth of resource information for

prospective purchasers of dental benefits to

analyze and evaluate. Nothing but ill will is

created when the doctor or staff degrades a

patient’s insurance. Their benefit package is a

significant ‘perk’ and must be respected regard-

less of its worth or effectiveness. Our job is to

help patients understand the benefits of orth-

odontic treatment, provide that service in a

professionally competent environment, and

facilitate Third Party transactions into the daily

practice of orthodontics.

Hopefully, this office guide will improve

the management of reimbursement and support

the profession’s effort to deliver superior service

to an informed public.

AAAAACKNOCKNOCKNOCKNOCKNOWLEDGEMENTWLEDGEMENTWLEDGEMENTWLEDGEMENTWLEDGEMENTSSSSS

Compiling the material for this manual

would not have been possible without the willing

permission granted by various contributors. We

have directly quoted, paraphrased, and copied

parts of their content as it appeared in various

forms. We did not attempt this challenge as any

type of original work nor did we seek to re-invent

any wheel that was already rolling. The idea was

to gather as much usable and useful information

related to Third Party intervention into the daily

practice of orthodontics between two covers —

hoping that it would educate office staff and

facilitate the challenging job of keeping a smooth

efficient operation with Third Party payers. Fortu-

nately, this has been less of a problem in orth-

odontics than in general dentistry and in no way

has dentistry been as adversely impacted as

medicine. To its great credit the AAO has always

been at the forefront in the dental benefit arena

and has kept alive and viable the alternatives to

Insurance control of the profession. The Council

on Health Care and Council on Insurance and

AAOPAC have been watchdogs who bark, growl,

and bite when necessary. One has to begin with

appreciation expressed to Dr. Kelly Carr who in

the 1960’s originated the concept of Direct

Reimbursement and never wavered in his convic-

tion that it was a better idea. In spite of all the

expected opposition, he convinced enough key

people in the AAO that DR is now a household

word in the benefits lexicon. We have borrowed

extensively from AAO and ADA brochures and


4

information. We have benefited from information

supplied by the Mr. John Stoner Organization in

St. Petersburg, FL who was a key developer of

Direct Assignment Plans and from Mr. Roger

Shultz who contributed much to the art of selling

Direct Reimbursement. Mr. Bob Macdonald of

the Florida Dental Association’s Dental Benefits

Department has been a tremendous help in

allowing us to use material in his Dental Office

Guide For Understanding Dental Benefits Pro-

grams, a course he presents to the University of

Florida College of Dentistry. We were already far

along with our work when we learned of its

existence, but it helped us reshape our ideas and

relate his presentation to orthodontists. Copy-

righted material from the ADA and other sources

required permission.

The AAO has been a driving force behind

the growth of and respect for self-funded dental

benefit plans across the nation.

The SAO is appreciative of the contribu-

tions of Dr. John Harrison in determining and

gathering the materials that should be included in

the original Guide and this Update. His counsel

was invaluable. Dr. Harrison has served honor-

ably as the SAO representative to the AAO Council

on Health Care for 8 years.

The SAO Board of Directors is to be

commended for encouraging the project because

of the need expressed in the membership survey.

Lastly, an expression of thanks goes to Dr. Steve

Tinsworth who was insistent that a manual

dealing with insurance issues be undertaken by

the SAO. We appreciate the willingness of every-

one involved to do whatever is necessary to help

people understand dental needs and the services

that provide that care.

We are appreciative of the offices who

assisted in reviewing and suggesting comments

to add to the content of this updated Guide. In

particular, we would like to thank the staffs of Dr.

Beth Faber and Dr. Michael Rogers.

DISCLAIMERDISCLAIMERDISCLAIMERDISCLAIMERDISCLAIMER

The SAO Insurance Office Guide is pre-

sented for informational purposes only. Legal

advice requires an attorney, and this guide should

not be relied on as legal advice or as a substitute

for a personal attorney. Laws, facts, and condi-

tions change as well as conclusions based on

them. The SAO Insurance Committee will update

information as needed to keep our members

current with practice implications as related to

orthodontic benefits in the market place. The

guide is not intended to offer or challenge any

philosophy of practice related to Third Party

payers. We have attempted to be responsibly

objective with descriptions and definitions. The

content of this guide has come from many reli-

able sources and we have liberally used the

statements and ideas they expressed.


5

ChaptChaptChaptChaptChapter 1: er 1: er 1: er 1: er 1: History of Dental Benefits

Insurance can generally be defined as a group of people

pooling resources to reimburse one of its members who suffers a

financially catastrophic and unpredictable loss. “Dental Insur-

ance”, then, is somewhat of a misnomer in that its losses are

extremely predictable and are not generally catastrophic. Never-

theless, “dental insurance” developed, and it is useful to under-

stand why.

The early 1960s generally marks the advent of dental

insurance. Unrelated economic, political, and dental phenomena

occurred at roughly the same time which acted as a stimulus to

prompt the development of this insurance. It is important to

examine each of these separately to understand their impact.

The first phenomenon involved the federal government.

There were those in Congress who felt that access to health care

was limited and that, to some extent, this lack of access was

related to the number of available practitioners and to the costs

involved. The government’s solution to this problem was to use the

economic “supply and demand” principle. It was felt that by

stimulating an increased supply of practitioners, the lack of avail-

ability would be met on the one hand, and increased competition

would meet the problem of cost on the other. Therefore, programs

were developed to stimulate more graduates from our health care

professional schools.

During this period there was a dramatic increase in the

number of dental school graduates, so much so that there became

known the term “busyness problem”. Fees were not reduced but

stabilized. Dental incomes did not keep pace with inflation for

approximately 15-years. The law of supply and demand failed in

this instance since the percentage of the public receiving dental

treatment did not increase.

The second phenomenon also occurred in the early 1960s.

The labor force in this country began demanding more in the

way of fringe benefits. The insurance industry was quick to recog-

nize this opportunity and designed a dental insurance system

without any significant guidance or consultation with the dental

profession. These dental plans were designed using the industry’s

medical insurance experience as a model.

It was clear to some at that time that the economics of

dentistry and medicine were very different and that the medical

model would not suffice. It was also known that providing a dental

benefit was extremely predictable in terms of cost. However,

“dental insurance” promised to solve the “busyness” problem

dentists were facing, so not much opposition was raised regarding

its development.

The third phenomenon began to occur in the 1970s and

extended into the 1980s. Overall costs in health care began to rise

disproportionately—greater than the general inflation rate or cost of

living index. The insurance industry felt great pressure from their

AAO STATEMENT

OF POSITION

In consideration of the role oforthodontics in health care forthe American people, themembers of the AmericanAssociation of Orthodontistsbelieve that:

• Orthodontics is anintegral part of oralhealth and that oralhealth is an importanthealth care service.Orthodontic carecontributes to thepatient’s overallhealth, quality of lifeand self-esteem.

• All American patientsshould continue tohave the freedom toselect qualified dentalhealth care providersof their choice. Thefreedom of patients toselect their dentalhealth care provider is

What are Dental BenefWhat are Dental BenefWhat are Dental BenefWhat are Dental BenefWhat are Dental Benefits?its?its?its?its?

(1) The amount payable by a

third party toward the cost of

various covered dental services

(2) The dental service or proce-

dure covered by the plan.

Source: AAO Policies on Dental

Benefits Programs

Who Are Third PWho Are Third PWho Are Third PWho Are Third PWho Are Third Parararararties?ties?ties?ties?ties?

•Employers/ Third Party

Administrators (TPA)

•Insurance Company

•Dental Service Corporation

•Prepaid Dental Plan

•Independent Practice

Association


6

clients to contain costs. The overabundance of dentists and the

“busyness” problem made dentistry a prime candidate for man-

aged care devices even though dentistry did not account for very

much in the rise in health care costs.

Commercial insurance carriers turned the success they

were having controlling medical costs through development of

Health Maintenance Organizations (HMOsHMOsHMOsHMOsHMOs) toward dentistry. The

basic indemnity plans were ratcheted down into several hybrid

alternatives. Dental Health Maintenance Organizations (DHMOsDHMOsDHMOsDHMOsDHMOs)

began to appear as “prepaid” dental plans. It features a

“gatekeeper” function where everyone is assigned a general practi-

tioner who determines if referrals to dental specialists are neces-

sary.

The DHMO is an exclusive provider plan, which provides

care to prepaid enrollees who receive care only from contracted

providers. These plans are popular because of their low cost

monthly premiums and non-employer involvement. They are

known as “capitation” plans because the provider dentists receive

a monthly payment per “head” (patient) to care for the patient

regardless of whether the patient was seen for any dental services

that month. Usually that amount is 60% of the monthly premium.

Another option presented was Preferred Provider Organiza-

tions (PPOsPPOsPPOsPPOsPPOs). The “capitation” and “gatekeeper” function is re-

moved; patients can select from a list of providers and can receive

care out of network although out-of-pocket expenses for the patient

will be higher than the plan allows for reimbursement. PPOs have

higher monthly premiums and cover more services. Large insur-

ance corporations offer a variety of dental plans (indemnity, PPO,

and DHMO) but inherently oppose self-funded plans such as Direct

Reimbursement (DRDRDRDRDR) because they are competitive alternatives to

“traditional” insurance products.

The coalescence of these three phenomena at roughly the

same time changed the face of the dental profession dramatically.

No longer can the individual dentist make all decisions regarding

his patients and practice independently. The Third Party now plays

a prominent role in that process.

To counter the intrusion of third parties, organized dentistry

became a Third Party in California: California Dental Services gave

birth to Delta DentalDelta DentalDelta DentalDelta DentalDelta Dental, a Dental Service Organization run by dentists

which became a giant provider not unlike the major players in the

dental prepayment marketplace.

Concerns with Delta prompted interest in independent

practice associations (IPIPIPIPIPAsAsAsAsAs). Dental IPAs allowed dentists to own a

corporation that controlled the quality and type of care delivered

under a contract to employer groups. The dentists were at risk for

the success of the venture, not a Third Party. IPAs can design a

variety of plans from fee-for-service to capitation. The dentists

were the stockholders and the providers and thus have the opportu-

nity to be competitive and profitable.

The other alternative to managed care developed by orga-

nized dentistry to return to the basics of dental care delivery are the

employer self-funded plans of Direct Reimbursement (DRDRDRDRDR) and

a fundamental Ameri-can right. The personalrelationship betweendentist and patient isthe foundation ofeffective treatment andquality health care.

• The advantages of fee-for-service dentalhealth care and ben-efits systems should bemaintained because oftheir high quality andcost effectiveness. Allemployers, govern-mental and private,should be encouragedto provide dental andorthodontic coverageas a benefit of employ-ment. Direct reim-bursement is thepreferred benefit plandesign due to itssimplicity of adminis-tration and cost effec-tiveness.

• All dental health plans,including publiclyfunded plans, shouldinclude patient protec-tion principles includ-ing, but not limited to:freedom of choice ofprovider, third partyaccountability, elimina-tion of gag rules, andself-referred access tospecialists.

• Benefits for orthodon-tic treatment should beincluded in privately-funded dental healthcare plans, but mustbe designed to pro-mote quality care.Both publicly andprivately-funded plansshould provide orth-odontic benefits toachieve correction ofcongenital anomaliessuch as those associ-ated with cleft lip/palate or traumaticinjuries to the teethand/or orofacial struc-


7

Direct Assignment (DDDDDAAAAA). These are truly fee-for-service, freedom of

choice of dentists, cost-based not procedure-based options that

give back control and responsibility for dental health to the patient,

not a Third Party.

Many state dental associations have taken a pro-active

role in promoting self-funded dental benefit plans by directing

informational advertising to target markets and cooperating with

insurance agents capable of initiating or converting dental plans to

a self-funded model. This partnership was the stimulus needed to

make a product like Direct Reimbursement viable and sellable to

skeptic of human resource personnel. They inherently trusted the

agents’ role of providing information and options more than that of

dentists. Naturally they were suspicious of dental self-interest and

self-righteous indignation over insurance cost cutting; plus dentists

were only offering a concept, not the nuts and bolts needed to put

a plan in place. Without a knowledgeable commissioned sales

force subsidized by dentists, self-funded plans would have re-

mained stagnate. Phenomenal growth occurred because of this

cooperative effort. Much credit must be given to the AAO for its

commitment and dedication to counter balance the cost saving

limited service of Managed Care with dollar enhancing, free choice,

responsible dentist / patient relationship dental care. The AAO

because of their 30+ years experience has provided critical assis-

tance to insurance agents unfamiliar with cost-analysis of self-

funded plans and also to state dental associations. The AAO

promoted its own brand of Direct Reimbursement nationwide until

2004, when the DR baton was passed on to the ADA for implemen-

tation and marketing. Like any alliance, a partnership is only as

good as it continues to meet the self-interest of all parties, noble

causes notwithstanding. Working with “beasts” who can harm you

and devour you takes skill, diligence, and resolve. We have seen

what happened so quickly to the Medical Profession. Dentistry, on

the other hand, has in place a better “mousetrap” with a promising

future.

tures. Publicly-fundedplans should provideorthodontic benefits forindigent and “specialneeds” individuals,regardless of age, ifthey do not receivedental/orthodonticbenefits from theiremployer.

• The tax deductibility ofdental health carebenefits, includingorthodontic care,should be retained.Self-employed indi-viduals should be ableto deduct the full costof dental health carebenefits for themselvesand their families.

HISTORY OF DENTAL BENEFITS

1950s/1960s Dental Service Corporation (CDS)

1970s Delta, Blues, Indemnity Plans, Direct Reimbursement, Closed

Panels

1980s Managed Care Plans (PPOs), DHMOs, Prepaid Plans), IPAs

1990s Direct Assignment, Dental Referral Plans, Point of Service

2000s Consumer-Directed Benefit Plans (HRA, MSA, FSA)


8

ChaptChaptChaptChaptChapter 2: er 2: er 2: er 2: er 2: Types of Dental Reimbursement

There are a variety of dental payment mechanisms offered

in the market place. They can generally be categorized as fee-for-

service, indemnity, discount managed care, self-funded, payroll pre-

tax funded, and government-funded plans. Each has its own spe-

cific characteristics. The golden rule applies: whoever has the gold

makes the rules.

Fee-for-service means the traditional transaction between two

parties, the patient and the dentist. The dentist performs a service

and is reimbursed according to the payment mechanism agreed to

by the patient and dentist. The patient is at risk for the entire fee.

There is no Third Party involvement. Some insurance plans claim

to be fee-for-service but this is a false, erroneous statement be-

cause it contradicts the true definition.

Indemnity or traditional compensation dental insurance

plans are freedom-of-choice plans offered by state regulated

commercial insurance carriers. They compensate a percentage or a

fixed amount of the total fee. Orthodontic coverage is designated

as a maximum lifetime amount as a co-payment to offset the

entire fee of the insured. Typical amounts are $1000 and $1500,

but the reality is that the plan will only reimburse at one-half the

fee up to the maximum. This is confusing to patients who expect to

always receive their maximum amount. Only if the fee is twice or

more than twice the maximum could the patient expect full indem-

nification. For example, if the orthodontic fee is $2500 on a co-pay

basis, the patient will incur $1250 (50%) expense out-of-pocket. If

the benefit is $1500, the patient will receive only $1250 of the

$1500 stated benefit.

A claim form must be accurately and exactly filed after

diagnostic records have been obtained and the case treatment

planned by the orthodontist. The reimbursement can either be

assigned to the orthodontist or to the patient. If the orthodontist

accepts the fee from the insurance company, this is called assign-

ment of benefit. Some offices never accept assignment of benefit

as stated in their office policy to all patients and other offices

alwalwalwalwalwaaaaays ys ys ys ys accept assignment. Practice philosophy determines how

claims will be handled.

Insurance companies vary in how and when they will

reimburse, but they are legally at risk for the designated amount as

long as they are assured the patient completed treatment. Con-

tinuation of treatment forms are routinely sent to verify the fact.

They are a nuisance factor of Third Party payment and can be

avoided by office policies known to the insured before initiating

treatment (sample letter, PDF supplement). The insured gives

proof of continuing treatment by their receipt of payment or copy of

their canceled check to the orthodontist.

Direct Reimbursement (DR) is a self-funded/ fee-for-service /

INDEMNITINDEMNITINDEMNITINDEMNITINDEMNITY PLANY PLANY PLANY PLANY PLAN

•Issued by third party payer,

insurance carrier, dental service

corporation (DELTA or BC/BS)

who accepts risk

•Guaranteed payment of claims

in exchange for monthly

premium

•Freedom of Choice of Dentist

•Assignment of benefits/

balanced billing

•Reimbursement by UCR or

TOA

DENTDENTDENTDENTDENTAL PAL PAL PAL PAL PAAAAAYMENT MODELSYMENT MODELSYMENT MODELSYMENT MODELSYMENT MODELS

NON-NETWORK:NON-NETWORK:NON-NETWORK:NON-NETWORK:NON-NETWORK:

•Fee-for-Service (FFS)

•Self-Funded Plans

(DR/DA=$ based)

•Self-insured

(100-80-50=Procedure Based)

•Indemnity Plan

(Traditional Insurance)

•Consumer Directed

(HRA, FSA, MSA)

NETWORK:NETWORK:NETWORK:NETWORK:NETWORK:

•Preferred Provider

Organization (PPO)

•Dental HMO/ Point of Service/

EPO/IPA

•Prepaid Dental Plan

•Dental Referral Plan

•Consumer Directed

(HRA, FSA, MSA)

•Closed-Panel (Salaried)


9

freedom-of-choice plan that reimburses patients according to

dollars spent on dental care, not type of treatment received. In-

stead of paying monthly insurance premiums, employers pay a

percentage of actual fees-for-service. The design of the DR DR DR DR DR plan is

selected by the employer to fit the company’s budget and will vary

among companies. Commonly, a two- or three-tiered structure will

be encountered whereby 100% of the first $200 of dental expense

will be reimbursed, 50-80% of the next tier, and or 50% of the third

tier up to the maximum. Totals may be individual or family maxi-

mums. The financial obligation is the patient’s responsibility since

there is no insurance company involved; the employer is the Third

Party. An ADA claim form or receipt of payment is required by the

employer to reimburse the employee. Pure DRDRDRDRDR is very popular with

informed human resource personnel because their employees may

choose their own dentist and are free to elect any dental procedure

without restriction.

The downside of DR/DA is the lag time between the time the

patient paid the provider and the time the employer processes

payment to the employee.

Every dollar spent goes toward dentistry, thus avoiding the

25-35% retention associated with fully insured products.

Variations of DR DR DR DR DR were developed to facilitate introducing

this novel plan into the market place. Third Party Administrators

(TPAs) have been enlisted by organized dentistry to promote,

market, and manage this unique approach. Remuneration for their

effort and success is a commission typically 10-15% of premiums

paid, still well below conventional insured products.

A more flexible direct reimbursement plan, Direct Assign-

ment (DA), was developed by organized dentistry, adding an

assignment of benefits feature so the patient does not have the up-

front cost due at the time of treatment. Stop-loss insurance is

available to protect the employer from over-utilization of the plan

(adverse selection) when the plan is initially brought into service.

Some DA plans include another feature, “co-pay”: an office

visit charge, which is collected by the TPA and withheld from the

check back to the dentist for the administrative service charge. The

dentist/orthodontist has also agreed to subsidize the plan (dis-

count the fee) $5 for every billable service; therefore, for orthodon-

tists, quarterly or semi-annual billing prevents an unnecessary $5/

month service charge or withhold from the plan administrator. This

co-payment shared by patient and dentist pays the TPA for the cost

of plan administration and lowers the premium cost, thus making

it more competitive in the marketplace. Patients not utilizing the

plan are not subsidizing those in the group that are and the dentist

/orthodontist is getting a patient they would not have gotten except

for this type of plan. Typically, stop loss is not necessary in spite of

the fear of over-utilization. As long as the plan is funded, experi-

ence has shown that DR/DA plans do not need stop-loss as an

added expense. The dentists will still receive 98% of the fee

similar to credit card financing.

Dental SerDental SerDental SerDental SerDental Service Corvice Corvice Corvice Corvice Corporation (Delta) and Prefporation (Delta) and Prefporation (Delta) and Prefporation (Delta) and Prefporation (Delta) and Preferred Prerred Prerred Prerred Prerred Prooooovider Organi-vider Organi-vider Organi-vider Organi-vider Organi-

DIRECTDIRECTDIRECTDIRECTDIRECT• REIMBURSEMENT REIMBURSEMENT REIMBURSEMENT REIMBURSEMENT REIMBURSEMENT

•Freedom of choice of dentist

•Fee-for-service

•Self-funded (ERISA)

•Dollar Tiered Benefits

•Simple administration

•No predetermination or prior

authorization

•Few restrictions, limitations,

exclusions

DIRECT ASSIGNMENTDIRECT ASSIGNMENTDIRECT ASSIGNMENTDIRECT ASSIGNMENTDIRECT ASSIGNMENT

•Freedom of choice of dentist

•Self-funded (ERISA)/stop-loss

insurance

•Fee-for-service/balanced

billing

•Option: assignment of benefits

•Dollar Tiered Benefits

•Simple administration

•No predetermination or prior

authorization

•Few restrictions, limitations,

exclusions


10

zations (PPO’s)zations (PPO’s)zations (PPO’s)zations (PPO’s)zations (PPO’s) are large discount managed care organizations

that reimburse by a table of maximum allowances or fee schedule.

Delta offers a cafeteria of plan models to compete with all forms of

plans. An orthodontist agrees to be a Delta or PPO network pro-

vider by agreeing to Delta’s or the PPO’s fee schedule which could

differ considerably from his regular fee-for-service. There is no

allowance for any additional charges (“balanced billing”) beyond

the schedule for a network provider. The fee schedule will vary

from region to region because of variations in demand for services

and utilization of the plan. Cost containment through discounted

fees and other limitations are supposedly offset by the argument of

large patient enrollment to fill up empty chairs and increased

business.

Patients should not believe the notion that a “preferred

provider” is somehow specially selected because of their out-

standing ability or superiority over a “non-preferred” provider. This

is an insurance marketing term to make the product seem attrac-

tive to the public. Their preferred provider is subject to annual

review and can be “deselected” without due process if his stan-

dards of treatment vary outside the parameters set by the organi-

zation.

Some PPOs allow the option for a patient to go out of

network (Delta); others may impose some monetary penalty. Billing

the patient for the balance due to the difference between the fee

schedule and the orthodontist’s customary fee may or may not be

allowable (balanced billing).

Dental Health MaintDental Health MaintDental Health MaintDental Health MaintDental Health Maintenance Organizationsenance Organizationsenance Organizationsenance Organizationsenance Organizations (DHMOs)DHMOs)DHMOs)DHMOs)DHMOs) are managed

care discount plans that base their reimbursement on “prepaid”

“capitation” (dollars per month per head). These limited plans are

not encountered in orthodontics. The dentist receives a fixed

payment each month for providing no charge services outlined in

the plan regardless of whether the patient is seen or not seen. Non-

covered procedures preformed by the dentist are highly discounted

and requires payment by the patient. Obviously it is to the dentist’s

advantage to perform as little treatment as possible or to diagnose

only major procedures. Ethical and professional concerns are

realities in this type of arrangement. They are the least expensive

dental plans.

Prepaid LimitPrepaid LimitPrepaid LimitPrepaid LimitPrepaid Limited Health Sered Health Sered Health Sered Health Sered Health Service Organization (PLHSO) vice Organization (PLHSO) vice Organization (PLHSO) vice Organization (PLHSO) vice Organization (PLHSO) is another

type of managed care program sold primarily to groups, but also to

individuals on voluntary enrollment. Participating specialists,

orthodontists, are placed into the network by agreement to provide

services for all procedures and services at a 25% discount. If the

plan requires pre-authorization prior to referral, the specialist must

agree to the subscriber’s (patient’s) discounted schedule of ben-

efits. American Dental Plan American Dental Plan American Dental Plan American Dental Plan American Dental Plan andandandandand Or Or Or Or Oral Health Seral Health Seral Health Seral Health Seral Health Services vices vices vices vices (now known

as ComComComComComp Dentp Dentp Dentp Dentp Dent) are examples. Since there is no verification of the

authenticity of the discount unless non-plan fees are posted, this is

a dubious honor system at best.

A PLHSO is a characteristic capitation model with a

PREFERRED PRPREFERRED PRPREFERRED PRPREFERRED PRPREFERRED PROOOOOVIDERVIDERVIDERVIDERVIDER

ORORORORORGGGGGANIZAANIZAANIZAANIZAANIZATION (PPO)TION (PPO)TION (PPO)TION (PPO)TION (PPO)

•Dentists contract with plan to

join network

•Discount fee schedule

(15%-30%)

•Dentists at risk

•Enrollees may select dentist in

network or pay a higher fee for

non-participating dentists

•Plan reimbursement based on

fee schedule

DENTDENTDENTDENTDENTAL HMO/AL HMO/AL HMO/AL HMO/AL HMO/

PREPPREPPREPPREPPREPAID PLANAID PLANAID PLANAID PLANAID PLAN

•Dentists contract to join

network

•Insureds select from network

dentists

•Network dentist receives

monthly capitation fee per

covered enrollee

•Dentist at risk

•Discounted fee schedule of

40%-50%

DHMO/POINT OF SERDHMO/POINT OF SERDHMO/POINT OF SERDHMO/POINT OF SERDHMO/POINT OF SERVICEVICEVICEVICEVICE

•Visit designated primary care

network dentist (Gatekeeper)

•Verify dental services needed

•Select any dentist and have

dental treatment

•Pay dentists FFS and plan

reimburses up to limits


11

monthly fee (premium) that covers preventative and diagnostic

services at no charge. The member dentist (not orthodontist) is

paid 60% of the monthly premium to provide all the no charge

services provided by the plan. Forty percent is retained by the

PLHSO. Other basic and major dental procedures are scheduled at

highly discounted fees and require payment by the subscriber. The

subscriber “believes” (has been informed) that they will encounter

25% higher specialists’ fees if they seek treatment out of network.

This is not necessarily true, nor is it usually true since there is no

valid comparison unless the documented fee estimate is 25% less

than an out-of-network specialist documented fee estimate. There

is no treatment reimbursement from the plan, except for the

capitated premium; nor is balanced billing in a prepaid capitation

plan allowed. Incentive commissions are very high (15%) for

brokers selling these “Certificates of Benefits” to subscribers

because the PLHSO takes no risk, and they have such a large share

of the market. These plans are aggressively marketed to the public

and are popular with large employers because there is no contribu-

tion or hassle on their part, and it is the simplest way to offer

“perceived” access to dental care to a public that is always ready

for a bargain. Issues could be raised with ethical standards where

quality and treatment could be compromised with “least expensive

alternatives”.

Medicaid Medicaid Medicaid Medicaid Medicaid is the major government funded dental program. Dentists

who participate must complete an application form and have an

approved provider number from the state. Reimbursement is

limited and fixed, and there can be no balanced billing for the usual

fee charged by the orthodontist. Many orthodontists who partici-

pate do so as an act of charity or benevolence.

CHAMPUSCHAMPUSCHAMPUSCHAMPUSCHAMPUS is the military dependent program that contracts with

dentists to provide services to eligible patients.

VVVVVocational Rocational Rocational Rocational Rocational Rehabilitation and Wehabilitation and Wehabilitation and Wehabilitation and Wehabilitation and Worororororkkkkkererererers’ Compensations’ Compensations’ Compensations’ Compensations’ Compensation are other

governmental programs that provide dental care to the public.

Independent Practice Associations (IPIndependent Practice Associations (IPIndependent Practice Associations (IPIndependent Practice Associations (IPIndependent Practice Associations (IPAs) As) As) As) As) are exclusive provider

corporate networks consisting of dentist stockholders who treat the

insured under contract. They can operate under various plan

designs and can insert whatever restrictions are needed to be

competitive in their bidding process.

FleFleFleFleFlexible Spending Axible Spending Axible Spending Axible Spending Axible Spending Accounts (FSccounts (FSccounts (FSccounts (FSccounts (FSAs)As)As)As)As) are a win-win situation for

everyone: reduced payroll taxes for the employer, a significant

health care tax deduction for the employee, and prompt payment

to the dentist. These plans allow for employee payroll contributions

for a menu of health care benefit options with pre-tax dollars. Both

income tax and Social Security taxes are avoided. An individual in a

30% income tax bracket, coupled with Social Security and Medi-

care at 7.65%, realizes a 37.65% reduction on his orthodontic fee

INDEPENDENT PRAINDEPENDENT PRAINDEPENDENT PRAINDEPENDENT PRAINDEPENDENT PRACTICECTICECTICECTICECTICE

ASSOCIAASSOCIAASSOCIAASSOCIAASSOCIATIONTIONTIONTIONTION

•Exclusive Provider Network

•Capitation or Discounted Fees

•Restrictions, Limitations and

Exclusions

•More Competitive than DHMO/

Prepaid Plans in the market

MEDICMEDICMEDICMEDICMEDICAL SAL SAL SAL SAL SAAAAAVINGSVINGSVINGSVINGSVINGS

AAAAACCOUNTCCOUNTCCOUNTCCOUNTCCOUNTS (MSS (MSS (MSS (MSS (MSA)A)A)A)A)

•Employer Funded

•Limited to self-employed and

small employers (50 or less

employees)

•Requires high deductible

insurance policy ($1,600 to

$2,400) with 65% deductible

•Covers payment for health

care services

•Like IRA (15% penalty for early

withdrawal) before 65 years old

HEALHEALHEALHEALHEALTH STH STH STH STH SAAAAAVINGSVINGSVINGSVINGSVINGS

AAAAACCOUNTCCOUNTCCOUNTCCOUNTCCOUNTS (HSS (HSS (HSS (HSS (HSA)A)A)A)A)

•Employer/Employee Funded

•Non-taxable


health insurance plan


care services

•Owned by the individual like

an IRA


12

in real money.

Flex plans operate on a 12-month plan, and once a deter-

mined amount is elected, it is irrevocable. Any money left in the

account at year’s end is forfeited. This “use it or lose it” feature is

not a factor with predictable dental expenses which are ideal for

this mechanism. There is an employer determined maximum,

usually $1000-$2500 each year. Dental practitioners should

encourage their employed patients to take advantage of this

benefit.

Employers, however, are not always eager to implement this

plan and may need some convincing from their employees. The

pre-tax savings to patients are considerable.

Medical SaMedical SaMedical SaMedical SaMedical Savings Avings Avings Avings Avings Accounts (MSccounts (MSccounts (MSccounts (MSccounts (MSAs)As)As)As)As)

Regardless of who manages resources for health care (insurance

company, employer, or patient), the incentive is to spend the least

amount. The patient should have the right to decide how much to

spend and for what. This insures that the interests of the patient

remain paramount. Health care managed by an insurance com-

pany or government has two strikes against it: high overhead costs

and profit-driven health care decisions. Health care insurance adds

to the total cost of health care and often obstructs the rendering of

optimal health care by denial of coverage on the basis of cost

control. Furthermore, insurance never provides for full reimburse-

ment. First dollar costs are prohibitively expensive for any insur-

ance. MSAs provide the means for funding employee health care

benefits with regular pre-tax dollars that accumulate and grow in

invested funds. The annual “use it or lose it” feature of Flex Plans

does not allow for any roll-over into the next fiscal year, nor does it

allow the participants to retain control of the unused balance in

their account. Patients need to accumulate assets to pay for

routine care (first dollar costs) and insurance premiums (last dollar

costs).

MSAs are completely portable and are the property of the

individual regardless of job changes or loss of health insurance.

Many Americans are uninsured short-term (less than six months)

because they are between jobs. Unfortunately, current MSA law

discourages offering these plans by limiting the total number of

plans allowable and limits them to small businesses of less than

50 employees.

MSAs are politically opposed by members in Congress who

favor national health care. Organized Dentistry and Organized

Medicine need to unite and actively seek to eliminate the restric-

tions and limited availability of MSAs.

Major benefits to all Americans are:

1. Minimizing the role of insurance

2. Enabling patients to participate more fully in decisions about

their health care

3. Giving patients a better opportunity to choose the best quality

of care

4. Reducing over utilization

5. Encouraging prevention and early intervention

MEDICMEDICMEDICMEDICMEDICAL SAL SAL SAL SAL SAAAAAVINGSVINGSVINGSVINGSVINGS

AAAAACCOUNTCCOUNTCCOUNTCCOUNTCCOUNTS (MSS (MSS (MSS (MSS (MSA)A)A)A)A)

•Employer Funded

•Limited to self-employed and

small employers (50 or less

employees)


insurance policy ($1,600 to

$2,400) with 65% deductible


care services

•Like IRA (15% penalty for early

withdrawal) before 65 years old

CAUTION

A strategy still used by insur-

ance companies to reduce

reimbursement is called “Blind

PPOs” or “Silent PPOs”. If the

orthodontist ever signed a

contract that gave a deep

discount, your name can be

passed to other PPOs (Silent).

You may be on a “resell” list that

tells the insurance company

what discount you have agreed

to give, and the insurance

company will process your bill

as a provider for the cheapest

PPO possible, thus reducing

your reimbursement and giving

extra profit to the insurance

company at your expense.

Unless you know what fee to

expect, you may not know this is

happening to you. Refuse to join

a PPO that will allow your name

to be released, and be sure you

know what your full payment

should be.


13

6. Relieving health providers of dealing with insurance matters

7. Reducing fraud

8. Decreasing the cost of health care

9. Providing a strong alternative to national health care

10. Allowing participants to retain control of the unused balance in

their accounts

Attached is an addendum of the IRS Publication 969 which

describes HSAs, MSAs, FSAs, and HRAs regulations, or you may

download a copy at www.irs.gov/pub/irs-pdf/p969.pdf. The follow-

ing websites may be useful: www.heritage.org, www.ncpa.org,

www.galen.org

Health RHealth RHealth RHealth RHealth Reimbureimbureimbureimbureimbursement Arrangements (HRAs).sement Arrangements (HRAs).sement Arrangements (HRAs).sement Arrangements (HRAs).sement Arrangements (HRAs). These are ac-

counts to reimburse medical expenses under IRS Section 213(d)

provided and financed by employer contributions for their employ-

ees. There is no allowable contribution by the employee. Unused

credits may be carried over to subsequent years and may be

coordinated with flexible spending accounts (FSAs). The potential

for savings with tax exempt medical expenses and growth from

unspent funds rolling over from year-to-year plus the ability to

select any doctor and consumers’ incentive to ration their own

health care is a big deal and could signal the end of “stuffing

employees into unpopular HMOs”. Over time, participants could

build up sizable accounts with which to meet future health care

expenses. Already prototype plans have seen huge drops in health

care costs. Aetna and Humana are selling such policies to major

U.S. corporations.

CAUTION

Usual, customary and reasonable fees (UCR) per zip code are quoted by insurance compa-

nies as the basis for their fee structure, but this has often been proven to be an erroneous

statement. Patients need to be informed that UCR is each insurance company’s computer

derived payment for each procedure that will still be profitable to the company in the trans-

action. It has no relationship to fees charged by dentists. There is high variability in the

determination of UCR and updating fees. Often a poor correlation exists with the reality of

fees in any given geographical area. A dentist’s/orthodontist’s fee may be higher or lower

than an insurance company’s UCR for many valid reasons and patients must be educated

beforehand that insurance companies determine their own fees for procedures. Problems

arise when the insured is informed that their dentist’s fee is much higher than their UCR

reimbursement, thus putting the dentist in an adversarial position.

FFFFFee Financing,ee Financing,ee Financing,ee Financing,ee Financing, basically a loan granted to a qualified patient where by the entire fee less the com-

mission (7.5%), is paid to the orthodontist upfront, and the patient pays the lending company over

time with 10-18% interest charges. Orthodontic Fee Plan (OFP) is such an entity. The main advan-

tage is that it helps the traditional fee-for-service orthodontist compete with the no down payment

(no initial fee) advertised by some corporate orthodontic entities. Some orthodontists believe that a

high initial fee discourages patient acceptance since it has been reported that 77% of American

consumers would bounce a $500 check. Another advantage is that it takes any collection problem

out of the office. There is a strong buying mentality in America that is accustomed to monthly pay-

ments.

HINT

HRAs and FSAs can be coordi-

nated so that participants can

be covered by both

HEALHEALHEALHEALHEALTH REIMBURSEMENTTH REIMBURSEMENTTH REIMBURSEMENTTH REIMBURSEMENTTH REIMBURSEMENT

ARRANGEMENT (HRA)ARRANGEMENT (HRA)ARRANGEMENT (HRA)ARRANGEMENT (HRA)ARRANGEMENT (HRA)

•Employer Funded (funding

pool)

•Non-taxable employee benefit

•Pay health care premiums, co-

insurance payments, cost of

health care services

•Limited to qualified health

care services

•Can be used as a defined

contribution retirement benefit

plan to pay health care costs

and Medicare supplements


14

ChaptChaptChaptChaptChapter 3: er 3: er 3: er 3: er 3: Plan Design

Lack of insurance is the top reason people give for not

visiting the dentist, yet not all dental plans are a good buy. Premi-

ums paid by the patient plus co-payment paid by the patient over a

period of time against the actual claims paid by insurance compa-

nies often exceed the actual dollar cost of the dentistry supplied.

As an example, $1000 could be paid out by the insured in one year

when the total dental bill was $800. Insurance works because of

under-utilization. Approximately 50% of employees with dental

insurance will not use it in any given year; therefore, the reservoir of

money accumulates for the insurance company. The ADA states

that the average annual dental expense per person in the USA is

very low. Obviously, orthodontic, oral surgery, periodontal, endo-

dontic, and cosmetic expenses are much higher than the average

for general dentistry. Critics of dental insurance believe we should

only insure against a risk we do not anticipate or against a cata-

strophic loss that we could not handle financially.

Routine basic dental expenses over time are very predict-

able, and there are alternatives to insurance for higher dental

expenses such as flexible spending accounts and medical savings

accounts (where legal). They allow tax-free dollars to be deducted

from payroll, thus providing a significant discount at government

expense, not the dentist’s expense. In one sense they become an

interest free loan since the entire allocation set aside for dental

care can be drawn the first month the plan is in effect. By fully

utilizing all the features of a Flex Plan, it is actually possible to

achieve a $5,347.50 tax savings over 3 years for a prospective

patient’s parents in a 28% tax bracket. That would more than pay

for a $4,000 orthodontic fee without any insurance benefit.* (John

Stoner TPA) Surprisingly, this is not a well-known fact, nor are flex

plans as popular as they should be.

Insurance products add to the cost of dentistry because of

the profit that must be made by the insurance company, adminis-

tration /management costs, incentives and commissions to bro-

kers, and marketing/promotions costs. The upside is that dental

fees are higher because of insurance than in pre-insurance days.

The downside is that insured orthodontic benefits in 1971 were

$1,000 and many are still $1,000 in 2008 in spite of increasing

premiums and increased costs delivering orthodontic services.

Plan design makes quite a difference to both patient and

dentists alike, and decisions are necessary regarding the positives

and negatives of how each office will respond to various types. Not

all dental plans include orthodontic treatment, or the terms may be

different, and some plans have an age limit of 18. Most conven-

tional orthodontic insurance is a fixed lifetime maximum allow-

ance— typically $1,000-$1,500 paid at 50% of the charge up to the

maximum or whichever is less. UCR is meaningless because the

amount of the fee has no relation to the fixed benefit.

Managed Care Plans work from a fixed fee schedule at a

DENTDENTDENTDENTDENTAL BENEFITAL BENEFITAL BENEFITAL BENEFITAL BENEFITS MARKETS MARKETS MARKETS MARKETS MARKET

Presented at National Dental

Benefit Conference sponsored by

the ADA in 2007

•162,500,000 people enrolled

in dental benefit plans

--50% have PPO coverage

--26% have Indemnity plans

--15% have DHMO coverage

--9% have Discount dental plans

•Enrollment in dental plans has

increased by 8% in the last 10

years

•Key dental industry trends are:

--Costs have been shifting to

consumers and employees are

paying a larger % of premiums

--Rising costs are forcing

carriers into new territories such

as the discount dental market

--Administration costs have

decreased by about 3% since

2003

• New innovations in dental

plan benefits are:

--Hybrid dental benefit products

--Modified designs to older plans

such as annual maximum roll-

overs

•2,000,000 persons covered by

other plans (2%)


15

reduced fee that the provider orthodontist must adhere to without

billing for any increased cost due to complexities (no balanced

billing). If the patient chooses to go out of the network of provid-

ers, reimbursement is either denied or subject to conditions. The

orthodontist’s option to work with managed care plans carries the

lure of high volume to offset the lower cash flow. There are no

marketing- referral worries with the patients supplied. The fee-for-

service orthodontist must be willing to accept the burdens of

making their practice attractive to more independent clients who

value freedom of choice and who are not financially dependent on

low cost or insurance products. There is a large market share of the

population, approximately 50%, who will probably never purchase

dental insurance. There are reputable ethical orthodontists on both

sides of the managed care issue and some in the middle who

incorporate both fee-for-service and managed care patients in their

practice.

Cost-containment features of both Indemnity Plans and Man-

aged Care Plans are: waiting periods, deductibles, office visit

charge, co-payment by insured of 20%-50% of fee, UCR, table of

allowances, balanced billing, predetermination of benefits, prior

authorization, coordination of benefits, least expensive alternate

treatment (LEAT), limitations, restrictions, exclusions, time limita-

tions between procedures (radiographs, cleanings, crown replace-

ments etc.) and pre-existing conditions (See Glossary for definition

of terms). Fortunately, orthodontics has not been as burdened by

these encumbrances as has general dentistry, and obviously,

orthodontics is always a pre-existing condition before a plan goes

into effect. Exclusions are procedures not covered by the dental

plan such as implants, TMJ treatment, Orthognathic Surgery,

orthodontics, and cosmetic dentistry. Major Medical Insurance

may or may not cover TMJ treatment or Orthognathic Surgery,

excluding the orthodontic component.

It is important to understand that insurance carriers have a

customary fee (average) for a given geographical area (zip code’s

first three numbers) for every dental procedure in order to base the

reimbursement on a percentage of the customary fee. All proce-

dures are identified by specific categories in the ADA CDT-7 Code of

Dental Nomenclature. It is important that patients understand that

dental benefits only pay a portion of any fee charged. There are

many problems created when insurance carriers tell their insured

that the fees they are paying for dental services are above the

customary rate for the area. To avoid any impression that the

patient is being overcharged, it would be best to explain how

insurance carriers actually arrive at what they misleadingly refer to

as usual, customary, and reasonable.

Rarely, if ever, are orthodontists required to submit radio-

graphs or photographs to an insurance company to gain prior

approval for coverage.

Coordination of benefits is an issue when an insured has more

than one dental plan or when there is an accident that will cover

Dollar-Based Plan HighlightsDollar-Based Plan HighlightsDollar-Based Plan HighlightsDollar-Based Plan HighlightsDollar-Based Plan Highlights(presented by Regence Blue

Shield)

•No procedure classes or

exclusions except cosmetic and

orthodontic orthodontic orthodontic orthodontic orthodontic procedures

•No deductible

•6-month waiting period

•No network

Plan will pay:

--100% of first $150 of care

--80% of next $500 of care

--50% of remaining care until

Annual Benefit Maximum is

reached ($750, $1000, $1250,

$1500 annual maximum

choices)

Rates:

$44 Adult

$24 Child

$50 65+

Procedure-Based PlanProcedure-Based PlanProcedure-Based PlanProcedure-Based PlanProcedure-Based Plan

HighlightsHighlightsHighlightsHighlightsHighlights (presented by

Regence Blue Shield)

•$50 deductible waived if

patient has at least one prophy

and exam per year

•No waiting periods

•No network

•Benefits increase based upon

length of enrollment

Rates:

$32 Adult

$25 Child


16

dental fees under another type of insurance policy (e.g., workers

compensation, auto insurance, personal injury protection). It is a

criminal act if reimbursement exceeds 100% of the total charges.

The dental office is obligated to inform both insurance companies

in situations where there is double coverage and it is the obligation

of the insurance companies involved to settle the monetary issue

between them.

Assignment of Benefits is another issue as to whether or not an

orthodontic office chooses or refuses to accept assignment of

benefits which means that the insurance claim will either reim-

burse the orthodontist or the patient. Accepting assignment does

create various bookkeeping problems as the office deals directly

with insurance representatives and continued requests for docu-

mentation. Wasted time on hold with insurance companies’

inadequate customer service agents is a major complaint from

most offices accepting assignment. Nevertheless, it may be a

necessity to assist the patient’s payment for treatment and may

actually enhance the dentist-patient relationship.

Not accepting assignment creates a wall of independence

for the orthodontist from insurance ownership and its inherent

problems and seems to help the patient and their employer be

more responsible for the plan that they accepted, especially when

there are irritating hassles. The entire fee is paid by the patient,

the same as a fee-for-service. The orthodontic office is out of the

loop as to when and how much the patient is reimbursed. Finan-

cial accounting and monthly reporting is much less of a problem

for the office staff. It is worth mentioning that at the beginning of

the 21st Century approximately 70% of the orthodontists in the

SAO accepted assignment and 30% strongly held to not accepting

assignment. This percentage may have changed since the original

survey. There are happy patients and orthodontists in both camps

and so it will remain.

An ideal plan design would have these features:

• Easy to understand

• Amount of reimbursement known before visiting the orthodon-

tist

• No complex forms

• Freedom to choose orthodontist

• No exclusions, restrictions

• No pre-authorization

• More dollars for actual treatment

• Reimbursement based on dollars spent, not procedures

• Reduced administrative expenses

• Funds budgeted to pay claims stay with employer

• Cost-effective

• Helps patient become a better dental consumer and involved in

their treatment

• Flexibility as needs change (ortho, oral surgery, perio, endo,

reconstructive)

HELPFUL HINTS FOR

CONSIDERING PLAN DESIGN

• Does the employer have

access to sufficient

information to make a

decision?

• How many dentists have

accepted the plan, and

what is the geographical

distribution?

• Are there enough den-

tists to adequately serve

the group?

• How many dentists

withdrew from the plan?

• What are the criteria for

selecting dentists to

participate?

• What is the utilization

rate for patients in the

plan?

• What is the average

waiting period for an

initial appointment?

• What is the average

period between appoint-

ments?

• What are the benefits

for patients requiring a

specialist’s care?

• How are specialists

selected and compen-

sated?

• Does the plan have

adequate specialists’

participation?

• Are dentists limited to

contracted specialists?

• Does the plan provide

for emergency treat-

ment?

• What provisions are in

the program for emer-

gency care away from

home?

• What provisions are

made for unforeseen

circumstances or diffi-

cult cases?

• What percent of the

premium is used for


17

Self-funded dental plans such as Direct Reimbursement (DR),

Direct Assignment (DA), and Flexible Spending Accounts (FSAs)

allow the beneficiary freedom of choice of orthodontist and fee-for-

service. They reimburse according to dollars spent, not procedures.

The plan is designed by the employer, usually with the assistance of

a Third Party Administrator (TPA). Cost estimations that have

proven to be exceptionally accurate are provided by the AAO, ADA,

state dental associations, and TPAs. Recognized actuaries compile

national dental treatment data.

Basic plan design for DR or DA would pay 100% of the first

$200, 80% of the next $500, and 50% of the remaining dollars up

to the annual maximum of $1,000. There is no distinction as to

what type of dental service is rendered. In DR the patient pays the

dentist and is reimbursed by the employer according to plan design

with submission of a receipt of payment or standard ADA form.

To compete with other models DA encourages the dentist to

accept assignment, thus lowering the office visit cost to the patient

in the hope that this feature favors acceptance of treatment. Plan

reimbursement back to the dentist is normally within two weeks.

Some DA plans have a dentist-patient co-payment feature per

claim to offset the administrative cost so as to compete more

favorably with lower cost managed care plans. This feature is not

desirable in an orthodontic practice with monthly billing; therefore,

it is advisable to file a claim quarterly or semi-annually to reduce

the number of claim withholds that the dentist and patient contrib-

ute on each claim ($5/claim/dentist-$10/claim/patient).

The idea behind the dentist/patient co-pay/claim is that only

those who benefit from dental services pay for the administration

whereas, in other models, patients are paying for plan administra-

tion whether used or not. It was a reasonable way to lower the

premium on a plan favorable to employer, employee, and dentist so

that fee-for-service could be competitive in a managed care envi-

ronment and not compromise or limit benefits. One must remem-

ber that in managed care the dentist is in reality subsidizing the

plan by agreeing to a 20-25% discounted fee. DA allows for a $5

per claim subsidy from the dentist and a $10 per claim subsidy

from the patient as a cost of business to run the plan. The dentist

always receives 95- 97% of his fee, not really different from the

cost of accepting credit cards for payment. This feature may not be

as critical an issue as it once was when managed care growth was

causing great anxiety in the profession and there was a need to

compete. That is one reason DA was developed. The other reason

DA was developed was an attempt to overcome some of the objec-

tions to DR and make it more attractive in the marketplace. The

30-year history to keep DR alive and well in the face of overwhelm-

ing opposition from insurance companies is one of heroic relent-

less tenacity by organized dentistry at all levels. Substantial gains

for DR/DA as a percentage of the total covered patients over the

last five years are very encouraging and significant.

Self-funded dental plans are not regulated by the Department

of Insurance. These plans are administered under federal ERISA

HELPFUL HINTS FOR


continued

administration?

• Is freedom of choice of

dentist important?

• Is freedom to decide

what dental options you

have important?

• What data has been

used to establish the

UCR fee?

• How often are the fee

levels updated?

• At what percentile is

payment made?

• What percentage of

claims has the plan

denied patient cover-

age?

• How quickly are claims

paid?

• What is the difference

between the table of

allowances and a typical

fee?

• What dental procedures

are excluded?

• What are the restrictive

limitations?

• Is the terminology

consistent with the

ADA’s Current Dental

Terminology?

• What is the percent to

premium commission

paid to brokers?

• Does your insurance

consultant receive a

rebate from the insur-

ance company selected?

• How will the plan be

administered, and how

well will it be adminis-

tered?

• What safeguards are in

place?

• How well does the

benefits manager

understand dental care

–preventative, mainte


18

laws. To offset any supposed risk to the employer who establishes

a self-funded dental plan, TPAs can secure stop-loss coverage to

cover any potential excess claims over premiums. This is another

feature added by DA to make DR more acceptable to employers

who thought self-funding was too risky. As history has proven, very

few plan managers opt for the added expense of stop-loss because

it is rarely necessary unless there is significant adverse selection

(employees never had a dental plan or employees had significant

dental problems and all of them sought complete treatment the

first year of the plan), not a likely scenario but a reasonable fear of

employers.

Managed care model plans use a network of provider orthodon-

tists and discounted fee schedules. There are two types: PPOs

(Preferred Provider Organizations) and HMOs (Health Maintenance

Organizations). These plans have many limitations, restrictions,

and exclusions. Dental Maintenance Organizations (DMOs) and

Prepaid Limited Health Service Organizations (PLHSOs) are charac-

teristic of capitation models whereby the dentist is paid a minimal

monthly payment per capita (head) to provide preventative and

diagnostic services at no charge to patient. The patient pays a

monthly premium for this service to the HMO. Orthodontic service,

if included, is contracted by willing orthodontists who will discount

their “Customary Fee” 25%. Unless the customary fee is docu-

mented and posted for the insured to compare the fee quoted,

there is no check and balance for validation of a true 25% discount

from specialists contracting with the HMO or PLHSO. There is

reason for questioning this arrangement especially if fees are

quoted without including records, retention, breakage, missed

appointments, home care instructions, nutrition counseling,

cleanings etc.

These types of plans are heavily marketed and are popular with

employers because there is no contribution or participation of their

part and they have provided a dental benefit to their employees.

They comprise a large share of the market, and brokers for these

plans are paid much higher commissions than is the case with

alternatives, so it should be no surprise that they have had phe-

nomenal growth. They appeal to the consumer because they

appear to be a bargain.

We need to be diligent in educating patients, human resource

personnel, benefits managers, financial consultants, and executive

officers about possible improvements in benefit designs that

deliver improved performance per dollar spent and give back to

individuals their responsibility and ownership for care decisions.

The better we educate, the closer we will come to the ideal plan

design.

HELPFUL HINTS FOR


continued

nance, major?

• How well does the

insured understand the

dental benefit?

• Is there Peer Review of

complaints?

• Will the employer

implement a flex-plan?

• Is balanced billing

permitted?

• Does the insured know

out-of-pocket costs for

each procedure?

• Is the insured knowl-

edgeable about what

the insurance does not

cover?

• What is the procedure

for dismissing a provider

from a plan?

• On what basis can a

provider be dismissed?

TTTTTrends of Dental Industrrends of Dental Industrrends of Dental Industrrends of Dental Industrrends of Dental Industryyyyy

Presented at National Dental

Benefit Conference sponsored by

the ADA in 2007

•The correlation that the

insurance industry draws

between periodontal disease

and systemic health conditions

will be important for

orthodontists to watch as it

demonstrates the payer’s

recognition of cause and effect.

•New Dollar-Based individual

plans may exclude orthodontic

treatment based on viewpoint

that ortho is “for cosmetics

only” and an unnecessary

“luxury” instead of sound

actuarial decision based on

adverse selection and inherent

risk.

Please refer to “Frequently Asked Questions” for informationabout Flexible Spending Accounts in Chapter 9.


19

ChaptChaptChaptChaptChapter 4: Claims Aer 4: Claims Aer 4: Claims Aer 4: Claims Aer 4: Claims Administrationdministrationdministrationdministrationdministration

In order to allow for prompt re-imbursement from an

insurance company to the patient or the dentist, a current uniform

dental claims form must be completed and submitted to the plan

administrator. Every office should have the ADA Current Dental

Terminology Manual (CDT-7) for the current 2 years. CDT Manuals

are revised every 2 odd-numbered years. CDT 7 is valid until July1,

2009. All Codes on Dental Procedures and nomenclature are

included with numerical codes and descriptors. Orthodontic Codes

(D8000 – D8999) as well as others: Diagnostic, Radiographic,

Imaging, Study Models, Preventive, Non-orthodontic appliances,

etc. will be used when filing a claim form. The manual was

adopted by the ADA in conjunction with the insurance industry. The

CDT is divided into XII major categories, one of which (XI) describes

orthodontic procedures. Procedures not depicted in the CDT or

unusual circumstances must be classified under unspecified

orthodontic code D8999 with a narrative report attached for review

by the plan administrator. Additional documentation may be

requested by the Third Party payer when coded D8999 “by report”.

Be advised, use of 999 codes will result in claim denial.

Orthodontists are not limited to Orthodontic Codes for

services rendered, in fact, it may be to the patient’s advantage to

have records such as radiographs and imaging D0210 – D0350,

diagnostic casts D0470, preventive services D1110 –D1351, and

passive appliances (space maintenance) D1510 –D1550 sepa-

rated from the orthodontic treatment form. Reimbursement to the

patient will maximize their dental insurance benefit when this

advantage is utilized. (NOTE: This practice may not be permissible

in states with orthodontic specialty laws). Other codes describe

splints, stents, night-guards, mouth-guards, bleaching trays, oc-

clusal equilibration, and other procedures used by orthodontists.

The manual is essential for flawless claims administration.

On the standard dental claim form, there are 58 spaces

requesting information. Incomplete or incorrect information can

delay payment to either patient or dentist; however, box #37, is

completed only if the orthodontist is accepting assignment.

The orthodontist’s social security number or tax ID number (T.I.N.)

is nononononot t t t t required under IRS legislation if the patient is reimbursed by

the insurance company. Authorization of assignment of benefits to

the orthodontist (box #37) must be negated by the patient; other-

wise, the reimbursement will be sent to the dentist or the form

returned for the T.I.N. It is worthwhile to stamp or use a sticker

on the form at the appropriate box ( copy of ADA claim form at end

of chapter). The correct response for a misdirected reimbursement

is to return the check to the insurance company with a copy of the

original form clearly indicating the insurance company’s mistake

and also notification to the patient that the insurance company is

delaying his/her reimbursement.

There is no pre-authorization required with orthodontics;

nor is submission of records a requirement. Patients either have or

don’t have orthodontic coverage. NoNoNoNoNo form should be sent until the

DO NOT ACCEPT

ASSIGNMENT OF BENEFITS

SSSSStamp or stictamp or stictamp or stictamp or stictamp or stickkkkker ter ter ter ter to placeo placeo placeo placeo place

on claim fon claim fon claim fon claim fon claim formormormormorm

CAUTION

A dental office has an obligation

to the insurance company to

prove that it has made every

effort to collect the co-payment

portion of the fee that the

patient is responsible for paying.

Records must clearly indicate in

detail the effort made to collect

It is a felony to waive co-pay-

ment for an insured patient and

accept the insurance check as

full payment. The doctor is

guilty of a serious offense even

if his office staff permitted this

to occur to “help” a financially

strapped “loyal” patient without

his/her knowledge. The insur-

ance company must be notified

if the office intends to lower its

fee for any reason so that they

can reduce their reimburse-

ment.

CAUTION

HINT

Randomly check orthodontic

software against a patient

contract to make sure billing/

payments match the contract

terms.

COMMON CCOMMON CCOMMON CCOMMON CCOMMON CAAAAAUSES OFUSES OFUSES OFUSES OFUSES OF

PPPPPAAAAAYMENT DELAYMENT DELAYMENT DELAYMENT DELAYMENT DELAYYYYYS:S:S:S:S:

•Lack of information

•Incorrect coding

•Incorrect or unlabeled

radiographs

•Failure to submit pre-

determination of benefits


20

orthodontist has diagnosed, planned treatment, and determined a

total fee for the case. AAAAAccuratccuratccuratccuratccurate, complee, complee, complee, complee, complettttte fe fe fe fe filing with signatures,iling with signatures,iling with signatures,iling with signatures,iling with signatures,

serserserserservices, codes, and datvices, codes, and datvices, codes, and datvices, codes, and datvices, codes, and dates is essential in order tes is essential in order tes is essential in order tes is essential in order tes is essential in order to ao ao ao ao avvvvvoid delaoid delaoid delaoid delaoid delayyyyyededededed

papapapapayment tyment tyment tyment tyment to patient or oro patient or oro patient or oro patient or oro patient or orthodontist. Lacthodontist. Lacthodontist. Lacthodontist. Lacthodontist. Lack of infk of infk of infk of infk of information orormation orormation orormation orormation or

incorrect infincorrect infincorrect infincorrect infincorrect information is the most common cause of paormation is the most common cause of paormation is the most common cause of paormation is the most common cause of paormation is the most common cause of paymentymentymentymentyment

deladeladeladeladelay and may and may and may and may and may also pry also pry also pry also pry also prompt an inompt an inompt an inompt an inompt an invvvvvestigation bestigation bestigation bestigation bestigation by the insurancey the insurancey the insurancey the insurancey the insurance

carriercarriercarriercarriercarrier. NPI number. NPI number. NPI number. NPI number. NPI numbers bos bos bos bos box #5x #5x #5x #5x #54 are a ne4 are a ne4 are a ne4 are a ne4 are a new requirement fw requirement fw requirement fw requirement fw requirement for reim-or reim-or reim-or reim-or reim-

burburburburbursement.sement.sement.sement.sement.

Some orthodontic offices provide a “SUPER BILL” as an

attachment to the insurance form that explains treatment and fee.

The AAO provides printed Superbills for a nominal charge. They are

a handy record of services rendered.

Reporting incorrect treatment dates for the purpose of

obtaining benefits, false appointments, non-existent treatment,

unnecessary services, and w w w w waivaivaivaivaiver of co-paer of co-paer of co-paer of co-paer of co-payment byment byment byment byment by the patient arey the patient arey the patient arey the patient arey the patient are

willful fraudulent violationswillful fraudulent violationswillful fraudulent violationswillful fraudulent violationswillful fraudulent violations for which the dentist will be found

guilty of unethical and criminal practice even if unknowledgeable

about the conspiracy. If the dentist treats a close friend or relative

with insurance and notifies the insurance company that co-pay-

ment was forgiven and gives reason; then, there is no ethical

violation and the insurance company will base reimbursement on

their percent of their fee for that code. If a dentist is not participat-

ing in managed care, but wishes to treat patients covered by these

plans, it is ethical for the dentist to choose to lower his usual fee

and accept the discounted fee reimbursed by the dental plan.

It is unethical for a dentist to increase a fee to a patient

because they are covered by insurance. It is unethical if the dentist

incorrectly describes a dental procedure so as to make it appear to

be covered under a dental plan or does any unnecessary dental

care. See the AAO Code of Ethics at the end of this chapter. One

erroneous claim form to benefit either patient or dentist by a few

hundred dollars could never be worth losing the license to practice

orthodontics.

Filing claims electronically is fast becoming the standard

practice in dental offices. It is a faster, more efficient (less office

time) and reimbursement turnaround time is reduced. Any error

is immediately identified and correctable instantly. However, this

practice can only be used in offices that accept assignment. Paper

forms must be submitted if the office doesn’t accept assignment.

Another future benefit to electronic claims will be immediate

transfer of funds into the orthodontist’s bank account, thus assur-

ing prompt payment. The downside of electronic claims transmis-

sion is that the orthodontic office is then under allallallallall Federal HIPAA

Rules and Regulations; whereas, offices that submit paper claims

are exempt (for the time being) unless that office has outsourced

claims management to a clearinghouse to convert to electronic

billing. The minimum fee is now $35/month for 80 claims or less

– above 80 claims its $0.35/claim, less than the postage for a

paper claim. Dr. Scott Trapp, a general dentist from Omaha, devel-

oped a spreadsheet that showed his office saved over $200/week

by filing 48 claims electronically instead of by paper. Reimburse-

ment was transferred to his account in seconds.

CAUTION

WHEN DISPUTING A CLAIM:

Always keep a phone log of

date, time and person spoken to

when calling insurance compa-

nies. Ask for the name of their

licensed dental consultant and

how he/she is qualified to be an

orthodontic consultant. If

possible, record the conversa-

tion and tell them before hand

that in your opinion you are

seeking to prove the company

has abused the claim and you

are reporting them to the State

Department of Insurance--then

do it!

CAUTION

On the standard dental claim

form, complete boxes #41 and

#45 only if the orthodontist

accepts assignment of benefits.

HINT

Check with the patient annually

to make sure that the employer

has retained the same dental

insurance plan.

COST CONTCOST CONTCOST CONTCOST CONTCOST CONTAINMENTAINMENTAINMENTAINMENTAINMENT

FEAFEAFEAFEAFEATURES:TURES:TURES:TURES:TURES:

•Restrictions, limitations,

exclusions

•Deductibles

•Co-payment

•Predetermination of

benefits

•Prior Authorization

•Annual Maximums

•Least Expensive Alternate

Treatment

•UCR or Table of Allowances


21


22


23


24


25


26

ADA Principles of ETHICS and Code of PROFESSIONAL CONDUCT

PPPPPAAAAAYYYYYOR ISSUES TOR ISSUES TOR ISSUES TOR ISSUES TOR ISSUES TO REPORT ARE:O REPORT ARE:O REPORT ARE:O REPORT ARE:O REPORT ARE:

•Payment denial /Pre-Treatment authorization denial

•No direct pay to non-participating provider

•Benefit denial

•Delay in payment(s)

•Change in code to less complex or less expensive procedure

•Combined procedure(s) resulting in lower benefit

•Problems with/lack of coordination of benefits

•Requests for additional treatment information/records

•Loss of patient claims or additional treatment information

•Other (please explain)

NOTE: See Forms PDF for templates. Copy the AAO with complaints submitted to the state

insurance commissioner.


27

ElectrElectrElectrElectrElectronic Claims Tonic Claims Tonic Claims Tonic Claims Tonic Claims Transmission—Transmission—Transmission—Transmission—Transmission—To Be Or Noo Be Or Noo Be Or Noo Be Or Noo Be Or Not Tt Tt Tt Tt To Beo Beo Beo Beo Be

bbbbby Dry Dry Dry Dry Dr. James F. James F. James F. James F. James Fergusonergusonergusonergusonerguson

Insurance is a thorny

issue in all of our offices. We all

have at least one employee who

spends their entire work time or

the best part of it dealing with

insurance problems. When I

began my practice in 1973, I

had no patients with orthodon-

tic coverage. Now in 2008,

about 90% of the patients I

treat have some form of orth-

odontic coverage. I have heard

some say that the best way to

handle insurance is to fill out

the forms and give them to the

parents and let them handle it.

I disagree. We are all con-

cerned with public relations and

advertising. What kind of image

do we present to the public

when we say, “We will fill out

your insurance forms for you but

you have to deal with your

insurance company?” The

parents are not educated and

equipped to deal with insurance

companies. Our insurance

clerks are. What better PR than

to handle the insurance prob-

lems for the parents and see to

it that the claims are paid? Yes,

it is a hassle, but the trouble

may be worth it in terms of PR.

Are you tired of your

insurance clerks spending hours

of their time printing paper

claims that require envelopes

and postage to be sent into the

insurance company and be-

cause they are paper claims, the

insurance companies deal with

them last? Now you get to wait

four or five weeks to be paid or

to find out that something was

not filed properly and the

process begins again. Elec-

tronic claims transmission is the

answer.

What’s that you say,

“You don’t have a computer”?

No problem! You can send the

paper claims in a batch to a

middleman (e.g. WebMD) and

they will file them electronically

for you. The cost is 35 cents per

claim. If the data is incorrect,

they will let you know right away

and may possibly make the

corrections right over the phone.

If you already own a

computer and you are using it to

produce the paper claims,

WebMD can map the output of

your program and instead of

printing a paper claim, you

direct the computer to print to a

file and then you transmit the

file to WebMD over a phone line.

If you have standard

practice management software,

it already has the map of your

data and it will be very simple to

set up electronic claims trans-

mission.

There are other compa-

nies like WebMD, but I am not

familiar with them. They should

all be similar, but price shop-

ping is in order. WebMD is the

only company that will map non-

standard office management

software (something other than

Orthosoft, Orthochart, etc.).

I have been filing elec-

tronic claims for about five

years and I am very pleased.

The staff member who files the

insurance claims spends about

1/3 the time she used to spend

dealing with claims filing. We

know immediately if some

information is not correct

because the claims will be

rejected before they can be filed

and the program will tell you

where the error occurred. You

make a simple fix and immedi-

ately resubmit it. The turn

around in terms of how quick

you get your money is usually 7

to 14 days. No envelopes and

postage are required and if you

add up the time saved and

utilized doing something else,

the savings are tremendous.

As far as I know all

insurance companies accept

electronic claims. If you elec-

tronically file a claim on a

company that does not yet

accept electronic transmission,

WebMD will file a paper claim

for you. There is a minimum fee

paid to WebMD every month of

$35. This base fee gives you 80

claims a month. Claims in

excess of 80 are billed at 35

cents per claim.

I think we all need to

realize that insurance is here to

stay and we had better learn to

deal with it. I am NOT saying

join capitation programs or

DMOs or PPOs or any of that

other stuff. I am saying learn

how to effectively and efficiently

file claims and receive payment

as quickly as possible. I think

the target date for all electronic

filing has been pushed back,

but electronic claims is by far

the quickest way for you to get

paid.

What equipment do yWhat equipment do yWhat equipment do yWhat equipment do yWhat equipment do you need tou need tou need tou need tou need tooooo

begin Electronic Tbegin Electronic Tbegin Electronic Tbegin Electronic Tbegin Electronic Trrrrransmissionansmissionansmissionansmissionansmission

of Insurof Insurof Insurof Insurof Insurance Claims?ance Claims?ance Claims?ance Claims?ance Claims?

1. Any computer sold currently

is more than sufficient to file

electronic claims. I file my

claims on a computer running

windows 98.

2. Get as much ram as you can

reasonably afford—at least 512,


28

but preferably 1 gig.

The speed of the ram is signifi-

cant and is dependent on the

motherboard you choose.

3. You will have to have a phone

line modem or a high speed

internet connection to do

electronic claims. Any pre-made

system should come with an

Ethernet connector used for

high speed internet. Either DSL

or cable modems can be used

to transmit insurance data at

this time and they are prefer-

able to a phone line modem.

4. A system you pick should

have a 10/100 /1000 Ethernet

port. This port will allow you to

connect your computers over an

intra-office network and connect

to a high speed internet connec-

tion.

5. The video card in a computer

is very important not only in that

it transmits the video signal to

the monitor, but also it is the

one place the entire computer

can be slowed down or brought

to a halt. The video card should

have at least 32 mb. of ram and

64 would be better.

6. The computer should have

CD-R/RW. This is a CD-ROM

device that will write data to a

blank CD. Writeable CDs are

cheap (about $0.10) and they

will hold 650 mb of data. It is

an excellent storage and archive

media because it is not mag-

netic and the data will not

degrade over a short time. DVD-

R-RW holds more data and the

data will not degrade as quickly.

7. The computer will have one or

two floppy drives. A 3.5” 1.4 mb

floppy disk drive is standard. A

zip drive that holds up to 250

mb of data is a bonus. These

drives store data in a magnetic

format and are good for daily

backups that are over written

once a week. They are not good

for permanent storage because

the magnetic data will degrade

with time. They can also be

erased by a magnetic field.

8. The keyboard and mouse are

just data entry devices unless

you are the person using them.

These two items cause more

carpal-tunnel syndrome than

any other part of a computer.

You should have an ergonomic

keyboard and mouse.

9. The monitor should be large

enough to be seen easily. There

are CRT (cathode ray tube)

monitors that require depth and

LCD (liquid crystal display)

monitors, which take little desk

space. Prices are: 15” CRT is

about $50 while a 19” LCD is

$200.

10. Who do you call? Not Ghost

Busters! Call WebMD in Atlanta.

If enough people are interested

in using WebMD, perhaps we

can get some kind of group rate.

Once you have your computers

installed and you network

running, then you are ready to

take the leap into the world of

electronic insurance claims

filing.

You will need to investigate

those companies that provide

clearinghouse services for

electronic insurance claims

transmission. There are many

such companies and they can

be found in the phone book and

on the Internet. Some will be

local in you area and some will

be remote. I live in middle

Tennessee and use a company

in Atlanta, GA. Location is not

an issue. Price and service are

the issues. Some of the compa-

nies that I have heard of are:

1. WebMD in Atlanta. They

used to be named Mede

America before they

were bought out.

2. Executive Office Alterna-

tives

3. D&M Medical Billing

Service

4. Foothills Medical Billing

I use WebMD and I found the

others by using Search on the

Internet browser. I had a conver-

sation with WebMD on Thursday

August 1, 2002 and after

jumping through several hoops,

I learned the following:

1. They no longer will send

out stand-alone software

to those who do not

have practice manage-

ment software. You will

have to have some kind

of practice management

software. Talk to your

friends and learn from

their experiences. Call

all of the companies

(there are fewer and

fewer every day) and ask

a lot of questions.

2. They will still map1 non-

standard software

(software written espe-

cially for you – software

other than Ortho-soft,

Orthochart, etc.; how-

ever, they do this on a

case-by-case basis. It

depends on what output

the software delivers). I

did this when I started

with MedeAmerica


29

(WebMD) and it takes a

little time because you

have to work with the

technician over the

phone to get everything

set up properly. My

guess is that if you have

non-standard software,

you either wrote it or you

are very familiar with

how it works. So you

should have no trouble

working with the techni-

cian. I did this 10 years

ago and if memory

serves me correctly, it

took about an hour of

my time to get it run-

ning.

3. They already have the

maps for all of the

standard Orthodontic

software programs on

the market. Therefore, if

you use Orthosoft,

Orthochart or some

other standard software,

all you have to do is sign

up and start sending

electronic claims.

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when y when y when y when y when you print an insurou print an insurou print an insurou print an insurou print an insurance fance fance fance fance form (what inform (what inform (what inform (what inform (what information isormation isormation isormation isormation is

put int put int put int put int put into what space). Electronic claims look liko what space). Electronic claims look liko what space). Electronic claims look liko what space). Electronic claims look liko what space). Electronic claims look like papere papere papere papere paper

claims without the titles t claims without the titles t claims without the titles t claims without the titles t claims without the titles to the fo the fo the fo the fo the fields.ields.ields.ields.ields.

CAUTION

Be sure to ask your orthodontic

software provider to certify that

the software is HIPAA compli-

ant.

When you file your first insur-

ance claim electronically, you

immediately become liable for

all of the tenants of HIPAA. If

you have ever filed an electronic

insurance claim in the past, you

are subject to HIPAA. Even if

you don’t file electronic insur-

ance claims now, you may

eventually become subject to

HIPAA. So do you hide from

HIPAA and give up the speed

and convenience and cost

savings of electronic claims or

do you jump in and figure HIPAA

will find you eventually anyway?

CAUTION

How To Treat Patients, Get Paid and Not Feel Guilty

By Dr. Harold Enoch

Recently, I needed some

bodywork done on my car. I

went to a highly recommended

repair shop and got an esti-

mate. Since I wanted my

vehicle to look nice again and I

felt the estimate was reason-

able and affordable, I had the

work done. Upon completion, I

looked over the work, paid the

bill, and drove off happy in my

beautiful car.

Do you think the techni-

cian felt guilty about taking my

money for a job well done? No,

he did not…because that is his

business.

My staff and I feel the

same way about orthodontics.

People come to us to repair

improper tooth alignment and

occlusions as well as to modify

poor skeletal and neuromuscu-

lar growth patterns. We give

them a quote on how much

treatment (including follow-ups)

will cost, and if the patient

decides the estimate is reason-

able and affordable, they ask us

to proceed. The treatment is

completed, the bill is settled,

and the patient drives off happy

with a beautiful smile and an

improved bite.

We don’t feel guilty for a

job well done…because that’s

our business. And, we don’t feel

badly because our office doesn’t

accept insurance. That is not

our business.

There are four common

“assignment-or-die” myths held

by most orthodontic offices:

• “We won’t get paid for our

work without insurance.”

(Not true. Patients come to

your office because of the

expertise available, not your

price list.)

• “We won’t attract patients

otherwise.” (Not true. Most

patients are referred to your

office by their dentists, not

your insurance policy.)

• “We are responsible for

making payment for our

services easier for our

patients.” (Not true. You’re

only responsible to provide

the best orthodontic care

possible, period!)

• “We might as well accept

insurance assignments,

most of our competitors do.”

(Not true. You’d be sur-

prised how many offices in


30

your area do not. Go ahead,

please call around.)

Insurance, per se, is not bad.

In fact, for some patients, it is

the difference between afford-

ing orthodontic work or not.

However, your office is in no way

required to accept insurance

and/or responsible for handling

the corresponding paperwork.

And you shouldn’t feel guilty for

operating that way. Here’s why:

o You practice orthodontics

and only orthodontics.

You treat patients; they pay

you for your services. If they

have insurance, they com-

plete a claim form, submit

it, and are reimbursed. A

quick, clean, simple pro-

cess.

o You shouldn’t have to

worry about who is cov-

ered and how much.

Patients either have insur-

ance or they don’t. And, in

most cases, insurance only

covers 50% of orthodontic

care up to a certain dollar

amount (usually $1500),

with the patient responsible

for the difference in costs.

o You don’t have to run your

office like a medical

practice. Medical insur-

ance is a doctor-to-insurance

company system. Contracts

ensure that if an MD follows

an established diagnosis/

treatment protocol, he or

she receives a pre-agreed

payment. A patient simply

contributes a co-payment;

the doctor is responsible for

obtaining reimbursement.

Dental insurance is a pa-

tient-to-insurance company

system. Generally, orth-

odontists are not contracted

to insurance companies.

They receive payment from

the patient; the patient is

responsible for obtaining

reimbursement. (However,

you can make it easier for

the patient by providing an

Attending Orthodontic

Statement that notes the

problem, required treat-

ments, and fees.)

o You have no leverage with

insurance companies.

Insurance companies

respond to their customers

or your patient’s employers.

They do not respond to you.

Thus, the best person to

handle an insurance prob-

lem (should one develop) is

your patient’s human

resource professional. He or

she can leverage the “make-

us-happy-or-we’ll-look

elsewhere-at-renewal-time”

position.

o You don’t have the time,

staff, or resources to

manage insurance paper-

work and inevitable

difficulties. Your office is

designed to provide the best

possible patient care.

Accepting assignment

means substantial addi-

tional paperwork, extra

billing, intricate accounting,

exhausting phone calls,

disgruntled patients, and an

additional employee or two,

an extra computer or two,

and office space to handle

all of this adequately.

o You can keep fees down.

Accepting assignment

means extra work. Extra

work means higher over-

head. Higher overhead

means higher fees.

Now then, how can you

educate your patients about

your insurance policy and help

them understand that it’s to

their best advantage to reim-

burse personally their insurance

claims?

Simply…

ü ENSURE a treatment

coordinator meets with

each new patient to review

and explain all office

policies.

ü EXPLAIN the insurance

policy in terms that promote

how advantageous it is for

the patient to work with the

insurance company directly

rather than through you, i.e.,

it is easier, faster, and the

patient has a better lever-

age position, etc.

ü PRESENT the patient with a

letter at initial consultation

that explains all office

policies, including the

insurance guidelines.

ü PROVIDE a brief statement

about insurance policy on

your website.

ü OFFER a “super bill” that

explains treatment and

provides cost breakdown for

attachment to insurance

form the patient submits for

reimbursement. (In orth-

odontics, patients only need

to submit one claim once.

The insurance company

then sets up an automatic

payment schedule.)

ü CONSIDER using a software

program that automatically

generates insurance forms

for patients to submit.

Remember, people come to

you to make their smiles beauti-

ful or to improve their bite.

Don’t hesitate to be up front

about insurance, do your job

well, and don’t feel guilty that

your office doesn’t accept

insurance assignment.

Incidentally, my car looks

great!!!


31

ChaptChaptChaptChaptChapter 5: er 5: er 5: er 5: er 5: HIPHIPHIPHIPHIPAAAAAAAAAA

The Health Insurance Portability and Accountability Act of 1996

(HIPAA) is federal law that applies to healthcare providers. It

provides for insurance portability, privacy and the security of

healthcare information, and imposes administrative regulations on

healthcare providers. Orthodontists who transmit insurance claim

forms electronically are providers who must be in compliance.

1. One intent is to improve the efficacy and effectiveness of the

health care system by establishing standards and requirements

for electronic transmission of health information to realize

significant cost savings.

2. The sending and receiving of electronic health care transac-

tions requires privacy and security standards for plans, individu-

als, employers, and providers.

3. Being out of compliance means risk of federal criminal fines

($50,000-$250,000) and penalties (1-10 years in jail).

4. Final rules state that health plans, clearing-houses, and provid-

ers that transmit any health information in electronic form in

connection with a covered transaction must be in compliance.

In addition, other individuals/organizations who perform a

function or activity on behalf of a covered entity may by “exten-

sion” be designated as a “business associate” and therefore

must be in compliance. CDT-7 Dental Procedure Codes must be

used. SNODENT codes have been abandoned thanks to AAO

efforts.

5. Each dentist will apply for and receive a National Provider

Identifier (NPI). Your NPI, Social Security number, and Tax ID

number will be needed for any claim to any payee.

6. Providers must obtain a patient’s written consent before using

or disclosing the patient’s health information for purposes of

treatment, payment, or healthcare operations (TPO). This form

is different from and separate from an informed consent to

treatment.

7. The Privacy Rule grants patients rights on use and disclosure of

their protected health information (PHI, see glossary) and

recourse to patients whose privacy is violated. It addresses the

need for patient education about their rights and written

explanations that must be supplied and available to patients.

PHI may be disclosed without patient consent under certain

specific legal/criminal situations.

8. A “privacy officer” must be designated in your office to imple-

ment the policies and procedures, train staff, and protect PHI

from disclosures.

9. Physical safeguards for security in safeguarding health informa-

tion and the building they reside in must be documented for the

maintenance and/or destruction of documents and records.

10. The regulation may impose data encryption and other restric-

tions for telephone and Internet transactions (open networks).

Security is not yet final.

CAUTION

CAUTION

If an orthodontic office has ever

filed an electronic claim for

reimbursement, that office must

be HIPAA compliant even if it

was to stop immediately and

return to paper-filed claims. It is

too late!

We have addressed the advan-

tages of electronic claims filing,

but offices may want to think

twice about instituting this fast,

efficient method because of the

requirements to be totally

compliant with HIPAA.

HIPHIPHIPHIPHIPAA COAA COAA COAA COAA COVERED ENTITIESVERED ENTITIESVERED ENTITIESVERED ENTITIESVERED ENTITIES

•A health care provider that

conducts certain transactions

in electronic form

•A health care clearinghouse

•A health plan


32

HIPAA is a complex law. Legal counsel and AAO/ADA updates

will provide advice and explanation for issues that arise in your

practice. For more information, access website: www.hhs.gov/ocr/

hipaa

ADA developed a Privacy Kit that will give you the facts and

tools needed for compliance. It is available for $125. To purchase

a kit, call (800) 947-4746 or visit the ADA’s Web site, www.ada.org.

Basic requirements fBasic requirements fBasic requirements fBasic requirements fBasic requirements for compliance with HIPor compliance with HIPor compliance with HIPor compliance with HIPor compliance with HIPAA RAA RAA RAA RAA Rules:ules:ules:ules:ules:

1. Designate a privacy officer for your practice.

2. Protect confidential information and practice privacy precau-

tions.

3. Train staff about HIPAA requirements.

4. Write your practice’s privacy notice.

5. The minimum-necessary rule requires an inventory and cat-

egory for confidential information your practice discloses.

6. Use new Consent, Authorization Forms.

7. Comply with the seven core HIPAA patients’ rights policies and

procedures.

8. Develop forceful employee sanctions for violations to deter

violations.

9. Sign written contracts with business associates sharing confi-

dential information.

* “Ensure Compliance with HIPAA Privacy, Confidentiality Rules” by

James M. Barclay, J.D. Today’s FDA, Volume 14, NO.6.

AAO members may download HIPAA GUIDE TO PATIENT PRI-

VACY RULES and HHS forms on the AAO member website under

Legal & Advocacy- HIPAA

http://www.aaomembers.org/legal/loader.cfm?url=/commonspot/

security/getfile.cfm&PageID=1274

CAUTION

If an orthodontic office has

never filed an electronic claim

for reimbursement and does not

ever intend to, then that office

does not have to be HIPAA

compliant unless that paper

claim form has to be sent to a

clearinghouse for electronic

encyption. This will likely

become the standard procedure

in time with all insurance claims

since this is the objective.

QUESTIONS FQUESTIONS FQUESTIONS FQUESTIONS FQUESTIONS FOR ORTH-OR ORTH-OR ORTH-OR ORTH-OR ORTH-

ODONTIC MANAODONTIC MANAODONTIC MANAODONTIC MANAODONTIC MANAGEMENTGEMENTGEMENTGEMENTGEMENT

SOFTSOFTSOFTSOFTSOFTWWWWWARE VENDORSARE VENDORSARE VENDORSARE VENDORSARE VENDORS

WHICH PRWHICH PRWHICH PRWHICH PRWHICH PROCESS CLAIMSOCESS CLAIMSOCESS CLAIMSOCESS CLAIMSOCESS CLAIMS

•What are the hardware

and software requirements?

•Can the system transmit

graphics (e.g. charts)?

•Can the system be

updated?

•What are the fees for

electronic claim

processing?

•Does the clearinghouse

have direct access to your

payers?

•What is the expected

turnaround time?


33

ChaptChaptChaptChaptChapter 6: Orer 6: Orer 6: Orer 6: Orer 6: Orthodontic Codesthodontic Codesthodontic Codesthodontic Codesthodontic Codes

The use of codes is a result of a joint effort of the ADA and

the Third Party Payers (insurance industry) to come to terms with

how dentistry wants to provide dental health care and what the

insurance companies are willing to reimburse.

There are 9999 possibilities for much mischief when the

insurance industry demands codes for every billable service or

procedure in dentistry. There is tension, frustration, confusion and

exasperation in these marathon meetings to clarify and accurately

define dental procedures so that they are acceptable to both

parties. Nevertheless, there are many areas of ambiguity and

shortcomings in each version of CDT (Current Dental Terminology)

and it will be just as true with CDT- 7 which was the standard in

January 2007.

Codes are always a work in progress and each ADA mem-

ber dentist has a right to submit ideas and reasons for improve-

ments. Codes are the proprietary copyright of the ADA and cannot

be published without their permission and payment, but it is

essential for each office to have the latest copy and abide by them

faithfully in any kind of insured transaction; otherwise, there will be

no reimbursement. The existence of a code does not necessarily

mean that the procedure is a covered or reimbursed benefit in a

dental benefit plan since plans differ in coverage.

Orthodontic offices should be grateful that our specialty

has such few codes and it is to the AAOs councils and committees

credit that such is the case. The insurance industry and the federal

government (HIPAA) always demand more codes for each and

every orthodontic procedure and more paper work to prove we

actually do straighten teeth.

Orthodontic codes are primarily extended treatment

descriptions, not the a la carte per visit codes typical of other

dental fields. The “powers that be” would like to change this

unique expression of our services and have historically attempted

to quantify and qualify what degree of malocclusion would be a

covered entity. Fortunately for our patients, all the scoring

schemes have failed. The Council on Health Care (COHC) of the

AAO has refused to liberalize and expand our codes in meetings

with the ADA and the insurance industry because of the very

implications and impact they have had in other areas of dentistry.

This refusal to bend has frustrated the plans of those who desire to

control all of health care with a system of numbers.

Be advised that there is a wealth of information in the

current issue (CDT –7) that will clarify many issues and answer

questions concerning the ADA Dental Claim Form. Front desk staff

should quickly become familiar with the Glossary of Dental Benefit

Terminology and new clinical staff will benefit from the Glossary of

Common Dental Terms. As an example: some orthodontists might

prefer to do circumferential fiberotomies on rotated teeth rather

than refer to a periodontist and may find it difficult to find the

appropriate code D7291 (transseptal fiberotomy, by report). See

Code Reference Guide on page 101 for proper nomenclature.

HINT

HINT

HINT

HINT

HINT

Code TMJ by using a medical

claim form and AMA Procedure

Codes.

Since orthodontic treatment is a

necessary part of Orthognathic

Surgery and essential to a

successful outcome, it is worth

the effort to include the orth-

odontic treatment as part of the

medical claim. Some carriers

will pay.

To maximize orthodontic ben-

efits, consider procedures that

could be classified and billed

under dental procedures.

The most commonly used codes

used in filing insurance: D8080,

D8070, D8090, D8670.

Some insurance companies

require the original orthodontic

code when filing continuation of

treatment. EXAMPLE: need to

use D8080 every filing rather

than D8670 or in conjunction

with D8670.


34

It may be helpful to patients to code records separately

from the orthodontic treatment by using Diagnostic Codes D0100 -

D0999 for casts, imaging and radiographs. And not check Box #40

as orthodontic treatment -diagnostic data collection is not treat-

ment.

The issue is interpreting box #40. Taking Diagnostic records

is not technically treatment. It could be reimbursed under the

patients dental benefit instead of the maximum orthodontic

benefit. This attempt to maximize the ortho benefit is not an ethical

issue but an attempt to place procedures in their proper categories.

Likewise, the fees for extractions, exposure of canines or place-

ment of TAD’s should not be deducted from the limited orthodon-

tics benefit. These ongoing issues are not resolved with Third Party

Payees. It is in the Third Party Payees financial interest to invade

the orthodontic benefit with all adjunctive procedures related to

orthodontic treatment.

Preventive Codes D1000 - D1999 may be appropriate on

occasion as well as Prosthetics Codes D5951 – D5999.

Miscellaneous Services D9910 – D9999 will be frequently

utilized in orthodontic treatment: mounted cases, athletic

mouthguards, occlusal splints, occlusal adjustments, external

bleaching to name a few.

All this is to say that proper coding for procedures will

provide each patient with their maximum benefit under most third

party plans.

The American Medical Associations’ Current PrCurrent PrCurrent PrCurrent PrCurrent Proceduraloceduraloceduraloceduralocedural

TTTTTerminology Codes erminology Codes erminology Codes erminology Codes erminology Codes –7th edition (CPT–7CPT–7CPT–7CPT–7CPT–7) could be utilized for TMJ

services if denied under a dental plan. Exams, consultations,

diagnostic, physical therapy, equilibration, and splint therapy might

be better addressed through Medical Insurance. Oral Surgeons

make use of these codes routinely.

Remember the 9999 possibilities and think about what if

dentistry had diagnostic codes like medicine. Such is the case with

SNODENT (Systemized Nomenclature of Dentistry) developed by

the ADA for defining dental disease in an electronic environment

and waiting in the wings in case government financing of dental

health care demands it. At present, on paper, there are some

4,000 new codes that could be put into effect unless organized

dentistry draws some lines in the sand and stops this ad nauseas

assault of minutia. For the time being, SNODENT is a non-issue,

but HIPAA regulations are just beginning and the intentions of Third

Party intervention is always more codes, more paperwork, and

more control similar to medicine.

If the ADA succumbs to federal government pressure for

diagnostic codes because of HIPAA legislation, then we could suffer

the consequences. Support of the AAOPAC allows proponents to

advocate for issues that assure orthodontists can treat patients

with the highest standard of care.

To order the ADA CDT Code

Book, call (800) 947-4746


35

ChaptChaptChaptChaptChapter 7er 7er 7er 7er 7: : : : : Offices of State Insurance Commissioners

ALABAMAALABAMAALABAMAALABAMAALABAMA

Alabama Dept. of Insurance

201 Monroe St. Suite 1700

Montgomery, AL 36104

In State: 1-800-433-3966

Phone: 334-269-3550

Fax: 334-241-4192

Website: aldoi.org

FLFLFLFLFLORIDORIDORIDORIDORIDAAAAA

Florida Dept. of Insurance

200 East Gaines Street

Tallahassee, FL 32399-0300

In State: 1-800-342-2762

Phone: 850-413-3100

Fax: 850-413-2950

Website and/or E-Mail:

www.doi.state.fl.us

GEORIGGEORIGGEORIGGEORIGGEORIGAAAAA

Georgia Insurance and Safety

Fire Commissioner’s Office

Dept. of Consumer Services

Two Martin L. King, Jr. Drive

716 West Tower

Atlanta, GA 30334

Toll Free: 1-800-656-2298

Phone: 404-656-2070

Fax: 404-657-8542


www.inscomm.state.ga.us

KENTUCKYKENTUCKYKENTUCKYKENTUCKYKENTUCKY

Kentucky Dept. of Insurance

PO Box 517

215 West Main St.

Frankfort, KY 40602-0517

Toll Free: 1-800-595-6053

Phone: 502-564-6034

Fax: 502-564-6090


www.doi.state.ky.us

LLLLLOUISIANAOUISIANAOUISIANAOUISIANAOUISIANA

Louisiana Dept. of Insurance

PO Box 94214

Baton Rouge, LA 70804-9214

In State: 1-800-259-5300

Phone: 225-342-0895

Fax: 225-342-3078 or 225-342-

0895


www.ldi.state.la.gov

MISSISSIPPIMISSISSIPPIMISSISSIPPIMISSISSIPPIMISSISSIPPI

Mississippi Dept. of Insurance

Consumer Service Division

PO Box 79

Jackson, MS 39205-0079

In State: 1-800-562-2957

Phone: 601-359-3569

Fax: 601-359-1077


www.doi.state.ms.us

NORTH CNORTH CNORTH CNORTH CNORTH CARARARARAROLINAOLINAOLINAOLINAOLINA

North Carolina Dept. of Insur-

ance

PO Box 26387

Raleigh, NC 27611

In State: 1-800-546-5664

Phone: 919-733-2032

Fax: 919-733-0085


[email protected]

SOUTH CSOUTH CSOUTH CSOUTH CSOUTH CARARARARAROLINAOLINAOLINAOLINAOLINA

South Carolina Dept. of Insur-

ance

PO Box 100105

Columbia, SC 29202-3105

In State: 1-800-768-3467

Phone: 803-737-6160

Fax: 803-737-6231


[email protected]

TENNESSEETENNESSEETENNESSEETENNESSEETENNESSEE

Tennessee Dept. of Commerce

and Insurance

Volunteer Plaza

500 James Robertson Parkway

Nashville, TN 37243-0574

In State: 1-800-342-4029

Phone: 615-741-2218

Fax: 615-532-7389


www.state.tn.us

VIRVIRVIRVIRVIRGINIAGINIAGINIAGINIAGINIA

Virginia State Corporation

Commission

Bureau of Insurance

PO Box 1157

Richmond, VA 23218

In State: 1-800-552-7945

Phone: 804-371-9691

Fax: 804-371-9944


www.state.va.us\scc

WEST VIRWEST VIRWEST VIRWEST VIRWEST VIRGINIAGINIAGINIAGINIAGINIA

West Virginia Office of the

Insurance Commissioner

PO Box 50540

Charleston, WV 25305-0540

Toll Free: 1-800-642-9004

Phone: 304-558-3354 x 2

Fax: 304-558-0412


www.state.wv.us

Each state has a law governing

the turn around time for reim-

bursement once an accurate,

complete claim form has been

received. Florida now has a 14-

workday turn around law; a 28-

45 day law is common in other

states. Ten percent interest can

be charged againsst any insur-

ance company for delinquent

days of reimbursement. Prob-

lems of any nature can best be

addressed if a complaint is filed

with the state insurance com-

missioner with copies sent to

the patient and insurance

company. Insurance companies

do not like to be reported and it

is a disservice to the profession

by not taking advantage of this

redress of grievances.

HINT


36

procedure whereby a benefi-

ciary/patient authorizes the

administrator of the program to

forward payment for a covered

procedure directly to the treat-

ing dentist.

Attending Dentist’s State-

ment: Also known as the ADA

Dental Claim Form. A form

used to report dental proce-

dures to a third-party payer, the

claim form was developed by

the American Dental Associa-

tion.

Audit: An examination of

records or accounts to check

their accuracy. A post-treat-

ment record review or clinical

examination to verify informa-

tion reported on claims.

BBBBB

BAC: Business Associate

Contract under HIPAA.

Bad Faith Insurance Prac-

tices: The failure of an insur-

ance company to deal with a

beneficiary of a dental benefit

plan fairly and in good faith; an

activity which impairs the right

of the beneficiary to receive the

appropriate benefits of a dental

benefit plan or to receive them

in a timely manner.

Some ExSome ExSome ExSome ExSome Examamamamamples of bad faithples of bad faithples of bad faithples of bad faithples of bad faith

insurinsurinsurinsurinsurance prance prance prance prance practices include:actices include:actices include:actices include:actices include:

evaluating claims based on

standards which are signifi-

cantly at variance with the

standards of the community;

failure to properly investigate a

claim for benefits; and unrea-

sonably and purposely delaying

and/or withholding payment of

a claim.

ChaptChaptChaptChaptChapter 8: Glossarer 8: Glossarer 8: Glossarer 8: Glossarer 8: Glossary of Dental Benefy of Dental Benefy of Dental Benefy of Dental Benefy of Dental Benefit Tit Tit Tit Tit Terminologyerminologyerminologyerminologyerminology(used with permission of the American Dental Association)(used with permission of the American Dental Association)(used with permission of the American Dental Association)(used with permission of the American Dental Association)(used with permission of the American Dental Association)

A

Administrator: One who

manages or directs a dental

benefit program on behalf of

the program’s sponsor. (See

Third Party Administrator).

Administrative Costs: Over-

head expenses incurred in the

operation of a dental benefit

program, exclusive of costs of

dental services provided.

Administrative Services Only

(ASO): An arrangement under

which a third party, for a fee,

processes claims and handles

paperwork for a self-funded

group. This frequently includes

all insurance company services

(actuarial services, underwrit-

ing, benefit description, etc.)

except assumption of risk.

Adverse Selection: A statisti-

cal condition within a group

when there is a greater demand

for dental services and/or more

services necessary than the

average expected for that group.

Allowable Charge: The maxi-

mum dollar amount on which

benefit payment is based for

each dental procedure.

Alternate Benefit: A provision

in a dental plan contract that

allows the third-party payer to

determine the benefit based on

an alternative procedure that is

generally less expensive than

the one provided or proposed.

Alternative Benefit Plan: A

plan, other than a traditional

(fee-for-service, freedom-of-

choice) indemnity or service

corporation plan, for reimburs-

ing a participating dentist for

providing treatment to an

enrolled patient population.

Alternative Delivery System:

An arrangement for the provi-

sion of dental services in other

than the traditional way (e.g.,

licensed dentist providing

treatment in a fee-for-service

dental office).

American Association of

Orthodontists (AAO): an

advocate group for orthodon-

tists. about 95 % of US orth-

odontists are members. Orth-

odontists are specialists in the

diagnosis, prevention and

treatment of orthodontic prob-

lems. Orthodontists are required

to complete a minimum of two

academic years of study in an

accredited orthodontic resi-

dency program after dental

school.

American Dental Association

(ADA): An advocacy group that

promotes Oral Health Care to

the public while representing

the dental profession. The ADA

is the world’s largest and oldest

national dental association.

Any Willing Provider: Legisla-

tion that requires managed care

organizations (MCOs), such as

health maintenance organiza-

tions (HMOs) and preferred

provider organizations (PPOs) to

contract with any providers,

from physicians and hospitals to

pharmacists and chiropractors,

who are willing to meet the

terms of the contract.

Assignment of Benefits: A


37

Balance Billing:Balance Billing:Balance Billing:Balance Billing:Balance Billing: Billing a

patient for the difference

between the dentist’s actual

charge and the amount reim-

bursed under the patient’s

dental benefit plan.

Beneficiary: A person who

receives benefits under a dental

benefit contract. (See also

CoCoCoCoCovvvvvered Pered Pered Pered Pered Pererererersonsonsonsonson, InsuredInsuredInsuredInsuredInsured,

MemberMemberMemberMemberMember, SubscriberSubscriberSubscriberSubscriberSubscriber).

Benefit: The amount payable

by a third party toward the cost

of various covered dental

services or the dental service or

procedure covered by the plan.

Benefit Booklet: A booklet or

pamphlet provided to the

subscriber, which contains a

general explanation of the

benefits and related provisions

of the dental benefit program.

Also known as a SummarSummarSummarSummarSummary Plany Plany Plany Plany Plan

DescriptionDescriptionDescriptionDescriptionDescription.

Benefit Plan Summary: The

description or synopsis of

employee benefits required by

ERISA to be distributed to the

employees.

Birthday Rule: Coordination of

benefits regulation stipulating

that the primary payer of ben-

efits for dependent children is

determined by the parent’s date

of birth. Regardless of which

parent is older, the dental

benefit program of the parent

whose date of birth falls first in

a calendar year is considered

primary. (May not apply to self-self-self-self-self-

funded prfunded prfunded prfunded prfunded programsogramsogramsogramsograms).

Bundling of Procedures: The

systematic combining of distinct

dental procedures by third-party

payers that results in a reduced

benefit for the patient/benefi-

ciary.

Business Associate: A person

who performs or assists in the

performance of a function or

activity involving the use or

disclosure of individually identi-

fiable health information.

“Business Associate” includes

legal, actuarially, accounting,

consulting, data aggregation,

management, administrative,

accreditation, or financial

services. Functions of business

associates include: (1) claims

processing or administration,

(2) data analysis, processing, or

administration, (3) utilization

review, (4) quality assurance, (5)

billing, (6) benefit management,

(7) practice management, (8)

repricing.

By Report: A narrative descrip-

tion used to report a service

that does not have a procedure

code or is specified in a code as

“by report”; may be requested

by a third-party payer to provide

additional information for

claims processing.

C

Cafeteria Plan: Employee

benefit plan in which employees

select their medical insurance

coverage and other nontaxable

fringe benefits from a list of

options provided by the em-

ployer. Cafeteria plan partici-

pants may receive additional,

taxable cash compensation if

they select less expensive

benefits. (Sometimes FleFleFleFleFlex Planx Planx Planx Planx Plan

or 50or 50or 50or 50or 501c3a1c3a1c3a1c3a1c3a)

Capitation: A capitation

program is one in which a

dentist or dentists contract with

the programs’ sponsor or

administrator to provide all or

most of the dental services

covered under the program to

subscribers in return for pay-

ment on a per-capita basis.

Carrier: See Third PThird PThird PThird PThird Pararararartytytytyty.

Case Management: The

monitoring and coordination of

treatment rendered to patients

with specific diagnoses or

requiring high cost or extensive

services.

Centers for Medicare and

Medicaid Services (CMS,

formerly HCFA): federal

agency within the Department

of Health and Human Services

(HHS) whose mission is to

ensure effective, up-to-date

health care coverage and to

promote quality care for benefi-

ciaries covered by Medicare and

Medicaid programs.

Certificate Holder:

1) The person, usually the

employee, who represents the

family unit covered by the

dental benefit program; other

family members are referred to

as “dependents.”

2) Generally refers to a sub-

scriber of a traditional indem-

nity program.

3) In reference to the program

for dependents of active-duty

military personnel, the certifi-

cate holder is called the spon-

sor. (See SubscriberSubscriberSubscriberSubscriberSubscriber).

Claim:Claim:Claim:Claim:Claim:

1) A request for payment under

a dental benefit plan.

2) A statement listing services

rendered, the dates of

services, and itemization of

costs. Includes a statement

signed by the beneficiary

and treating dentists that

services have been ren-


38

bursed; and

2) contracts between a dental

benefit organization and a

group plan sponsor. These

contracts typically describe

the benefits of the group

plan and the rates to be

charged for those benefits.

Contract Dentist: A practitio-

ner who contractually agrees to

provide services under special

terms, conditions and financial

reimbursement arrangements.

Contract Fee Schedule Plan:

A dental benefit plan in which

participating dentists agree to

accept a list of specific fees as

the total fees for dental treat-

ment provided.

Contract Practice: Dental

practice in which an employer or

third-party administrator con-

tracts directly with a dentist or

group of dentists to provide

dental services for beneficiaries

of a plan (See Closed PClosed PClosed PClosed PClosed Panelanelanelanelanel).

Contract Term: The period of

time, usually 12 months, for

which a contract is written.

Contributory Program: A

dental benefit program in which

the enrollee shares in the

monthly premium of the pro-

gram with the program sponsor

(usually the employer). Gener-

ally done through payroll deduc-

tion.

Coordination of Benefits

(COB): A method of integrating

benefits payable for the same

patient under more than one

plan. Benefits from all sources

should not exceed 100% of the

total charges.

Co-payment: Beneficiary’s

dered. The completed form

serves as the basis for

payment of benefits.

Claimant: Person who files a

claim for benefits. May be the

patient or the certificate holder.

Claim Form: The form used to

file for benefits under a dental

benefit program; includes

sections for the patient and the

dentist to complete.

Claims Payment Fraud: The

intentional manipulation or

alteration of facts submitted by

a treating dentist resulting in a

lower payment to the benefi-

ciary and/or the treating dentist

than would have been paid if

the manipulation had not

occurred.

Claims Reporting Fraud: The

intentional misrepresentation of

material facts concerning

treatment provided and/or

charges made, in that this

misrepresentation would cause

a higher payment.

Closed Panel: A closed panel

dental benefit plan exists when

patients eligible to receive

benefits can receive them only if

services are provided by den-

tists who have signed an agree-

ment with the benefit plan to

provide treatment to eligible

patients. As a result of the

dentist reimbursement methods

characteristic of a closed panel

plan, only a small percentage of

practicing dentists in a given

geographical area are typically

contracted by the plan to pro-

vide dental services.

Coinsurance: A provision of a

dental benefit program by which

the beneficiary shares in the

cost of covered services, gener-

ally on a percentage basis. The

percentage of a covered dental

expense that a beneficiary must

pay (after the deductible is

paid). A typical coinsurance

arrangement is one in which the

third party pays 80% of the

allowed benefit of the covered

dental service and the benefi-

ciary pays the remainder of the

charged fee. Percentages vary

and may apply to table of

allowance plans; usual, custom-

ary, and reasonable plans; and

direct reimbursement pro-

grams.

COBRA (Consolidated Omni-

bus Budget Reconciliation

Act): Legislation relative to

mandated benefits for all types

of employee benefit plans. The

most significant aspects within

this context are the require-

ments for continued coverage

for employees and/or their

dependents for 18 months who

would otherwise lose coverage

(30 months for dependents in

the event of the employee’s

death).

Contract: A legally enforceable

agreement between two or

more individuals or entities that

confers rights and duties on the

parties. Common types of

contracts include:

1) contracts between a dental

benefit organization and an

individual dentist to provide

dental treatment to mem-

bers of an alternative

benefit plan. These con-

tracts define the dentist’s

duties both to beneficiaries

of the dental benefit plan

and the dental benefit

organization, and usually

define the manner in which

the dentist will be reim-


39

share of the dentist’s fee after

the benefit plan has paid. Can

also be an up front office visit

charge.

Cost Containment: Features

of a dental benefit program or

of the administration of the

program designed to reduce or

eliminate certain charges to the

plan.

Cost Sharing: The share of

health expenses that a benefi-

ciary must pay, including the

deductibles, co-payments,

coinsurance, and charges over

the amount reimbursed by the


Coverage: Benefits available to

an individual covered under a


Covered Charges: Charges for

services rendered or supplies

furnished by a dentist that

qualify as covered services and

are paid for in whole or in part

by the dental benefit program.

May be subject to deductibles,

co-payments, coinsurance,

annual or lifetime maximums,

as specified by the terms of the

contract.

Covered Person: An individual

who is eligible for benefits

under a dental benefit program.

Covered Services: Services for

which payment is provided

under the terms of the dental

benefit contract.

Current PrCurrent PrCurrent PrCurrent PrCurrent Procedural Tocedural Tocedural Tocedural Tocedural Terminologyerminologyerminologyerminologyerminology

(CPT)(CPT)(CPT)(CPT)(CPT): A listing of descriptive

terms and identifying codes

developed by the American

Medical Association (AMA) for

reporting practitioner services

and procedures to medical

plans and Medicare.

Customary Fee: The fee level

determined by the administrator

of a dental benefit plan from

actual submitted fees for a

specific dental procedure to

establish the maximum benefit

payable under a given plan for

that specific procedure. (See

also Usual FUsual FUsual FUsual FUsual Feeeeeeeeee and RRRRReasonableeasonableeasonableeasonableeasonable

FFFFFeeeeeeeeee).

D

Deductible: The amount of

dental expense for which the

beneficiary is responsible before

a third party will assume any

liability for payment of benefits.

Deductible may be an annual or

one-time charge, and may vary

in amount from program to

program. (See FFFFFamily Deduct-amily Deduct-amily Deduct-amily Deduct-amily Deduct-

ibleibleibleibleible).

Dental Benefit Plan: Entitles

covered individuals to specified

dental services in return for a

fixed, periodic payment made in

advance of treatment. Such

plans often include the use of

deductibles, coinsurance, and/

or maximums to control the

cost of the program to the

purchaser.

Dental Insurance: A plan that

financially assists in the ex-

pense of treatment and care of

dental disease and accidents to

teeth.

Dental Prepayment: A

method of financing the cost of

dental services prior to their

receipt.

Dental Service Corporation:

A legally constituted, non-for-

profit organization that negoti-

ates and administers contracts

for dental care. Delta Dental

Plans and Blue Cross/Blue

Shield Plans are such plans.

Dependents: Generally spouse

and children of covered indi-

vidual, as defined by terms of

the dental benefit contract.

Direct Billing: A process

whereby the dentist bills a

patient directly for his/her fees.

Direct Reimbursement: A

self-funded program in which

the individual is reimbursed

based on a percentage of

dollars spent for dental care

provided, and which allows

beneficiaries to seek treatment

from the dentist of their choice.

Downcoding: A practice of

third-party payers in which the

benefit code has been changed

to a less complex and/or lower

cost procedure than was re-

ported.

Dual Choice Program: A

benefit package from which an

eligible individual can choose to

enroll in either an alternative

dental benefit program or a

traditional dental benefit pro-

gram. By state statute in

Florida, employers must offer

this program.

E

Eligibility Date: The date an

individual and/or dependents

become eligible for benefits

under a dental benefit contract.

Often referred to as effective

date.

Eligible Person: (See BenefBenefBenefBenefBenefi-i-i-i-i-

ciarciarciarciarciaryyyyy).

Enrollee: Individual covered by


40

the program.

G

Gate Keeper System: A

managed care concept used by

some alternative benefit plans,

in which enrollees select a

primary care dentist, usually a

general practitioner or pediatric

dentist, who is responsible for

providing nonspecialty care and

managing referrals, as appropri-

ate, for specialty and ancillary

care.

H

Health Maintenance Organi-

zation (HMO): A legal entity

that accepts responsibility and

financial risk for providing

specified services to a defined

population during a defined

period of time at a fixed price.

An organized system of health

care delivery that provides

comprehensive care to enrollees

through designated providers.

Enrollees are generally as-

sessed a monthly payment for

health care services and may be

required to remain in the pro-

gram for a specified amount of

time.

Health Insurance Portability

and Accountability Act

(HIPAA): Federal legislation

which (1) protects health insur-

ance coverage for workers and

their families when they change

or lose their jobs and (2) re-

quires the establishment of

national standards for elec-

tronic health care transactions

and national identifiers for

providers, health insurance

plans, and employers.

Health Reimbursement

Arrangements (HRAs): Ac-

a benefit plan. (See BenefBenefBenefBenefBenefi-i-i-i-i-

ciarciarciarciarciaryyyyy).

ERISA (Employment Retire-

ment Income Security Act): A

federal act, passed in 1974, that

established new standards and

reporting / disclosure require-

ments for employer-funded

pension and health benefit

programs. To date, self-funded

health benefit plans operating

under ERISA have been held to

be exempt from state insurance

laws. This exemption is cur-

rently under review.

Exclusions: Dental services

not covered under a dental

benefit program.

Exclusive Provider Organiza-

tion (EPO): See PrefPrefPrefPrefPreferrederrederrederrederred

PrPrPrPrProoooovider Organizationvider Organizationvider Organizationvider Organizationvider Organization

Explanation of Benefits: A

written statement to a benefi-

ciary, from a third-party payer,

after a claim has been reported,

indicating the benefit/charges

covered or not covered by the


Extension of Benefits: Exten-

sion of eligibility for benefits for

covered services, usually de-

signed to ensure completion of

treatment commenced prior to

the expiration date. Duration is

generally expressed in terms of

days.

F

Family Deductible: A deduct-

ible that is satisfied by com-

bined expenses of all covered

family members. For example,

a program with $25 deductible

may limit its application to a

maximum of three deductibles,

or $75 for the family, regardless

of the number of family mem-

bers. (See DeductibleDeductibleDeductibleDeductibleDeductible).

Fee-for-Service: A method of

paying practitioners on a ser-

vice-by service rather than a

salaried or capitated basis.

Fee Schedule: A list of the

charges established or agreed

to by a dentist for specific

dental services.

Flexible Benefits: A benefit

program in which an employee

has a choice of credits or dollars

for distribution among various

benefit options, e.g., health and

disability insurance, dental

benefits, childcare, or pension

benefits. (See CafCafCafCafCafeeeeettttteria Plans;eria Plans;eria Plans;eria Plans;eria Plans;

FleFleFleFleFlexible Spending Axible Spending Axible Spending Axible Spending Axible Spending Accountccountccountccountccount,

Also known as 50505050501c3a.1c3a.1c3a.1c3a.1c3a.)

Flexible Spending Account:

Employee reimbursement

account primarily funded with

employee-designated salary

reductions. Funds are reim-

bursed to employee for health

care (medical and/or dental),

dependent care, and/or legal

expenses, and are considered a

nontaxable benefit.

Franchise Dentistry: Refers to

a system for marketing a dental

practice, usually under a trade

name, where permitted by state

laws. In return for a financial

investment or other consider-

ation, participating dentists may

also receive the benefits of

media advertising, a national

referral system, and financial

and management consultation.

Freedom of Choice: A provi-

sion in a dental benefit program

that permits the insured to

choose any licensed dentist to

provide his or her dental care

and receive full benefits under


41

counts to reimburse medical

expenses, financed by employer

contributions and which can be

carried over from year-to-year.

Hold Harmless Clause: A

contract provision in which one

party to the contract promises

to be responsible for liability

incurred by the other party.

Hold harmless clauses fre-

quently appear in the following

contexts:

1) Contracts between dental

benefit organizations and an

individual dentist often

contain a promise by the

dentist to reimburse the

dental benefit organization

for any liability the organiza-

tion incurs because of

dental treatment provided

to beneficiaries of the

organization’s dental benefit

plan. This may include a

promise to pay the dental

benefit organization’s

attorney fees and related

costs; and

2) Contracts between

dental benefit organizations and

a group plan sponsor may

include a promise by the dental

benefit organization to assume

responsibility for disputes

between a beneficiary of the

group plan and an individual

dentist when the dentist’s

charge exceeds the amount the

organization pays for the service

on behalf of the beneficiary. If

the dentist takes action against

the patient to recover the

difference between the amount

billed by the dentist and the

amount paid by the organiza-

tion, the dental benefit organi-

zation will take over the defense

of the claim and will pay any

judgments and court costs.

I

Incentive Program: A dental

benefit program that pays an

increasing share of the treat-

ment cost, provided that the

covered individual utilizes the

benefits of the program during

each incentive period (usually a

year) and receives the treat-

ment prescribed. For example,

a 70%-30% co-payment pro-

gram in the first year of cover-

age may become an 80%-20%

program in the second year if

the subscriber visits the dentist

in the first year as stipulated in

the program. Most frequently,

there is a corresponding per-

centage reduction in the

program’s co-payment level if

the covered individual fails to

visit the dentist in a given year

(but never below the initial co-

payment level).

Indemnification Schedule:

See TTTTTable of Alloable of Alloable of Alloable of Alloable of Allowwwwwancesancesancesancesances.

Indemnity Plan: A dental plan

where a third-party payer

provides payment of an amount

for specific services, regardless

of the actual charges made by

the provider. Payment may be

made either to enrollees or, by

assignment, directly to dentists.

Schedule of allowances, table of

allowances, or reasonable and

customary plans are examples

of indemnity plans.

Individual Practice Associa-

tion (IPA): A legal entity orga-

nized and operated on behalf of

individual participating dentists

for the primary purpose of

collectively entering into con-

tracts to provide dental services

to enrolled populations. Den-

tists may practice in their own

offices and may provide care to

patients not covered by the

contract as well as IPA patients.

Insurer: An organization that

bears the financial risk for the

cost of defined categories or

services for a defined group of

beneficiaries. (See Third PThird PThird PThird PThird Pararararartytytytyty).

Insured: Person covered by the

program. (See BenefBenefBenefBenefBeneficiariciariciariciariciaryyyyy).

L

Least Expensive Alternative

Treatment (LEAT): A limitation

in a dental benefit plan that will

only allow benefits for the least

expensive treatment. Also

referred to as Least ExpensivLeast ExpensivLeast ExpensivLeast ExpensivLeast Expensiveeeee

PrPrPrPrProfofofofofessionally Aessionally Aessionally Aessionally Aessionally Acceptablecceptablecceptablecceptablecceptable

AltAltAltAltAlternativernativernativernativernative Te Te Te Te Treatment (LEPreatment (LEPreatment (LEPreatment (LEPreatment (LEPAAAAAAAAAAT)T)T)T)T).

Liability: An obligation for a

specified amount or action.

Limitations: Restrictive condi-

tions stated in a dental benefit

contract, such as age, length of

time covered, and waiting

periods, which affect an

individual’s or group’s coverage.

The contract may also exclude

certain benefits or services, or it

may limit the extent or condi-

tions under which certain

services are provided. (See

ExExExExExclusionsclusionsclusionsclusionsclusions).

M

Managed Care: Refers to a

cost containment system that

directs the utilization of health

benefits by:

1) restricting the type, level

and frequency of treat-

ment;

2) limiting the access to

care; and

3) controlling the level of

reimbursement for

services.

Maximum Allowance: The


42

coordination of benefits provi-

sion, because reimbursement

would be limited to the greater

level allowed by the two plans,

rather than a total of 100% of

the charges. Also referred to as

“benefit-less-benefit” or “carve-

out.”

Nonparticipating Dentist:

Any dentist who does not have a

contractual agreement with a

dental benefit organization to

render dental care to members

of a dental benefit program.

O

Open Enrollment: The annual

period in which employees can

select from a choice of benefit

programs.

Open Panel: A dental benefit

plan characterized by three

features:

1) Any licensed dentist may

elect to participate.

2) The beneficiary may receive

dental treatment from

among all licensed dentists,

with the corresponding

benefits being payable to

either the beneficiary or the

dentist.

3) The dentist may accept or

refuse any beneficiary.

Overbilling: Nondisclosure of

waiver of patient co-payment.

Overcoding: Reporting a more

complex and/or higher cost

procedure than was actually

performed.

P

Participating Dentist: Any

dentist who has a contractual

agreement with a dental benefit

organization to render care to

maximum dollar amount a

dental program will pay toward

the cost of a dental service as

specified in the program’s

contract provisions, e.g., UCR,

Table of Allowances. (Also

known as maximum pamaximum pamaximum pamaximum pamaximum payyyyyableableableableable

amountamountamountamountamount.)

Maximum Benefit: The maxi-

mum dollar amount a program

will pay toward the cost of

dental care incurred by an

individual or family in a speci-

fied period, usually a calendar

year.

Maximum FMaximum FMaximum FMaximum FMaximum Fee Scee Scee Scee Scee Schedule:hedule:hedule:hedule:hedule: A

compensation arrangement in

which a participating dentist

agrees to accept a prescribed

sum as the total fee for one or

more covered services.

Medicaid: A federal assistance

program established as Title XIX

under the Social Security Act of

1965 which provides payment

for medical care for certain low

income individuals and families.

The program is funded jointly by

the state and federal govern-

ments and administered by

states.

Medically Necessary Care:

The reasonable and appropriate

diagnosis, treatment, and

follow-up care (including sup-

plies, appliances and devices)

as determined and prescribed

by qualified, appropriate health

care providers in treating any

condition, illness, disease,

injury, or birth developmental

malformations. Care is medi-

cally necessary for the purpose

of: controlling or eliminating

infection, pain, and disease; and

restoring facial configuration or

function necessary for speech,

swallowing or chewing.

Medicare: A federal insurance

program enacted in 1965 as

Title XVIII of the Society Security

Act that provides certain inpa-

tient hospital services and

physician services for all per-

sons age 65 and older and

eligible disabled individuals.

The program is administered by

the Health Care Financing

Administration.

Member: An individual enrolled

in a dental benefit program.

(See BenefBenefBenefBenefBeneficiariciariciariciariciaryyyyy).

N

National Provider Identifier

(NPI): a unique 10-digit identifi-

cation number issued to health

care providers in the United

States by the Centers for Medi-

care and Medicaid Services

(CMS)

Necessary Treatment: A

necessary dental procedure or

service as determined by a

dentist, to either establish or

maintain a patient’s oral health.

Such determinations are based

on the professional diagnostic

judgment of the dentist, and the

standards of care that prevail in

the professional community.

Noncontributory Program: A

method of payment for group

coverage in which all of the

monthly premium for the

program is paid by the sponsor.

Nonduplication of Benefits:

This may apply if a subscriber is

eligible for benefits under more

than one plan. A dental benefit

contract provision relieving the

third-party payer of liability for

cost of services if the services

are covered under another

program. Distinct from a


43

eligible persons.

Payer: In health care, generally

refers to entities, other than the

patient, that finance or reim-

burse the cost of health ser-

vices. In most cases, refers to

insurance carriers, other third-

party payers, and/or health plan

sponsors (employers or unions).

Peer Review:

1) A retrospective consider-

ation or an examination by

one or more individuals of

equal standing or rank.

2) A process established to

provide for review by li-

censed dentists of: the care

provided by a dentist for a

single patient; disputes

regarding fees; cases

submitted by carriers,

initiated by patients or

dentists; quality of care and

appropriateness of treat-

ment.

Peer Review Organization

(PRO): An organization estab-

lished by an amendment of the

Tax Equity and Fiscal Responsi-

bility Act of 1982 (TEFRA), to

provide for the review of medi-

cal services furnished primarily

in a hospital setting and/or in

conjunction with care provided

under the Medicare and Medic-

aid programs. In addition to

their review and monitoring

functions, these entities can

invoke sanctions, penalties, or

other corrective actions for

noncompliance in organization

standards.

Percentile: The number in a

frequency distribution below

which a certain percentage of

fees will fall. For example, the

90th percentile is the number

that divides the distribution of

fees into the lower 90% and the

upper 10%, or that fee level at

which 90% of dentists charge

that amount or less, and 10%

charge more.

Point of Service: Arrangements

in which patients with a man-

aged care dental plan have the

option of seeking treatment

from an “out-of-network” pro-

vider. The reimbursement for

the patient is usually based on a

low table of allowances, with

significantly reduced benefits

than if the patient had selected

an “in network” provider.

PHI: Protected Health Informa-

tion under HIPAA privacy rules.

It applies to oral, written, or

electronic “individually identifi-

able information”.

Point of Service (POS): Man-

aged care plan which allows

subscribers to go out of network

to receive service, although the

cost may be higher.

Post-treatment Review: See

AAAAAudituditudituditudit.

Preauthorization: Statement

by a third-party payer indicating

that proposed treatment will be

covered under the terms of the

benefit contract. See also

PrecerPrecerPrecerPrecerPrecertiftiftiftiftificationicationicationicationication, PredePredePredePredePredetttttermina-ermina-ermina-ermina-ermina-

tiontiontiontiontion.

Precertification: Confirmation

by a third-party payer of a

patient’s eligibility for coverage

under a dental benefit program.

See also PreauthorizationPreauthorizationPreauthorizationPreauthorizationPreauthorization,

PredePredePredePredePredettttterminationerminationerminationerminationermination.

Predetermination: An admin-

istrative procedure that may

require the dentist to submit a

treatment plan to the third party

before treatment is begun. The

third party usually returns the

treatment plan indicating one or

more of the following: patient’s

eligibility, guarantee of eligibility

period, covered services, benefit

amounts payable, application of

appropriate deductibles, co-

payment and/or maximum

limitation. Under some pro-

grams, predetermination by the

third party is required when

covered charges are expected to

exceed a certain amount, such

as $200. Also known as

PreauthorizationPreauthorizationPreauthorizationPreauthorizationPreauthorization,

PrecerPrecerPrecerPrecerPrecertiftiftiftiftificationicationicationicationication, PrePrePrePrePretreatmenttreatmenttreatmenttreatmenttreatment

RRRRReeeeevievievievieviewwwww, Prior APrior APrior APrior APrior Authorizationuthorizationuthorizationuthorizationuthorization.

Pre-existing Condition: Oral

health condition of an enrollee

which existed before his/her

enrollment in a dental program.

Orthodontic conditions are

always pre-existing.

Preferred Provider Organiza-

tion (PPO): A formal agree-

ment between a purchaser of a

dental benefit program and a

defined group of dentists for the

delivery of dental services to a

specific patient population, as

an adjunct to a traditional plan,

using discounted fees for cost

savings.

Prefiling of Fees: The submis-

sion of a participating dentist’s

usual fees to a service corpora-

tion for the purpose of establish-

ing, in advance, that dentist’s

usual fees and the customary

ranges of fees in a geographic

area to determine benefits

under a usual, customary, and

reasonable dental benefit

program.

Premium: The amount charged

by a dental benefit organization

for coverage of a level of ben-

efits for a specified time.


44

for a service covered by the

contractual arrangement.

Reinsurance: Insurance for

third-party payers to spread

their risk for losses (claim paid)

over a specified dollar amount.

Relative Value System:

Coded listing of professional

services with unit values to

indicate relative complexity as

measured by time, skill, and

overhead costs. Third-party

payers typically assign a dollar

value per unit to calculate

provider reimbursement.

Retail Store Dentistry: Refers

to dental services offered within

a retail, department or drug

store operation. Typically, space

is leased from the store by a

separate administrative group

that, in turn, subleases to a

dentist or dental group provid-

ing the actual dental services.

The dental operation generally

maintains the same hours of

operation as the store and

appointments often are not

necessary. Considered to be a

type of practice, not a dental

benefit plan model.

Retrospective Review: A post-

treatment assessment of

services on a case-by-case or

aggregate basis after the

services have been performed.

Risk Pool: A portion of pro-

vider fees or capitation pay-

ments withheld as financial

reserves to cover unanticipated

utilization of services in an

alternative benefit plan.

S

Schedule of Allowances: See

TTTTTable of Alloable of Alloable of Alloable of Alloable of Allowwwwwancesancesancesancesances.

Prepaid Dental Plan: A

method of financing the cost of

dental care for a defined popu-

lation, in advance of receipt of

services.

Prepaid Group Practice: See

Closed PClosed PClosed PClosed PClosed Panelanelanelanelanel.

Pretreatment Estimate: See


Prevailing Fee: Term used by

some dental benefit organiza-

tions to refer to the fee most

commonly charged for a dental

service in a given area.

Preventive Dentistry: Refers

to the procedures in dental

practice and health programs

which prevent the occurrence of

oral diseases.

Prior Authorization: See


PrPrPrPrProof of Loss:oof of Loss:oof of Loss:oof of Loss:oof of Loss: Verification of

services-rendered expenses

incurred by the submission of

claim forms, radiographs, study

models, and/or other diagnostic

material.

Prospective Review: Prior

assessment by a payer or

payer’s agent that proposed

services are appropriate for a

particular patient, and/or the

patient and the category of

service are covered by a benefit

plan. (See PreauthorizationPreauthorizationPreauthorizationPreauthorizationPreauthorization,

PrecerPrecerPrecerPrecerPrecertiftiftiftiftificationicationicationicationication, PredePredePredePredePredetttttermina-ermina-ermina-ermina-ermina-

tiontiontiontiontion, Second-opinion PrSecond-opinion PrSecond-opinion PrSecond-opinion PrSecond-opinion Programogramogramogramogram).

Protected Health Information

(PHI): any information about

health status, provision of

health care, or payment for

health care that can be linked to

an individual.. This is inter-

preted broadly and includes any

part of a patient’s medical

record or payment history.

Purchaser: Program sponsor,

often employer or union, that

contracts with the dental benefit

organization to provide dental

benefits to an enrolled popula-

tion.

Q

Quality Assessment: The

measure of the quality of care

provided in a particular setting.

Quality Assurance: The

assessment or measurement of

the quality of care and the

implementation of any neces-

sary changes to either maintain

or improve the quality of care

rendered.

R

Reasonable and Customary

(R&C) Plan: A dental benefit

plan that determines benefits

based only on “Reasonable and

Customary” fee criteria. (See

Usual FUsual FUsual FUsual FUsual Feeeeeeeeee, CustCustCustCustCustomaromaromaromaromary Fy Fy Fy Fy Feeeeeeeeee, and

RRRRReasonable Feasonable Feasonable Feasonable Feasonable Feeeeeeeeee).

Reasonable Fee: The fee

charged by a dentist for a

specific dental procedure that

has been modified by the nature

and severity of the condition

being treated and by any medi-

cal or dental complications or

unusual circumstances, and

therefore may differ from the

dentist’s “usual” fee or the

benefit administrator’s “custom-

ary” fee.

Reimbursement: Payment

made by a third party to a

beneficiary or to a dentist on

behalf of the beneficiary, toward

repayment of expenses incurred


45

Schedule of Benefits: A

listing of the services for which

payment will be made by a

third-party payer, without

specification of the amount to

be paid.

Second-Opinion Program: An

opinion about the appropriate-

ness of a proposed treatment

provided by a practitioner other

than the one making the origi-

nal recommendation; some

benefit plans require such

opinions for selected services.

Self-Funding: The method of

providing employee benefits, in

which the sponsor does not

purchase conventional insur-

ance, but rather elects to pay for

the claims directly, generally

through the services of a TPA.

Self-funded programs often

have stop-loss insurance in

place to cover abnormal risks.

Self Insurance: Setting aside

of funds by an individual or

organization to meet antici-

pated dental care expenses or

its dental care claims, and

accumulation of a fund to

absorb fluctuations in the

amount of expenses or claims.

The funds set aside or accumu-

lated are used to provide dental

benefits directly instead of

purchasing coverage from an

insurance carrier.

Service Corporations: Dental

benefit organizations estab-

lished under non-for-profit state

statutes for the purpose of

providing health care coverage,

e.g., Delta Dental Plans, Blue

Cross and Blue Shield Plans.

Statistically-based Utilization

Review: A system that exam-

ines the distribution of treat-

ment procedures based on

claims information and in order

to be reasonably reliable, the

application of such claims

analyses of specific dentists

should include data on type of

practice, dentist’s experience,

socioeconomic characteristics,

and geographic location.

Stop-Loss: A general term

referring to that category of

coverage that provides insur-

ance protection (reinsurance) to

an employer for a self-funded

plan.

Subscriber: The person,

usually the employee, who

represents the family unit in

relation to the dental benefit

program. This term is most

commonly used by service

corporation plans. Also known

as: Certificate Holder, Enrollee.

Summary Plan Description:

See BenefBenefBenefBenefBenefit Plan Summarit Plan Summarit Plan Summarit Plan Summarit Plan Summaryyyyy.

Surcharge: A stated dollar

amount paid to the dentist by

the beneficiary, in addition to

other reimbursement received

by third-party payer(s).

Systematized Nomenclature

of Dentistry (SNODENT): a

dental diagnostic vocabulary

incompletely integrated in

SNOMED-CT). SNODENT codes

identify diseases, primary and

secondary diagnoses, anatomy,

morphology, risk factors, condi-

tions, and social factors affect-

ing health (such as smoking) in

indicate the necessity of treat-

ment (line #58 of ADA standard-

ized insurance form).

T

Table of Allowances: A list of

covered services with an as-

signed dollar amount that

represents the total obligation

of the plan with respect to

payment for such service, but

does not necessarily represent

the dentist’s full fee for that

service. Also known as ScScScScSched-hed-hed-hed-hed-

ule of Alloule of Alloule of Alloule of Alloule of Allowwwwwancesancesancesancesances, IndemnityIndemnityIndemnityIndemnityIndemnity

ScScScScSchedulehedulehedulehedulehedule.

Tax Equity and Fiscal Respon-

sibility Act of 1982 (TEFRA):

Legislation (Public Law 97-248)

affecting health maintenance

organizations and the Medicare

and Medicaid programs. Pro-

vides regulations for the devel-

opment of HMO risk contracting

with the Medicare program and,

through amendment, estab-

lished new provisions for the

foundation and operation of

peer review organizations.

Termination Date: See Expira-Expira-Expira-Expira-Expira-

tion Dattion Dattion Dattion Dattion Dateeeee.

Third Party: The party to a

dental benefit contract that may

collect premiums, assume

financial risk, pay claims, and/

or provides other administrative

services. Also known as AAAAAdmin-dmin-dmin-dmin-dmin-

istrativistrativistrativistrativistrative Ae Ae Ae Ae Agent, Carriergent, Carriergent, Carriergent, Carriergent, Carrier, Insurer, Insurer, Insurer, Insurer, Insurer,,,,,

UnderUnderUnderUnderUnderwritwritwritwritwritererererer.

Third Party Administrator

(TPA): Claims payer who as-

sumes responsibility for admin-

istering health benefit plans

without assuming any financial

risk. Some commercial insur-

ance carriers and Blue Cross/

Blue Shield plans also have TPA

operations to accommodate

self-funded employers seeking

administrative services only

(ASO) contracts.

Third-Party Payer: An organi-

zation other than the patient


46

(first party) or health care

provider (second party) involved

in the financing of personal

health services.

U

Unbundling of Procedures:

The separating of a dental

procedure into component parts

with each part having a charge

so that the cumulative charge of

the components is greater than

the total charge to patients who

are not beneficiaries of a dental

benefit plan for the same

procedure.

Upcode:Upcode:Upcode:Upcode:Upcode: Using a procedure

code that reflects a higher

intensity service than would

normally be used for the ser-

vices delivered.

Usual, Customary and Rea-

sonable (UCR) Plan: A dental

benefit plan that determines

benefits based on “Usual,

Customary, and Reasonable”

fee criteria. (See Usual FUsual FUsual FUsual FUsual Feeeeeeeeee,

CustCustCustCustCustomaromaromaromaromary Fy Fy Fy Fy Feeeeeeeeee, and RRRRReason-eason-eason-eason-eason-

able Fable Fable Fable Fable Feeeeeeeeee).

Usual Fee: The fee that an

individual dentist most fre-

quently charges for a given

dental service. (See also Cus-Cus-Cus-Cus-Cus-

tttttomaromaromaromaromary Fy Fy Fy Fy Feeeeeeeeee and RRRRReasonableeasonableeasonableeasonableeasonable

FFFFFeeeeeeeeee).

Utilization:

1) The extent to which the

members of a covered

group use a program over a

stated period of time;

specifically measured as a

percentage determined by

dividing the number of

covered individuals who

submitted one or more

claims by the total number

of covered individuals.

2) An expression of the num-

ber and types of services

used by the members of a

covered group over a speci-

fied period of time.

Utilization Management: A

set of techniques used by or on

behalf of purchasers of health

care benefits to manage the

cost of health care prior to this

provision by influencing patient

care decision-making through

case-by-case assessments of

the appropriateness of care

based on accepted dental

practices.

Utilization Review, statisti-

cally based: A system that

examines the distribution of

treatment procedures based on

claims information and in order

to be reasonably reliable, the

application of such claims

analyses of specific dentists

should include data on type of

practice, dentist’s experience,

socioeconomic characteristics,

and geographic location.

W

Waiting Period: The period

between employment or enroll-

ment in a dental program and

the date when a covered person

becomes eligible for benefits.


47

CHAPTER 9: FREQUENTLCHAPTER 9: FREQUENTLCHAPTER 9: FREQUENTLCHAPTER 9: FREQUENTLCHAPTER 9: FREQUENTLY ASKED INSURANCE QUESTIONSY ASKED INSURANCE QUESTIONSY ASKED INSURANCE QUESTIONSY ASKED INSURANCE QUESTIONSY ASKED INSURANCE QUESTIONS

§ Do mDo mDo mDo mDo my ory ory ory ory ortho beneftho beneftho beneftho beneftho benefits starits starits starits starits start ot ot ot ot ovvvvver if mer if mer if mer if mer if my employ employ employ employ employyyyyer cer cer cer cer changes insurance companies while mhanges insurance companies while mhanges insurance companies while mhanges insurance companies while mhanges insurance companies while myyyyy

ccccchild is in treatment?hild is in treatment?hild is in treatment?hild is in treatment?hild is in treatment?

Your original insurance company ceases to pay and you reapply to the new plan with appropri

ate information about the old plan. Most of the time the new coverage will only pick up where

the prior carrier left off.

§ WhWhWhWhWhy doesn’t my doesn’t my doesn’t my doesn’t my doesn’t my insurance company insurance company insurance company insurance company insurance company pay pay pay pay pay my my my my my ory ory ory ory orthodontic benefthodontic benefthodontic benefthodontic benefthodontic benefits up frits up frits up frits up frits up front?ont?ont?ont?ont?

No insurance company will do this. Only with IRS sanctioned Sec. #125 or #105 payroll

deduction plans is this possible, but not practical with orthodontics because of long duration.

§ Will mWill mWill mWill mWill my insurance continue ty insurance continue ty insurance continue ty insurance continue ty insurance continue to pao pao pao pao pay fy fy fy fy for mor mor mor mor my treatment when I leay treatment when I leay treatment when I leay treatment when I leay treatment when I leavvvvve me me me me my job since treatmenty job since treatmenty job since treatmenty job since treatmenty job since treatment

starstarstarstarstarttttted prior ted prior ted prior ted prior ted prior to mo mo mo mo my leay leay leay leay leaving?ving?ving?ving?ving?

Not unless you opt for COBRA extension at your expense

§ Does insurance paDoes insurance paDoes insurance paDoes insurance paDoes insurance pay fy fy fy fy for replacement, bror replacement, bror replacement, bror replacement, bror replacement, brokokokokoken, or lost reen, or lost reen, or lost reen, or lost reen, or lost retainertainertainertainertainers?s?s?s?s?

Retainers are usually not covered because there is rarely any benefit remaining after paying

for treatment. *Remember the lifetime benefit is usually $1000-$1500, although a few may

pay $2000.

§ Will mWill mWill mWill mWill my insurance pay insurance pay insurance pay insurance pay insurance pay fy fy fy fy for treatment if there is a wor treatment if there is a wor treatment if there is a wor treatment if there is a wor treatment if there is a waiting period and I begin treatment prioraiting period and I begin treatment prioraiting period and I begin treatment prioraiting period and I begin treatment prioraiting period and I begin treatment prior

ttttto the wo the wo the wo the wo the waiting period being up?aiting period being up?aiting period being up?aiting period being up?aiting period being up?

Beginning treatment before waiting period up: The insurance may only pay on the balance

owed at the end of the wait period. Check first and find out.

§ HoHoHoHoHow long do I haw long do I haw long do I haw long do I haw long do I havvvvve te te te te to fo fo fo fo file a claim on serile a claim on serile a claim on serile a claim on serile a claim on services rendered?vices rendered?vices rendered?vices rendered?vices rendered?

File as soon as you have a billable claim.

§ What is “usual and custWhat is “usual and custWhat is “usual and custWhat is “usual and custWhat is “usual and customaromaromaromaromary”?y”?y”?y”?y”?

Usual Fee – fee for service charged by dentist for a procedure

Customary Fee – average fee charged by dentists for a procedure within a specific geographic

region (first 3 numbers of zip code)

Don’t forget: Reasonable Fee – a fee above the usual fee charged by dentist for complex

cases

Example:

Dentists Fee for Procedure $100

Customary Fee for Procedure $ 90

UCR based on 90th % of Customary Fee $ 81

Copayment $ 19

NOTE: Carrier liability based on % of UCR not % of dentist’s fee

§ If mIf mIf mIf mIf my cy cy cy cy child has 2 phases of treatment and I do nohild has 2 phases of treatment and I do nohild has 2 phases of treatment and I do nohild has 2 phases of treatment and I do nohild has 2 phases of treatment and I do not use all of the lift use all of the lift use all of the lift use all of the lift use all of the lifeeeeetime ftime ftime ftime ftime for phase 1 treat-or phase 1 treat-or phase 1 treat-or phase 1 treat-or phase 1 treat-

ment will I gement will I gement will I gement will I gement will I get the remaining beneft the remaining beneft the remaining beneft the remaining beneft the remaining benefits fits fits fits fits for phase 2?or phase 2?or phase 2?or phase 2?or phase 2?

If Phase I is under $3000 for $1000-$1500 maximum, then you have some money left for

Phase II. You should check with your insurance company.

§ What does “fWhat does “fWhat does “fWhat does “fWhat does “fee scee scee scee scee schedule” mean?hedule” mean?hedule” mean?hedule” mean?hedule” mean?

A table of allowances offered by the Plan based on their idea of UCR (see above)

§ Does insurance usually paDoes insurance usually paDoes insurance usually paDoes insurance usually paDoes insurance usually pay fy fy fy fy for records separator records separator records separator records separator records separately?ely?ely?ely?ely?

Up to the Insurance company. Try and put records on patients dental insurance and save


48

treatment for orthodontic insurance.

§ What is a dental HMO plan?What is a dental HMO plan?What is a dental HMO plan?What is a dental HMO plan?What is a dental HMO plan?

Dental HMO: a discount plan for participating dentists agreeing to treat for the fixed fee offered

by the Plan. Patients can not go out of network

§ If an insurance companIf an insurance companIf an insurance companIf an insurance companIf an insurance company say say say say says theys theys theys theys they pay pay pay pay pay 50% does that mean they 50% does that mean they 50% does that mean they 50% does that mean they 50% does that mean they pay pay pay pay pay 50% of the ty 50% of the ty 50% of the ty 50% of the ty 50% of the toooootal ftal ftal ftal ftal fee?ee?ee?ee?ee?

It means it pays 50% of fee OR the life-time maximum benefit—whichever is less.

§ What is dual coWhat is dual coWhat is dual coWhat is dual coWhat is dual covvvvverage?erage?erage?erage?erage?

If each parent has an orthodontic plan from different companies, usually both will pay, but one

will be the primary and all records have to be sent to the secondary to receive payment. It is

against most state laws for the 2nd to withhold pay.

• What does non-duplication of benefWhat does non-duplication of benefWhat does non-duplication of benefWhat does non-duplication of benefWhat does non-duplication of benefits mean?its mean?its mean?its mean?its mean?

This means that the primary carrier must not pay as much or more than the secondary would if

they were primary.

Example: #1

Primary pays $1500

Secondary pays $1500- This carrier has the non-duplication clause. It will not pay anything.

Example: #2

Primary pays $750

Secondary pays $1500- Secondary will only pay up to $750. This plan is paying the

difference in what it will pay and what primary pays. (The company with the non-duplication

clause will not pay more than the first company even though the lifetime amount is higher.

Not all companies have this clause. Check the benefit booklet.

• If I am tIf I am tIf I am tIf I am tIf I am told I need eold I need eold I need eold I need eold I need extractions does this come out of mxtractions does this come out of mxtractions does this come out of mxtractions does this come out of mxtractions does this come out of my ory ory ory ory orthodontic lifthodontic lifthodontic lifthodontic lifthodontic lifeeeeetime maximum ortime maximum ortime maximum ortime maximum ortime maximum or

does this come out of mdoes this come out of mdoes this come out of mdoes this come out of mdoes this come out of my regular dental?y regular dental?y regular dental?y regular dental?y regular dental?

Some companies will take this from your lifetime orthodontic maximum and some don’t.

Check with your carrier.

(Dr. Michael Rogers’ office completes the form aove while verifying insurance information.)

INSURANCE VERIFICINSURANCE VERIFICINSURANCE VERIFICINSURANCE VERIFICINSURANCE VERIFICAAAAATION FTION FTION FTION FTION FORMORMORMORMORM

PPPPPAAAAATIENT NAME:TIENT NAME:TIENT NAME:TIENT NAME:TIENT NAME:

INSURED:INSURED:INSURED:INSURED:INSURED:

Insured SS or ID#:Insured SS or ID#:Insured SS or ID#:Insured SS or ID#:Insured SS or ID#:

Place of EmploPlace of EmploPlace of EmploPlace of EmploPlace of Employmentymentymentymentyment:::::

PPPPPatient D.O.B.:atient D.O.B.:atient D.O.B.:atient D.O.B.:atient D.O.B.:

Insured D.O.B.:Insured D.O.B.:Insured D.O.B.:Insured D.O.B.:Insured D.O.B.:

GrGrGrGrGroup #:oup #:oup #:oup #:oup #:

ORTHO BENEFIT INFORTHO BENEFIT INFORTHO BENEFIT INFORTHO BENEFIT INFORTHO BENEFIT INFO:O:O:O:O:

DatDatDatDatDate:e:e:e:e:

TTTTTalkalkalkalkalked ted ted ted ted to:o:o:o:o:

EfEfEfEfEffffffectivectivectivectivective Date Date Date Date Date:e:e:e:e:

Maximum LifMaximum LifMaximum LifMaximum LifMaximum Lifeeeeetime:time:time:time:time:

AAAAAge Limitge Limitge Limitge Limitge Limit:::::

BenefBenefBenefBenefBenefits Used:its Used:its Used:its Used:its Used:

WWWWWaiting Paiting Paiting Paiting Paiting Period:eriod:eriod:eriod:eriod:

% of P% of P% of P% of P% of Paaaaaymentymentymentymentyment:::::

Initial PInitial PInitial PInitial PInitial Paaaaaymentymentymentymentyment::::: AAAAAutututututo?o?o?o?o?

Deductible:Deductible:Deductible:Deductible:Deductible:


49

§ What is fWhat is fWhat is fWhat is fWhat is fee fee fee fee fee for seror seror seror seror service?vice?vice?vice?vice?

The fee the dentist decides his service is worth where by the patient makes up the difference

from what the insurance company pays (balanced billing).

§ WhWhWhWhWhy is ory is ory is ory is ory is orthodontic treatment so costly?thodontic treatment so costly?thodontic treatment so costly?thodontic treatment so costly?thodontic treatment so costly?

Looking at the cost per visit and the results of a beautiful smile will seem inexpensive in rela

tion to other Services. It is important to get the message of the AAO public awareness cam

paign across: “Orthodontists have 2-3 years of specialized education beyond dental school to

learn the proper way to align and straighten teeth.”

• Do annual deductibles apply tDo annual deductibles apply tDo annual deductibles apply tDo annual deductibles apply tDo annual deductibles apply to oro oro oro oro orthodontic benefthodontic benefthodontic benefthodontic benefthodontic benefits?its?its?its?its?

Up to the insurance company. The usual deductible is $50-150. It is good to ask the insurance

company when checking the patient’s eligibility.

• My fMy fMy fMy fMy fee is $5500 with a 5% cash deduction. If the patient paee is $5500 with a 5% cash deduction. If the patient paee is $5500 with a 5% cash deduction. If the patient paee is $5500 with a 5% cash deduction. If the patient paee is $5500 with a 5% cash deduction. If the patient pays cash, what fys cash, what fys cash, what fys cash, what fys cash, what fee amount goesee amount goesee amount goesee amount goesee amount goes

on the insurance claim?on the insurance claim?on the insurance claim?on the insurance claim?on the insurance claim?

The ADA insurance claim form states: “I hereby certify that the procedures as indicated by date

are in progress or have been completed.” You should enter $5225 on the insurance claim form

as the total fee. To do otherwise would be to commit fraud.

NOTE: Many offices will only discount 2.5% if paid by a credit card in order to capture the costs

associated with charging on a credit card. The exact amount you charge should be entered on

the insurance claim form.


50

QUESTIONS ON FLEXIBLE SPENDING AQUESTIONS ON FLEXIBLE SPENDING AQUESTIONS ON FLEXIBLE SPENDING AQUESTIONS ON FLEXIBLE SPENDING AQUESTIONS ON FLEXIBLE SPENDING ACCOUNTCCOUNTCCOUNTCCOUNTCCOUNTSSSSSQuestions and Answers by John Stoner

What is a FleWhat is a FleWhat is a FleWhat is a FleWhat is a Flexible Spending Axible Spending Axible Spending Axible Spending Axible Spending Account?ccount?ccount?ccount?ccount?

There are two types of Flexible Spending Accounts:

• Health Care Spending AHealth Care Spending AHealth Care Spending AHealth Care Spending AHealth Care Spending Accountccountccountccountccount

This allows employees to set aside pre-tax dollars, for themselves and their dependents, to pay

medical, dental, and vision expenses not covered under current benefit plans. Out-of-pocket

expenses such as deductibles, co-payments, coinsurance, prescriptions and eyeglasses are

eligible and can be paid with pre-tax dollars.

• Dependent Care RDependent Care RDependent Care RDependent Care RDependent Care Reimbureimbureimbureimbureimbursement Asement Asement Asement Asement Accountccountccountccountccount

This allows employees to pay dependent care expenses with the same pre-tax dollars.

With the proper plan, Flexible Spending Accounts can have a significant economic impact.

Health Care Spending AHealth Care Spending AHealth Care Spending AHealth Care Spending AHealth Care Spending Accountccountccountccountccount

This can be used to nearly everyone and pays for many expenses not covered under current medical,

dental, or vision plans. Most common eligible expenses include:

• Health insurance deductibles, co-pays, and coinsurance

• Dental services or expenses not covered under a dental plan

• Vision care expenses such as eyeglasses, contact lens, and lasik surgery

• Hearing aids

• Chiropractic services

• Physical Therapy and Massage

• Acupuncture

• Ambulance service

• Prosthetics

• Wheelchairs

Dependent Care Spending ADependent Care Spending ADependent Care Spending ADependent Care Spending ADependent Care Spending Accountccountccountccountccount

Pays for expenses such as daycare, nursery school and babysitting while you are at work. Those eligible

for dependent care reimbursement are:

• Children under age 13.

• A disabled child, spouse, or parent that qualified as a dependent for tax purposes.

HoHoHoHoHow are Flew are Flew are Flew are Flew are Flexible Spending Axible Spending Axible Spending Axible Spending Axible Spending Accounts funded?ccounts funded?ccounts funded?ccounts funded?ccounts funded?

The employer makes arrangements through Flex Administrative Services to administer this program.

Employees determine how much they want to contribute to their account. This amount will be deducted

from their paycheck and deposited into their accounts.

When an eligible expense is incurred, simply submit a reimbursement request to Flex Administrative

Services along with the Explanation of Benefits from the insurance carrier or an original receipt for

services rendered.


51

HoHoHoHoHow much can I contributw much can I contributw much can I contributw much can I contributw much can I contribute?e?e?e?e?

• Health Care Spending Account maximum is employer determined.

• Dependent Care Spending Account maximum is not to exceed $5,000.00

However, for a married couple in which a spouse earns less than $5,000, the maximum contribution is

the total income of the spouse with the lower income. Maximum contribution is $2,500 per year for

married couples filing individual tax returns.

What if I don’t use all the moneWhat if I don’t use all the moneWhat if I don’t use all the moneWhat if I don’t use all the moneWhat if I don’t use all the money in my in my in my in my in my account during the yy account during the yy account during the yy account during the yy account during the year?ear?ear?ear?ear?

Contributions do not roll over from one plan year to the next. Therefore, careful planning is required. It

is very important to estimate the amount of eligible expense you plan to incur so that all funds are

used by the end of each plan year. Most expenditures are controllable and predictable.

The cut-off date for filing claims for services incurred during a plan year is 60 da60 da60 da60 da60 days ys ys ys ys after the plan year-

ends.

Claims must be incurred during the plan year to qualify for reimbursement.

Is it smarIs it smarIs it smarIs it smarIs it smarttttter ter ter ter ter to tako tako tako tako take credit fe credit fe credit fe credit fe credit for dependent care eor dependent care eor dependent care eor dependent care eor dependent care expenses on mxpenses on mxpenses on mxpenses on mxpenses on my income tax ory income tax ory income tax ory income tax ory income tax or

open a Fleopen a Fleopen a Fleopen a Fleopen a Flexible Spending account?xible Spending account?xible Spending account?xible Spending account?xible Spending account?

For qualified dependents, childcare and dependent care expense can be a direct tax credit on your

federal income tax return. For married couples with an adjusted gross income less than $20,000, a

direct tax credit could offer more savings than a Flexible Spending Account.

It’s always best to check with a tax advisor on this issue.

Aren’t medical eAren’t medical eAren’t medical eAren’t medical eAren’t medical expenses considered an eligible deduction fxpenses considered an eligible deduction fxpenses considered an eligible deduction fxpenses considered an eligible deduction fxpenses considered an eligible deduction for income tax puror income tax puror income tax puror income tax puror income tax pur-----

poses? If so, whposes? If so, whposes? If so, whposes? If so, whposes? If so, why do I need a Fley do I need a Fley do I need a Fley do I need a Fley do I need a Flexible Spending Axible Spending Axible Spending Axible Spending Axible Spending Account?ccount?ccount?ccount?ccount?

Non-reimbursed medical expense is considered an eligible deduction when filing long form, itemizing

deductions, and expenses are greater than 7.5 percent of adjusted gross income.

Most people do not incur enough ineligible expense to meet the second requirement. For example,

assuming a $20,000 annual income, $1,500 in incurred ineligible medical expense would be neces-

sary before claiming any deductions. In this case, only expenses above $1,500 can be deducted. For

nearly everyone, a Health Care Spending Account is a better way to save money.

When can I change the contribution amount?When can I change the contribution amount?When can I change the contribution amount?When can I change the contribution amount?When can I change the contribution amount?

Changes may be made once a year at open enrollment for the following plan year. However, qualifying

events, such as a change in marital status, birth or adoption of a child, or death in the immediate

family will allow changes to be made during the plan year.

HoHoHoHoHow do I gew do I gew do I gew do I gew do I get reimburt reimburt reimburt reimburt reimbursed?sed?sed?sed?sed?

Simply mail a request to Flex Administrative Services with the easy-to-complete form. Include expla-

nation of benefits from insurance carrier or receipts for eligible expenses. Claim forms are available


52

through your employer at the beginning of each plan year. Some FSA’s require a receipt before pay-

ment will be issued.

What if I sWhat if I sWhat if I sWhat if I sWhat if I stttttop wop wop wop wop worororororking?king?king?king?king?

Health Care Account: Submit claims for expenses incurred through the last day you worked.

Dependent Care Account: Submit claims for expenses you will incur throughout plan year, up to

amount available on deposit.

HoHoHoHoHow do I gew do I gew do I gew do I gew do I get st st st st startartartartarttttted?ed?ed?ed?ed?

Sign up now by completing the Flexible Spending Accounts enrollment form.

DEPENDENT CDEPENDENT CDEPENDENT CDEPENDENT CDEPENDENT CARE EXPENSES THAARE EXPENSES THAARE EXPENSES THAARE EXPENSES THAARE EXPENSES THAT ARE ELIGIBLE:T ARE ELIGIBLE:T ARE ELIGIBLE:T ARE ELIGIBLE:T ARE ELIGIBLE:

An eligible dependent is any dependent who is less than 13 years old and your dependent under

federal income tax rules. An eligible dependent may also include your mentally or physically impaired

spouse or a dependent who is incapable of caring for himself or herself (for example, an invalid par-

ent). The dependent must spend at least eight hours per day in your home.

Child care services will qualify for reimbursement from the Dependent Care Reimbursement

Account if the meet these requirements.

§ The child must be under 13-years-old and must be your dependent under federal tax rules.

Note: If your child turns 13 during the year, you cannot stop your contribution at that time.

• The services may be provided inside or outside your home, but not by someone who is your

minor child or dependent for income tax purposes (for example, an older child).

• If the services are provided by a daycare facility that cares for six or more children at the same

time, it must be a qualified daycare center.

• The service must be incurred to enable you, or you and your spouse if you are married, to be

employed.

• The amount to be reimbursed must not be greater than spouse’s income or one-half your

income, whichever is lower.

• Services must be for the physical care of the child, not for education, meals, etc. Kindergarten

expenses must separate out the cost of custodial care from education to reimburse.

Allowable Dependent Care expenses include payments to the following when the expenses enable you

to work:

• Child care centers

• Family daycare providers

• Baby-sitters

• Nursery schools

• Caregivers for a disabled dependent or spouse who live with you

• Household services, provided that a portion of these expenses are for a qualifying dependent

incurred to ensure the dependent’s well-being maintenance


53

DEPENDENT CDEPENDENT CDEPENDENT CDEPENDENT CDEPENDENT CARE EXPENSES THAARE EXPENSES THAARE EXPENSES THAARE EXPENSES THAARE EXPENSES THAT ARE NOT ARE NOT ARE NOT ARE NOT ARE NOT ELIGIBLE:T ELIGIBLE:T ELIGIBLE:T ELIGIBLE:T ELIGIBLE:

• Dependent care expenses that are provided to one of your dependents by a family member,

unless the family member is age 19 or over by the end of the year and will not be claimed as a

dependent

• Expenses for food and clothing

• Educations expenses from Kindergarten and higher

• Health care expenses for your dependents

• Overnight camps

New in 2008- you may “apply” or “carry over” the unused contributions in your FSA to your pharmacy,

to be used for approved medications.

HINT


54

Analysis of the After Tax Costs to Pay for Dental Services

Income TIncome TIncome TIncome TIncome Tax Bracax Bracax Bracax Bracax Brackkkkkeeeeetststststs 15.00%15.00%15.00%15.00%15.00% 28.00%28.00%28.00%28.00%28.00% 3333311111.00%.00%.00%.00%.00%

7 7 7 7 7.65%.65%.65%.65%.65% 7 7 7 7 7.65%.65%.65%.65%.65% 7 7 7 7 7.65%.65%.65%.65%.65%

___________________________________ ________________________________________ ________________________________________

TTTTToooootaltaltaltaltal 22.65%22.65%22.65%22.65%22.65% 35.65%35.65%35.65%35.65%35.65% 38.65% 38.65% 38.65% 38.65% 38.65%

Amount of UnreimburAmount of UnreimburAmount of UnreimburAmount of UnreimburAmount of Unreimbursed Dental Sersed Dental Sersed Dental Sersed Dental Sersed Dental Servicesvicesvicesvicesvices

AAAAActual Dollar Amountctual Dollar Amountctual Dollar Amountctual Dollar Amountctual Dollar Amount TTTTTax Bracax Bracax Bracax Bracax Brackkkkkeeeeettttt AAAAActual Tctual Tctual Tctual Tctual Taxaxaxaxax TTTTToooootal Costtal Costtal Costtal Costtal Cost

Of Dental ExpenseOf Dental ExpenseOf Dental ExpenseOf Dental ExpenseOf Dental Expense

$ 200.00$ 200.00$ 200.00$ 200.00$ 200.00 22.65% 22.65% 22.65% 22.65% 22.65% $ 45.30 $ 45.30 $ 45.30 $ 45.30 $ 45.30 $ 2 $ 2 $ 2 $ 2 $ 245.3045.3045.3045.3045.30

35.65% 35.65% 35.65% 35.65% 35.65% $ 7 $ 7 $ 7 $ 7 $ 711111.30.30.30.30.30 $ 2 $ 2 $ 2 $ 2 $ 27777711111.30.30.30.30.30

38.65% 38.65% 38.65% 38.65% 38.65% $ 7 $ 7 $ 7 $ 7 $ 777777.30.30.30.30.30 $ 2 $ 2 $ 2 $ 2 $ 27777777777.30.30.30.30.30

$ 600.00$ 600.00$ 600.00$ 600.00$ 600.00 22.65% 22.65% 22.65% 22.65% 22.65% $ 1 $ 1 $ 1 $ 1 $ 135.9035.9035.9035.9035.90 $ 735.90 $ 735.90 $ 735.90 $ 735.90 $ 735.90

35.65% 35.65% 35.65% 35.65% 35.65% $ 2 $ 2 $ 2 $ 2 $ 2111113.903.903.903.903.90 $ 8 $ 8 $ 8 $ 8 $ 8111113.903.903.903.903.90

38.65% 38.65% 38.65% 38.65% 38.65% $ 23 $ 23 $ 23 $ 23 $ 2311111.90.90.90.90.90 $ 83 $ 83 $ 83 $ 83 $ 8311111.90.90.90.90.90

$1$1$1$1$1000.00000.00000.00000.00000.00 22.65% 22.65% 22.65% 22.65% 22.65% $ 226.50 $ 226.50 $ 226.50 $ 226.50 $ 226.50 $1 $1 $1 $1 $1226.50226.50226.50226.50226.50

35.65% 35.65% 35.65% 35.65% 35.65% $ 356.50 $ 356.50 $ 356.50 $ 356.50 $ 356.50 $1 $1 $1 $1 $1356.50356.50356.50356.50356.50

38.65% 38.65% 38.65% 38.65% 38.65% $ 386.50 $ 386.50 $ 386.50 $ 386.50 $ 386.50 $1 $1 $1 $1 $1386.50386.50386.50386.50386.50

$3000.00$3000.00$3000.00$3000.00$3000.00 22.65% 22.65% 22.65% 22.65% 22.65% $ 679.50 $ 679.50 $ 679.50 $ 679.50 $ 679.50 $3679.50 $3679.50 $3679.50 $3679.50 $3679.50

35.65% 35.65% 35.65% 35.65% 35.65% $1 $1 $1 $1 $1069.50069.50069.50069.50069.50 $4069.50 $4069.50 $4069.50 $4069.50 $4069.50

38.65% 38.65% 38.65% 38.65% 38.65% $1159.50 $1159.50 $1159.50 $1159.50 $1159.50 $4 $4 $4 $4 $4159.50159.50159.50159.50159.50

FLEXIBLE SPENDING ACCOUNTS


55

FLEXIBLE SPENDING ACCOUNTS

COUNTS

SSSSAO OFFICE INSURANCE GUIDEAO OFFICE INSURANCE GUIDEAO OFFICE INSURANCE GUIDEAO OFFICE INSURANCE GUIDE

Southern Association of Orthodontists

Policies, Letters and Forms

Privacy Policy MODEL POLICY PRIVACY NOTICE PRIVACY CONSENT PRIVACY AUTHORIZATION PRIVACY AGREEMENT

Patient Education/ Sample Policy Letters STEP-BY-STEP FILING OF DENTAL INSURANCE FOR MANAGED CARE PLANS PATIENT AND DENTAL BENEFITS INFORMATION INFORMATION ON THIRD PARTIES OFFICE POLICY FOR OUR PATIENTS WHO HAVE ORTHODONTIC “INSURANCE” Policy for Office not Accepting on Orthodontic Insurance (but encouraging FSA) Policy for Office not Accepting Orthodontic Insurance (but encouraging DR)

WHAT YOU SHOULD KNOW ABOUT YOUR ORTHODONTIC INSURANCE BENEFIT SAMPLE LETTERS AND FORMS # 1 Letter to Insurance Company Refusal of Request for Tax Identification Number (from AAO) # 2 Letter to Insurance Company: Refusal of Request for Continuation of Treatment Form #3 Letter to Insurance Company: Refusal of Request for Orthodontic Records (from AAO) #4 Letter to Patient: Doctor’s Refusal to Accept Assignment of Benefits #5 Letter to Patient: Acceptance of Assignment of Benefits as Non-provider for Insurance Companies #6 Helpful Information to Patient Denial of Claims (from AAO) #7 Letter from Patient to Insurance Company: Denial of Claim (from AAO) #8 Letter from Doctor to Patient: Doctor Non-participation in Preferred Provider Plans #9 OFFICE POLICY REGARDING MONTHLY/QUARTERLY CONTINUATION OF TREATMENT FORMS #10 Insurance Verification Form #11 Insurance Benefits/Payment Agreement

Flexible Spending Accounts and Direct Reimbursement Plans #12 Relevant Sections of the IRS Code Regarding Orthodontics and Flexible Spending Accounts #13 Sample Sales Letter for Direct Reimbursement #14 Instructions for Setting Up a Direct Reimbursement Plan in Your Office

#15 REQUEST FOR REIMBURSEMENT OF DENTAL EXPENSES EMPLOYEE DIRECT REIMBURSEMENT PLAN

#16 FSA Election #17 Computing FSA Deductions #18 Claim for FSA Reimbursement

Complaint Forms #19 SAMPLE FORM TO FILE COMPLAINT WITH STATE INSURANCE COMMISSIONER

#20 SAMPLE FORM TO FILE COMPLAINT TO AAO

REPORT ON INSURANCE REFUSALS/REQUEST FOR ADDITIONAL INFORMATION

#21 Form


PRIVACY POLICYPRIVACY POLICYPRIVACY POLICYPRIVACY POLICY

MODEL PolicyMODEL PolicyMODEL PolicyMODEL Policy

I. INTRODUCTION

Recently, the United States Department of Health and Human Services (HHS) issued comprehensive regulations relating to the privacy of patient records. It is the intent of this office to comply with each of these new rules, and this policy is designed to provide a framework to accomplish this goal. These rules apply to this office because, among other things, we transmit patient records electronically. However, the rules apply to all “protected patient information,” whether in electronic or paper form, or whether disclosed orally. For purposes of this Privacy Policy, “protected patient information” includes any individually identifiable information, such as names, dates, phone/fax number, email addresses, and demographic data. II. PRIVACY OFFICIAL

EMPLOYEE’S NAME shall be this office’s “privacy official.” As such, he/she shall be responsible for implementing this Privacy Policy, as well as developing any future amendments or revisions to this Policy. III. CONTACT PERSON

EMPLOYEE’S NAME shall be designated as this office’s “contact person.” He/she shall

therefore be responsible for receiving any complaints or inquiries about patient privacy matters, and responding to such complaints or inquires.

The Contact Person shall document all complaints or inquiries received.

If any patient or other person desires to make a complaint relating to patient privacy, the

Contact Person shall instruct him or her to submit the complaint in writing. The Contact Person shall then investigate the complaint or inquiry, determine a resolution in conjunction with DOCTOR’S NAME, and respond to the complainant or inquirer as to the results of the investigation and resolution.

If the inquiry is a complaint, the person shall be advised of his/her right to file a complaint with HHS and notified that the complaint must be filed within 180 days of the date of the alleged violation.

IV. PRIVACY TRAINING

This office will routinely undertake privacy training for all staff. The training will occur on an annual basis for all existing staff, unless otherwise changed to a more frequent basis. In addition, all new staff shall participate in privacy training immediately upon their commencement of employment with this office. The Privacy Official will maintain a record of this training.


V. USE AND DISCLOSURE OF PROTECTED PATIENT INFORMATION

A. GENERALLY

No protected patient information shall be used or disclosed in any manner other than in conformity with this Policy. Staff should always be mindful of the need to maintain confidentiality of patients’ records and protected health information. Thus, for example, in certain instances it may be appropriate to lower voices or request waiting patients stand a few feet away from patients with whom you are discussing treatment aspects, scheduling appointments, etc.

Access to protected patient information shall only be given to the following staff members: INSERT TITLES OF STAFF MEMBERS B. NOTICE AS TO USE AND DISCLOSURE OF PATIENT INFORMATION

The form Notice attached to this Policy shall be given to all patients at their first appointment. A copy of the Notice must be maintained in each patient’s file.

The Notice may be amended upon approval of DOCTOR’S NAME. If the Notice is

amended, it must be amended promptly and distributed to all patients who have been given the earlier version(s). No material change to the Notice will be implemented prior to the effective date shown on the revised Notice.

C. CONSENT TO USE AND DISCLOSE PATIENT INFORMATION

The Consent form attached to this Policy shall be presented to all patients with the notice at their first appointment and prior to the disclosure of any of the patient’s protected health information. It must be signed and dated by the patient. A copy of the signed and dated Consent shall be kept in the patient’s file.

This form is required to use or disclose any protected patient information in connection

with treatment, payment, or “health care operations.” (Health care operations include performance reviews, training, certification, accreditation, and licensing.)

If any patient refuses to sign the Consent Form, DOCTOR’S NAME may refuse to treat

the patient, unless the patient presents an emergency situation. (In that case, the Consent Form will be obtained as soon thereafter as is practicable.)

If DOCTOR’S NAME has an “indirect relationship” with the patient (i.e., where DOCTOR’S

NAME is providing treatment as to an isolated matter at the request of another health care provider), it is not necessary that a Consent Form be obtained from the patient. However, if reasonably possible, it is our policy that a Consent Form be obtained in all instances.

• A patient may revoke the Consent in writing at any time.

• The Notice and Consent may not be combined on the same form.


D. AUTHORIZATION TO USE AND DISCLOSE PATIENT INFORMATION

If DOCTOR’S NAME ever determines that protected patient information will be used or disclosed for any purpose other than in connection with treatment, payment, or health care operations (defined above), then the patient must sign the Authorization Form attached to this Policy. For example, this form would be appropriate where the patient’s information will be used to determine whether to hire the patient, making a disclosure of the information to a financial institution, marketing, etc.

Special rules apply (and additional items must be included in the form) where

DOCTOR’S NAME intends to use the protected health information for his own purposes, additional items are requested by DOCTOR’S NAME in connection with disclosure by other third parties, or where the use or disclosure relates to research that includes the patient’s treatment.

Unlike the Consent Form, a patient will not be refused treatment on the basis of

his/her refusal to sign the Authorization Form. A patient may revoke the Authorization in writing at any time. In general, the Authorization Form should be reviewed by legal counsel prior to signature by the patient.

E. “MINIMUM NECESSARY” USE AND DISCLOSURE OF PATIENT INFORMATION FOR

NON-TREATMENT PURPOSES

Wide latitude is given as to the use or disclosure of patient information for purposes of treatment. Thus, any information that DOCTOR’S NAME deems appropriate will be used or disclosed.

However, if the use or disclosure of protected patient information occurs for any other reason (i.e., for payment, reimbursement, or health care operations, etc.), the information used, disclosed, or requested must be limited to the minimum degree to accomplish the purpose for which the use, disclosure, or request is made. (Note that this restriction does not apply to uses or disclosures of the information to the patient to whom the information relates.)

F. DISCLOSURES TO SERVICE PROVIDERS

Any disclosure to service providers by this office (i.e., labs, collection agencies, attorneys, accountants, etc.) may only occur after certain safeguards are in place. Namely, there must be a written agreement substantially in the form attached to this Policy prior to the release of any protected patient information. Because there are special rules in the privacy regulations relating to vendors and unique state laws, the attached form should be reviewed by legal counsel prior to signature.

VI. SPECIFIC PATIENT REQUESTS

A. FOR RESTRICTIONS ON USE AND DISCLOSURE

Patients may request restrictions on the use and disclosure of their protected health information. However, we are not obligated to honor these requests. But if we elect to honor the request, we must adhere to it. Any denial must be in writing.


B. FOR COMMUNICATION OF THEIR INFORMATION

Patients have the right to request confidential communication of their protected health information. For example, they may request that the information be communicated by alternative means (i.e., sending correspondence to their office rather than to their home). If such a request is made, we will abide by that request as long as it is reasonable. C. FOR INSPECTION AND COPIES OF THEIR RECORDS

Consistent with applicable ethics rules of the American Association of Orthodontists and the new privacy rules, we will provide patient records to them or their designee at any time. However, special permission from DOCTOR’S NAME must be obtained prior to releasing the information if the information is compiled in anticipation of, or for use in, litigation or administrative (i.e., dental board) proceedings. (The new privacy rules do not require that the information be provided to the patient in those instances.) Any denial must be in writing. D. TO ADMEND OR MODIFY THEIR HEALTH INFORMATION

From time to time, patients may request that their protected health information be modified. Generally, we will honor their requests. However, such requests will not be honored if the information on file is accurate and complete. Any denial must be in writing. In addition, any denial of this type of request must advise the patient of his/her right to file a complaint with the HHS Secretary.

E. FOR AN ACCOUNTING OF DISCLOSURES

If requested and unless an exception exists, we will provide patients with a written accounting of all disclosures of their protected health information that we have made for the period requested, but not to exceed six yearssix yearssix yearssix years from the date of the request.

Unless decided otherwise by DOCTOR’S NAME, we will not provide disclosures relating to the following:

1. Treatment of the patient; 2. Payment by or on behalf of the patient; 3. Health Care Operations (i.e., information disclosed in connection with

performance reviews, training, certification, accreditation or licensing); 4. Disclosures made to the patient; 5. Disclosures made to other treatment providers (i.e., their general dentist,

periodontist, oral surgeon, etc.); or, 6. Any disclosures that occurred prior to April 14, 2003.

VII. VIOLATION OF PRIVACY POLICY

Any violation of this Privacy Policy shall be grounds for discipline, including termination. Compliance with this Policy is required in addition to all other office personnel policies, if any.


(We recommend you use Dr. office/name as a header on this page)

PRIVACY NOTICE

This notice is required by the new patient privacy regulations issued by the United States This notice is required by the new patient privacy regulations issued by the United States This notice is required by the new patient privacy regulations issued by the United States This notice is required by the new patient privacy regulations issued by the United States Department of Health and Human Services (HHS), and describes how your medical information may Department of Health and Human Services (HHS), and describes how your medical information may Department of Health and Human Services (HHS), and describes how your medical information may Department of Health and Human Services (HHS), and describes how your medical information may be used or dbe used or dbe used or dbe used or disclosed, and how you may gain access to your medical information.isclosed, and how you may gain access to your medical information.isclosed, and how you may gain access to your medical information.isclosed, and how you may gain access to your medical information.

Your protected medical information (i.e., individually identifiable information, such as names, dates, phone/fax numbers, email addresses and demographic data) may be used or disclosed by us in one or more of the following respects:

• To other health care providers (i.e., your general dentist, oral surgeon, etc.) in connection with our rendering orthodontic treatment to you;

• To Third Party payers or spouses (i.e., insurance companies, employers with direct reimbursement, administrators of flexible spending accounts, etc.) in order to obtain payment of your account;

• To certifying, licensing and accrediting bodies (i.e., the American Board of Orthodontics, state dental boards, etc.) in connection with obtaining certification, licensure or accreditation;

• Internally, to all staff members who have any role in your treatment; and/or

• To other patients and third parties who may overhear conversations about your treatment, scheduling, etc.

Under the new privacy rules, you have the right to:

• Request restrictions on the use and disclosure of your protected health information;

• Request confidential communication of your protected health information;

• Inspect and obtain copies of your protected health information through asking us;

• Amend or modify your protected health information;

• Receive an accounting of certain disclosures made by us of your protected health information; and,

• You may file a complaint with the HHS Secretary as to any violation by us of your privacy rights, which must be filed within 180 days of the violation.

We have the following duties under the privacy rules:

• To only utilize your protected health information as set forth in the attached Consent Form and/or Authorization Form;

• To obtain your written consent to use your protected patient information for treatment, payment or health care operations, and to refuse treatment if you refuse to sign the Consent Form;

• To obtain your written authorization to use your protected patient information for any purpose other than treatment, payment or health care operation;

• To use reasonable efforts to limit the amount of protected health information that is used, disclosed or requested to the minimum degree necessary where such information is used, disclosed or requested for purposes other than treatment; and,

• To obtain satisfactory assurances from our business associates who render services to our office that your protected health information will be safeguarded by them.

Please note that we are not obligated to:

• Honor any request by you to restrict the use or disclosure of your protected health information;

• Amend your protected health information if, for example, it is accurate and complete; or,

• Provide an atmosphere that is totally free of the possibility that your protected health information may be overheard by other patients and third parties.

If you have any questions about the information in this Notice, please let us know. Thank you.


PRIVACY CONSENT

This form is required by the new patient privacy regulations recently issued by the United States Department of Health and Human Services. Prior to commencing your orthodontic treatment, you must review, sign and date this form. Your protected health information (i.e., individually identifiable information such as names, dates, phone/fax numbers, email addresses and demographic data) may be used in connection with your treatment, payment of your account or health care operations (i.e., performance reviews, certification, accreditation and licensure). You have the right to review our office’s privacy notice prior to signing this Consent Form, a copy of which was given to you with this Consent Form. You have the right to request restrictions on the use of your protected health information. However, we are not required to, and may not, honor your request. We may amend the attached privacy notice at any time. If we do, we will provide you with a copy of the changes, and the changes may not be implemented prior to the effective date of the revised notice. You may revoke this Consent at any time in writing. However, such revocation will not be effective to the extent that any action has been take in reliance on this Consent. Thank you for your cooperation. Please let us know if you have any questions. _____________________________ Patient’s Signature _____________________________ Print Name _____________________________ Date


PRIVACY AUTHORIZATION

This Authorization is required by the privacy regulations recently promulgated by the United States Department of Health and Human Services. Your protected health information, including individually identifiable information, such as name, dates, phone/fax numbers, email addresses, demographic data, photographs, x-rays, study models and IDENTIFY SPECIFIC DATA will be used or disclosed for the purpose of (check all that apply): Lectures/presentations; Publications; Research; Practice Marketing; and/or Other (specify):__________________________________________________________ This information will be disclosed by the following people:____________________________ ______________________________________________________________________________. This information will be disclosed to the following people/entities:______________________ ______________________________________________________________________________. This Authorization will expire on INSERT DATE. You have the right to revoke this Authorization at any time in writing. However, your revocation will not be effective to the extent that this Authorization has been relied on. The information used or disclosed per this Authorization may be subject to re-disclosure by the recipient(s), and thus, no longer protected by the privacy rules. _______________________________ Patient Signature _______________________________ Print Name _______________________________ Date


PRIVACY AGREEMENT

This Privacy Agreement is entered into by DOCTOR’S NAME (the “Orthodontist”), and BUSINESS ASSOCIATE NAME (the “Business Associate”) effective as of the date of signature by the last party, and per the privacy rules promulgated by the United States Department of Health and Human Services (HHS). In connection with the Business Associate’s service to the Orthodontist, certain protected health information (as defined by the HHS rules, and including individually identifiable information such as names, dates, phone/fax numbers, email addresses and demographic data) will be disclosed by Orthodontist to the Business Associate. All such information may only be used in connection with the treatment of the patient, payment of or for the patient, and the health care operations (i.e., performance reviews, training, certification, accreditation and licensing) of the Orthodontist if the patient to whom the information relates has executed a written consent to such use. Such information may be used for any other purpose only after the patient to whom the information applies has executed an authorization. Any information requested, used or disclosed for any purpose other than in connection with treatment may only be requested, used or disclosed to the limited degree necessary to accomplish the purposes for which such request, use or disclosure is made. Business Associate agrees to be bound by this provision, and further agrees to maintain the confidentiality of all protected health information it receives from Orthodontist through, for example, not disclosing any such information to any other person or entity at any time during or after the relationship with Orthodontist ends. Business Associate agrees that it has the necessary policies, procedures and safeguards in place to permit its compliance with this Agreement. This Agreement and the underlying relationship between Orthodontist and Business Associate may be terminated by Orthodontist if Orthodontist determines that Business Associate has violated any material term hereof. In the event of a conflict between this Agreement and any other Agreement between Orthodontist and Business Associate, this Agreement shall control. Except as modified herein, any such other Agreement is hereby ratified and affirmed. In witness whereof, the parties have signed this Agreement on the dates set forth by their signatures. ______________________________________ ____________________________________ Orthodontist Business Associate ______________________________________ ____________________________________ Date Date


Patient Education / Sample Letters and FormsPatient Education / Sample Letters and FormsPatient Education / Sample Letters and FormsPatient Education / Sample Letters and Forms

Patient education will help to avoid problems. Establishing your office policy at the very

beginning of the relationship with a patient sets the ground rules for a productive and satisfying experience for the patient.

When problems arise, it is very important that you prevent the occasional claim related complication from adversely affecting your doctor-patient relationship. Discuss the situation with the patient/insured as soon as possible. The AAO Third Party Hotline is a valuable AAO service to its members and staff and can offer you assistance in dealing with claims related problems. Take advantage of this opportunity if needed. The number is (314) 993(314) 993(314) 993(314) 993----1700.1700.1700.1700.

The following sample policies, patient education information, and sample letters and forms have been helpful in avoiding or clarifying and solving problems should they occur. We are thankful of various SAO members who have shared this information with us.

STEP-BY-STEP PROCESSING OF DENTAL INSURANCE FOR MANAGED CARE PLANS PATIENT EDUCATION (3 pages) A Sample Office Policy B Sample Policy for Office not Accepting Orthodontic Insurance (but encouraging FSA) C Sample Policy for Office not Accepting Orthodontic Insurance (but encouraging DR) D Sample Explanation of Orthodontic Insurance Benefit with Sample Information Form SAMPLE LETTERS AND FORMS # 1 Letter from Patient to Insurance Company:

Refusal of Request for Tax Identification Number # 2 Letter from Patient to Insurance Company: Refusal of Request for Continuation of Treatment Form i.e. Dates of Service # 3 Letter from Patient to Insurance Company: Refusal of Request for Orthodontic Records # 4 Letter from Doctor to Patient: Doctor’s Refusal to Accept Assignment of Benefits # 5 Letter from Doctor to Patient: Acceptance of Assignment of Benefits as Non-provider for Insurance # 6 Helpful Information to Patient: Denial of Claims # 7 Letter from Patient to Insurance Company: Denial of Claim # 8 Letter from Doctor to Patient: Doctor Non-participation in Preferred Provider Plans # 9 Office Policy Regarding Monthly/Quarterly Continuation of Treatment Forms #10 Insurance Verification Form #11 Insurance Benefits/Payment Agreement #12 Relevant Sections of the IRS Code Regarding Orthodontics and FSAs #13 Sample Sales Letter for Direct Reimbursement #14 Instructions for Setting Up a Direct Reimbursement Plan in Your Office #15 Request for Reimbursement of Dental Expenses from Employee Direct Reimbursement Plan #16 FSA Election #17 Computing FSA Deductions #18 Claim for FSA Reimbursement

#19 Sample Form To File Complaint With State Insurance Commissioner #20 Sample Form To File Complaint To AAO

#21 Report On Insurance Refusals/Requests For Additional Information


STEP-BY-STEP FILING OF DENTAL INSURANCE FOR MANAGED CARE PLANS

GOAL: Provide the means for affordable orthodontic treatment and payment guidelines. PURPOSE: Provide a systemic means of filing orthodontic dental insurance while maintaining accountability for timely payment by the insurance company. STEP 1: INITIAL TELEPHONE CALL After determining the service the caller wants and setting an appointment. Check to see if the patient (parent) has dental insurance through a HMO. If so, explain that the patient may need a referral from the primary care provider or preauthorization from the HMO. Stress that the patient needs to bring the prescription or the referral to the initial appointment (HMO only). STEP 2: INITIAL OFFICE VISIT Photocopy the front and back of the insurance card. Make sure you have the following information:

• NAME OF DENTAL INSURANCE COMPANY

• TELEPHONE OF DENTAL INSURANCE COMPANY

• MAILING ADDRESS FOR CLAIMS ADMINISTRATION OF DENTAL INSURANCE COMPANY (IF FILING PAPER CLAIMS)

• SOCIAL SECURITY # OF PERSON RECEIVING BENEFITS

• GROUP # OF DENTAL PLAN

• PLAN # New Patient coordinator informs the patient of his/her benefits and explains office policy

• Does office accept assignment of benefits or will office file insurance claims with check being paid directly to patient?

• If insurance company does not pay within xx days, patient will be asked to pay and seek reimbursement from dental insurance company

• Records fee due when taken

• Initial treatment fee due when braces are placed

• Insurance claims filed on day services are rendered While the patient is waiting to be seen, New Patient Coordinator or Insurance Coordinator calls the insurance company to request the following information re: the patient's orthodontic benefits:

• Verify benefits

• Check eligibility

• Check benefit amount(s)

• Plan maximum: o Is it lifetime or annual? o How is it paid: 50% or 80% etc.

• Age limit

• Waiting period

• Deductibles

• Amount of benefit already used DOUBLE CHECK MAILING ADDRESS FOR CLAIMS AND TRY TO GET FAX# WHICH COULD EXPEDITE PROCESSING IF CLAIMS ARE “LOST”. If office is unable to reach the insurance company while the patient (parent) is in the office, reassure the patient (parent) that office will call after it is learned what orthodontic benefits the insurance plan offers and explain the benefits over the telephone.


STEP 3: FILING OF INSURANCE AND MASTER FILE

• Patients with insurance benefits will have individual files (initiated by New Patient Coordinator and maintained by Insurance Coordinator).

• Files will be maintained in filing cabinet and placed in alphabetical order.

• A copy of every form that is mailed to the insurance company will be placed in file in sequential order by date.

• All correspondence pertaining to that individual patient, including Explanation of Benefits (EOBs), notices of changes/cancellation, etc. will be attached, and acted on as needed.

To file an insurance form:

• Fill out patient’s original copy or ADA generic claim or orthodontic software claims form. HINT: Make initial fee high and the monthly payments so that they charge out on a monthly basis equal to or less than the treatment time. The higher down payment means more reimbursement initially. All insurance companies have a ratio as to how they reimburse on the initial placement. They do not state that, so if the initial placement fee is high, you should get the highest possible reimbursement upfront. For example: For a fee of $3500, make the initial fee $1500; and 20 monthly payments of $100.

• The original form is mailed with the dates of service and appropriate codes and signatures.

• Insurance form should be completed and mailed on date appliances are placed.

• Copies of original insurance form should be placed in the patient’s chart as well as in the master file.

STEP 4: MAINTAINING INSURANCE TICKLER FILE For some insurance companies, you only file once and the rest is automatic. For other insurance companies, a separate “tickler file” should be kept and maintained. This will have all individual insurance forms pre-printed and placed in the appropriate place for future filing of all insurance forms. The correct place for future claims will depend on the already predetermined payment schedule for insurance companies, e.g. monthly vs. quarterly. For example: If the patient is a 24-month treatment, you will have 24 monthly installments or 8 quarterly installments printed. If the patient is a 12-month treatment, you will have 12 monthly installments or 4 quarterly installments printed.

• For each patient, you print a master or original claim form, and then make copies of the original claim to equal the number of monthly (quarterly) payments according to the schedule.

• Print out monthly (quarterly) claims equal to the number of months (quarters) of treatment.

• Attach the copy of the original claim to the monthly (quarterly) installment claim forms. The monthly (quarterly) claim goes on top and in the “REMARKS FOR UNUSUAL SERVICES” , write in red SEE ATTACHED COPY.

• Make sure each month and charge for that month (quarter) is written in.

• Place each monthly (quarterly) installment claim in the appropriate month to be filed.


TICKLER FILE

The tickler file will be a minimum of 24 one-month folder files. For example, January through December current year and January through December next year.

Each month, a new date is added for 24 months in advance to replace the current month. If you are sending out all of January 2007 claims, you now want to move the file folder to the back of the file box for January 2007 claims. This now brings February 2007 claims to be the next filed.

On the day that the patient is seen, the insurance form should be mailed.

When benefits are received, the initial EOB should be checked with the insurance benefit in the computer or in your records to make sure it matches. The EOB should be placed into the insurance file, with the most current placed on the top. MONTHLY MONITORING

1. All forms are sent to the insurance companies from the tickler file for that month. 2. Once a month, the insurance file report is printed on the 1st of the month (if using

orthodontic software) in order to follow up on initial claims sent. Sending a form (by mail or electronically) does not guarantee that you will get paid. Insurance companies are in the business to make money and will stall on paying the benefits for as long as possible. YOU MUST FOLLOWUP ON ALL CLAIMS SUBMITTED. The monthly monitoring will list all outstanding insurance claims so that you can monitor payment.

3. If an insurance company has not paid on a claim already sent, it must first be called to check on the status of the claim. If the company claims it did not receive the original claim, first ask if they have a fax so that a copy can be faxed to them. If not, then go through procedure again to file an initial claim. DOCUMENT THE NAMES OF THE INDIVIDUALS WITH WHOM YOU SPOKE, THE DATE, AND THE TIME OF THE CALL.

4. Once a patient’s insurance benefits have been maximized, REMOVE FROM THE MASTER FILE AND PLACE IN PATIENT FILE FOR FUTURE REFERENCE IF NEEDED.

WHAT TO DO IF BENEFITS ARE CANCELLED

If you receive notification from the insurance company that the benefits have been cancelled or are not available:

• The patient must be contacted and made aware of this information to make sure there is not an error on the part of the insurance company.

• Once insurance cancellation is verified and no further benefits are available, the financial coordinator notifies the patient (parent) so he/she can pay the insurance balance in a lump sum payment OR change the financial contract and adjust the monthly fees over the original remaining payment months.

• The new contract needs to be signed by the patient by the time of the next appointment. The patient cannot be seen without a new financial contract.

• Remove all remaining forms from the tickler file.


PATIENT AND DENTAL BENEFITS INFORMATION PATIENT AND DENTAL BENEFITS INFORMATION PATIENT AND DENTAL BENEFITS INFORMATION PATIENT AND DENTAL BENEFITS INFORMATION

DATE________DATE________DATE________DATE________________ PATIENT’S NAME____________________________________DATE OF BIRTH_____/_____/______PATIENT’S NAME____________________________________DATE OF BIRTH_____/_____/______PATIENT’S NAME____________________________________DATE OF BIRTH_____/_____/______PATIENT’S NAME____________________________________DATE OF BIRTH_____/_____/______ Mo / day / year RESPONSIBLE PARTY________________________________SOCIAL SECURITY #____RESPONSIBLE PARTY________________________________SOCIAL SECURITY #____RESPONSIBLE PARTY________________________________SOCIAL SECURITY #____RESPONSIBLE PARTY________________________________SOCIAL SECURITY #____----________________----____________________ ADDRESS___________________________________________________ADDRESS___________________________________________________ADDRESS___________________________________________________ADDRESS_______________________________________________________________________________________________________________________________________________ PHONE (HOME)_____________________(WORK)_________________(CELL)___________________PHONE (HOME)_____________________(WORK)_________________(CELL)___________________PHONE (HOME)_____________________(WORK)_________________(CELL)___________________PHONE (HOME)_____________________(WORK)_________________(CELL)___________________

TYPE OF BENEFIT: INDEMITY ________ OR

PPO ________

DHMSO ________

PLHSO ________

SELF-FUNDED

DIRECT REIMBURSEMENT ________ DR

DIRECT ASSIGNMENT ________ DA

FLEX PLAN ________ FSA

MEDICAL SAVINGS ACCOUNT ________ MSA

HEALTH REIMBURSEMENT ARRANGEMENT________ HRA

MAXIMUM BENEFIT___________________________ REMAINING BENEFIT AVAILABLE________________ EMPLOYERS NAME___________________________________________________________________ DENTAL BENEFIT PROVIDER NAME____________________________POLICY #__________________ ADDRESS _____________________________PATIENT ID #_______________ PHONE________________________________FAX_______________________ CONTACT PERSON_________________________________________________ EFFECTIVE DATE___________________ EXPIRATION DATE_________________ I hereby authorize release of any information relating to claim. ______________________________________________________________________________ Date_______________________________________________________________ Date_______________________________________________________________ Date_______________________________________________________________ Date_________________ Signature


INFORMATION ON THIRD PARTIESINFORMATION ON THIRD PARTIESINFORMATION ON THIRD PARTIESINFORMATION ON THIRD PARTIES (One sheet per Insurance Company)

NAME OF INSURANCE CO._________________________________________________ ADDRESS_________________________________ ADDRESS______________________ ________________________________ FOR CLAIMS____________________ ________________________________ (if different)____________________ Telephone #____________________________ Fax#__________________________ DateDateDateDate Ext Ext Ext Ext Patient’s Name/ Insured’s Name____ Patient’s Name/ Insured’s Name____ Patient’s Name/ Insured’s Name____ Patient’s Name/ Insured’s Name____ ____ Talked to___________________________ ____ Re: _________________________________ ____Talked to___________________________ ____ Re: _________________________________ ____Talked to___________________________ ____ Re: _________________________________ ____Talked to___________________________ ____ Re: _________________________________ ____Talked to___________________________ ____ Re: _________________________________ ____Talked to___________________________ ____ Re: _________________________________ ____Talked to___________________________ ____ Re: _________________________________ ____Talked to___________________________ ____ Re: _________________________________ ____Talked to___________________________ ____ Re: _________________________________ ____Talked to___________________________ ____ Re: _________________________________ PATIENT’S/EMPLOYERS USING THIS INSURANCE:PATIENT’S/EMPLOYERS USING THIS INSURANCE:PATIENT’S/EMPLOYERS USING THIS INSURANCE:PATIENT’S/EMPLOYERS USING THIS INSURANCE: ____________________ / _____________________ ____________________ / ___________________________________ / _____________________ ____________________ / ___________________________________ / _____________________ ____________________ / ___________________________________ / _____________________ ____________________ / _______________ ____________________ / _____________________ ____________________ / ___________________________________ / _____________________ ____________________ / ___________________________________ / _____________________ ____________________ / ___________________________________ / _____________________ ____________________ / _______________ __________________________________________________ / _____________________ ____________________ / _________________________ / _____________________ ____________________ / _________________________ / _____________________ ____________________ / _________________________ / _____________________ ____________________ / _______________ ____________________ / _____________________ ____________________ / ___________________________________ / _____________________ ____________________ / ___________________________________ / _____________________ ____________________ / ___________________________________ / _____________________ ____________________ / _______________ COMMENTS/HELPFUL HINTS REGARDING THIS INSURANCE CO.COMMENTS/HELPFUL HINTS REGARDING THIS INSURANCE CO.COMMENTS/HELPFUL HINTS REGARDING THIS INSURANCE CO.COMMENTS/HELPFUL HINTS REGARDING THIS INSURANCE CO.


A. SAMPLE OFFICE POLICY FOR OUR PATIENTS WHO HAVE ORTHODONTIC “INSURANCE”

Orthodontic treatment is handled in a different manner than conventional dental benefit plans. This office is happy to cooperate with families who are covered by dental insurance. We only ask that you read your policy to be sure that you are fully aware of any limitations of the benefits provided. Normally orthodontic treatment has a life-time maximum benefit from $500-1500 or a percentage of that total fee. The fees we charge for services rendered to those who are insured are our usual and customary fees charged to all patients for similar services. Your policy may base its allowances on a fixed schedule, which may or may not coincide with our usual fees. You should be aware that different insurance companies vary greatly in the types of coverage available. Also, some companies pay claims promptly, and others delay payments many months. Since we have no say in the selection of your insurance company, we ask that you look upon your insurance company as a device that reimburses you for dental expenses. It is your company, and it is your responsibility to see that you are reimbursed promptly. As a courtesy service to you, we will complete all forms pertaining to your claim and send them promptly to your company. With increasing numbers of orthodontic benefit plans, we find it impossible to have a complete and accurate knowledge about all of these programs or our individual patient’s status with respect to their own program. Therefore, our office follows the policies on insurance as described below:

1. If you are eligible for orthodontic benefits under your plan, we will complete the American

Dental Association standardized Claim Form for you to be mailed to your company so that you may be reimbursed for your payments made to our office.

2. Within the estimated treatment time our patients can provide: cancelled checks, cash receipts, and the above form along with the insured’s signature to provide adequate proof of continuing treatment to the insurance company.

3. Direct payments from the insurance company will NOT be accepted by our office. All benefit payments from the insurance must be made DIRECTLY to the insured.

4. Preauthorization by the insurance company should be strictly limited to: (a) defining the patient’s eligibility, (b) establishing the extent of coverage, and (c) recognition of the orthodontist’s determination of the extent of service to be rendered. Proper establishment of these factors does not require the submission of diagnostic records.

Records can be made available for review in our office by a professionally qualified insurance representative if a more detailed understanding of the case is necessary.

Traditionally, the finest orthodontic service has been based on a mutual understanding between the doctor and the patient; and we wish to maintain this professional relationship in our office. We will be glad to answer any questions you may have regarding your orthodontic coverage.


B. Sample Policy for Office not Accepting on Orthodontic InsuranceB. Sample Policy for Office not Accepting on Orthodontic InsuranceB. Sample Policy for Office not Accepting on Orthodontic InsuranceB. Sample Policy for Office not Accepting on Orthodontic Insurance

(but encouraging FSA)(but encouraging FSA)(but encouraging FSA)(but encouraging FSA)

Dental insurance is a contract between your employer and a particular insurance company. All patients are financially responsible for the entire fee and insurance companies are responsible for reimbursing the employee. Insurance reimbursement schedules vary and may not coincide with our convenient office monthly budget plan; however, each contract will pay out over the course of treatment (an amount never more than 50% of the total fee). In fact, the insurance company’s maximum amount may be far less than 50% of the fee, because typically, it is a per-person-life-time benefit of $1,000 or $1500 while comprehensive orthodontic treatment fees often exceed $5,000. Our office does not belong to any managed care plans where the patient’s right to choose his/her dentist has been eliminated and a fee has been pre-negotiated for a specific service. Patients who wish their choices and treatment options restricted will find “managed care” orthodontics available. We have decided not to reduce or diminish our service to fit Third Party requirements and controls. We encourage our patients to make use of flexible spending accounts (FSAs) or medical savings accounts as additional options or alternatives for paying out-of-pocket. These are tax-deductible plans equal to your tax bracket plus 7.65% withheld for Social Security etc. A 28-40% savings on an orthodontic fee in the $4,000 range is a significant discount at Uncle Sam’s expense and a considerable savings for required dental expenses. Section 125 of the IRS Codes allows the use of pre-tax dollars for qualified health care expenses; however, your employer must make the decision to activate such a plan. Flex Plans or “Cafeteria Plans” can be used with insurance to cover the co-payment or services not covered by the insurance contract. In summary, dental insurance is a highly variable benefit and can be renewed, revised, or completely changed to a new company annually. We want our patients to know as much about the subject of dental benefits and its variations as possible. There are sound and proven reasons why the dental profession always encourages self-funded dental benefit plans that are dollar-based rather than procedure-based and plans that allow freedom to choose any dentist. The dental profession believes it is in the patient’s best interest as well as his/her responsibility to decide with his/her dentist the best service for long-term dental health rather than have that decision made by the insurance company’s review “expert” who may not be a licensed dentist or who could not be expected to appreciate the demands of a discriminating/knowledgeable purchaser of the best and finest dentistry. Orthodontics is a service profession extensively personalized and dedicated to creating a long term worthy investment in oral health with the added enhancement of facial attractiveness so critical to well being. Of all the things you wear, your smile is the most important. DOCTOR’S NAME OFFICE CONTACT INFORMATION


C. Sample Policy for OffC. Sample Policy for OffC. Sample Policy for OffC. Sample Policy for Office not Accepting Orthodontic Insurance ice not Accepting Orthodontic Insurance ice not Accepting Orthodontic Insurance ice not Accepting Orthodontic Insurance (but encouraging DR)

Date Name Address City, State, Zip Dear (Patient): Our office is committed to communicating with you at every step of your orthodontic care. Good communication is an important key to providing excellent orthodontic care. That’s why we felt it is important to inform you that the dental benefits program your employer provides for you is a preferred (or “network”) plan. In these types of plans, the participating doctors have agreed to discount their normal fees. Thus, the doctor is listed as a “preferred provider” in these network plans. Our office is not a participating provider with the dental network associated with your employer’s program. However, this does not mean you cannot receive treatment from our office. You have the You have the You have the You have the right to receive treatment from our office and benefits from your employer even though we do not right to receive treatment from our office and benefits from your employer even though we do not right to receive treatment from our office and benefits from your employer even though we do not right to receive treatment from our office and benefits from your employer even though we do not participate in the network.participate in the network.participate in the network.participate in the network. It is probable that you may incur greater out-of-pocket costs by receiving care out of the network. Please check with your dental benefits plan or your employer’s human resources professional for details on any actual cost differences. By the way, do you know that there are other dental plans on the market, which will allow you to visit the dentist or orthodontist of your choice without a reduced benefit? One such plan is called “direct reimbursement”. With direct reimbursement you can visit the dentist or dental specialist of your choice and have a dental program that covers any and all types of dental treatment. If you would like additional information on this type of plan, please contact. Thank you for taking the above into consideration before you make the decision on who will provide your orthodontic treatment. If I may be of further assistance, please call me at any time. Sincerely, DOCTOR’S NAME OFFICE CONTACT INFORMATION


D. WHAT YOU SHOULD KNOW ABOUT YOUR ORTHODONTIC INSURANCE BENEFITD. WHAT YOU SHOULD KNOW ABOUT YOUR ORTHODONTIC INSURANCE BENEFITD. WHAT YOU SHOULD KNOW ABOUT YOUR ORTHODONTIC INSURANCE BENEFITD. WHAT YOU SHOULD KNOW ABOUT YOUR ORTHODONTIC INSURANCE BENEFIT

As you begin orthodontic treatment, an understanding of how your orthodontic insurance works will be helpful in receiving the maximum benefit for which you are eligible. Orthodontic benefits are separate from dental benefits and usually have a different percentage of benefit and lifetime maximum. Even though you are covered by dental insurance, you may not have orthodontic coverage. A plan booklet is generally available to you from your employer who describes the details of your policy and should outline any orthodontic coverage that might be available to you and your family. Familiarizing yourself with the details of your coverage may avoid misunderstandings later. Please do not hesitate to call the insurance carrier to inquire about coverage and benefit payment schedules. EligibilityEligibilityEligibilityEligibility

The requirements for eligibility vary. Some policies require a waiting period for new employees, while others may require a specific number of hours to be worked per pay period to remain eligible. If eligibility is lost during orthodontic care, the balance of any outstanding benefit is also lost. Orthodontic coverage in some cases is available only to dependent children under the age of 19. If you are unsure of eligibility requirements, you should refer to the plan booklet or contact the insurance administrator at your place of business. How BeneHow BeneHow BeneHow Benefits Are Calculated?fits Are Calculated?fits Are Calculated?fits Are Calculated?

There is no universal formula for calculating the amount to be paid for orthodontic services. It is common for orthodontic benefits to be paid at 50% of the treatment fee to a lifetime maximum amount. Your policy may have a yearly deductible. What If I Have Multiple Coverage?What If I Have Multiple Coverage?What If I Have Multiple Coverage?What If I Have Multiple Coverage?

If the patient is covered by more than one orthodontic insurance policy, the carriers will determine which plan is considered the primary policy. Often this determination is made by birthdates of the insured parties. This method of determination is not a universal formula, but is individual to each carrier. The secondary insurance carrier will not declare or pay benefits until the primary carrier has determined the charge which it will cover. The secondary carrier usually requires the primary carrier to send written confirmation of benefits covered. Receipt of BenefitsReceipt of BenefitsReceipt of BenefitsReceipt of Benefits

The benefits from your insurance will be presented to you on a schedule determined by your carrier relative to your individual insurance policy. The insured party will receive the benefit and is responsible for supplying whatever verification/continuation of treatment information that is necessary. It is very important to inquire from your insurance carrier if this verification is required and what type of information should be submitted to them on either a monthly or quarterly basis for payment reimbursement. The timeliness of your actions will reflect the response time for receiving your benefits and the insurance carrier may not provide you with reminders. How We Can HelpHow We Can HelpHow We Can HelpHow We Can Help

Please provide my office with the appropriate form from the carrier with your portion of the form completed and signed. We will complete the form and attempt to maximize the benefit for the patient.

RecommendationsRecommendationsRecommendationsRecommendations We recommend that you document all of your written communications and telephone conversations with your carrier and the name of the party you spoke with for future information if needed.


SAMPLE LETTERSSAMPLE LETTERSSAMPLE LETTERSSAMPLE LETTERS

# 1 Letter to Insurance Company# 1 Letter to Insurance Company# 1 Letter to Insurance Company# 1 Letter to Insurance Company Refusal of Request for TaxRefusal of Request for TaxRefusal of Request for TaxRefusal of Request for Tax Identification Number (from AAO) Identification Number (from AAO) Identification Number (from AAO) Identification Number (from AAO)

DATE NAME INSURANCE COMPANY ADDRESS CITY, STATE, ZIP RE: Request for Provider Federal Identification Number Dear NAME: I am writing in response to the Additional Information Request from your company to DOCTOR’S NAME in reference to a dental claim on PATIENT’S NAME, dependent child of INSURED NAME DENTAL PLAN I.D. #XXXXXX. Based on your request of DATE OF REQUEST, the claim has not been processed because your information lacks DOCTOR’S NAME’ Tax I.D. number. However, because DOCTOR’S NAME is not accepting assignment, we do not believe it is necessary to provide this information. As you probably know, the purpose of a tax I.D. number, as dictated by the federal government, is to report earned income to the IRS. The American Association of Orthodontists (AAO) agrees that the tax I.D. number is a necessary requirement when doctors accept direct assignment of benefits. However, for doctors who do no accept assignment, we recommend that they do not provide their Tax I.D. number because of errors involving the possibility of double income reporting. In addition, since the requirement to report income is the responsibility of the doctor when they do not accept assignment, the AAO and our membership feel there is no legal reason for insurance companies to have this confidential information. Therefore, only if the doctor accepts assignment does it become necessary for the doctor to submit their Tax I.D. number, so that the insurance company can report income and provide a 1099. We have verified this matter with numerous tax officers at the IRS, as well as the IRS Research Department. In an effort to not penalize the insured due to conflicting interpretations of IRS regulations, we would appreciate it if you could expedite the processing of this claim so that the insured receives reimbursement as quickly as possible. Thank you, in advance, for your cooperation in this matter. Please contact me at TELEPHONE NUMBER to confirm that you have resolved this matter. Sincerely, EMPLOYEE’S NAME TITLE


#2 Letter to Insurance Company: Refusal of Request for Continuation of Treatment Form i.e. dates of service (from AAO)

DATE NAME INSURANCE COMPANY ADDRESS CITY, STATE, ZIP Dear NAME: It has recently come to my attention that your company only pays for dental claims filed in connection with specific dates of service. Given the nature and time span of orthodontic treatment, this policy is quite troublesome. As a convenience to their patients, orthodontists generally allow payment of orthodontic fees to be made in easy monthly installments. Thus, a patient/insured may incur an expense during a month that he / she has not visited the doctor. This means that the insured will not get their full benefits that are due them. Most insurance companies have agreed to accept copies of office receipts or cancelled checks as proof of continued orthodontic treatment. It is kindly asked that you consider amending your procedures in this manner. Should you have any questions, please contact me at TELEPHONE NUMBER. Sincerely, EMPLOYEE’S NAME TITLE


#3 Letter to Insurance Company:

Refusal of Request for Orthodontic Records (from AAO) DATE NAME INSURANCE COMPANY ADDRESS CITY, STATE, ZIP RE: Insured: INSURED NAME Group: POLICY Patient: PATIENT NAME Control Number: NUMBER Dear NAME: I am writing this letter on behalf of DOCTOR’S NAME regarding your request for submission of dental records in order to process the above referenced claim. Since the vast majority of claims administrators do not regularly make such requests, these additional expenses are not reflected in the fee for service. Therefore, it is important to consider the following concerns when reviewing your administrative policies:

(1) Orthodontists are required BY LAWBY LAWBY LAWBY LAW to maintain all original patient records. (2) In order to comply with a request for patient x-rays and records, orthodontists must incur

additional expenses for costs such as staff time, duplication, and postage. If you must receive such records, it is reasonable for doctors to request claim administrators to pay a prepaid fee for the duplicate records. As an alternative to requesting the patient’s records, you may consider contacting the orthodontist’s office if you have any questions regarding the claim. It is in the best interest of all parties involved to resolve this claim as soon as possible. If you have any questions, please do not hesitate to contact me at TELEPHONE NUMBER. Sincerely, EMPLOYEE’S NAME Dental Benefits Specialist C: Dr.’s office


#4 Letter from Doctor to Patient:

Doctor’s Refusal to Accept Assignment of Benefits

DATE INSURED’S NAME ADDRESS Dear INSURED’S NAME: As a courtesy, we file insurance claims on behalf of our patients for orthodontic services performed in our office. You will receive reimbursement from your insurance company under the terms of your plan. It is important to remember that these benefits belong to you and it is up to you to ensure that you are receiving appropriate reimbursements. You will be responsible for paying our office for any services provided that are not covered by your insurance company and for any fees that are above the amount payable by your benefits program. Unlike most medical insurance, employees purchase dental insurance for their employees to supplement the cost of care; therefore, most dental benefits do not cover the complete cost of care. In cases where conflicts arise over reimbursement, denial of claims or proposed treatment, or other administrative problems, for a service that appears to be covered by your dental benefits plan, we recommend that you involve your employer (or plan purchaser) in order to find an appropriate solution. Sincerely, DOCTOR’S NAME


#5 Letter from Doctor to Patient: Acceptance of Assignment of Benefits as Non-provider for Insurance

Companies

DATE INSURED’S NAME ADDRESS Dear INSURED’S NAME: As a courtesy, we file insurance claims on behalf of our patients for orthodontic services provided in our office. Although we may not have a contract as a provider for your insurance company, you may elect to assign the benefits payable to you to our office and apply these payments toward the cost of treatment. If we are filing claims on your behalf, please be sure to sign the authorization of benefits form on the ADA claim form. This allows us to receive reimbursement directly from the insurance carrier on your behalf. We do reserve the right to accept the assignment of benefits based upon the particular contract that has been entered into between you and your employer. Most orthodontic benefits provided by your employer may only cover a portion of the cost of treatment. You will be responsible for the balance of the amount not covered by your insurance company. Under certain circumstances, we may not be willing to accept an assignment of benefits which would preclude us from receiving our full fee. Be sure to consult your benefits manager or plan administration for a complete understanding of your insurance coverage. Sincerely, DOCTOR’S NAME


#6 Helpful Information to Patient Denial of Claims (from AAO)

If you receive a denial of a claim for orthodontic benefits from a dental insurance company or other TPA, where the employer has included orthodontic coverage, you as a patient or parent of a patient, with the help of your provider, should:

• Retain a copy.

• Request a copy of your plan documents and summary plan description. These documents should detail the claims procedure, how claims are denied and the rights of the participant to appeal denials.

• Communicate to the insurance company or TPA your objection to the reason for denial in writing, referencing the particular reason, in accordance with the plan documents, that the claim is being denied.

• If the reason for denial does not fit the claims procedure and how claims are denied in your plan documents and summary plan description, quote those areas in the following sample response letter (Exhibit 7).

• The above information should be sent to your employer, the TPA, and, if applicable, the insurance company.

Additional Helpful Ideas for Patient Whose Claim Has Been Denied

• Exhaust all reasonable avenues for resolution with the insurer. This means using all levels of appeal.

• Make sure all supporting documentation is included with the claim.

• File a complaint with your Employee Benefits Manager or human resources person.

• If a claim cannot be resolved through the appeals process and if the plan is State regulated, contact the State Insurance Commissioner and file a complaint, which clearly outlines your case. (See Chapter 8)

• Ask your plan administrator what you are responsible for paying when you use your dental benefits (i.e. deductibles, co-payments).

• Read your plan carefully so that you are aware of the extent of your dental coverage.


#7 Letter from Patient to Insurance Company: Denial of Claim (from AAO)

DATE TPA ADDRESS RE: PATIENT’S SOCIAL SECURITY #, FULL NAME, and CLAIM NUMBER Dear TPA: I received notice that the above referenced orthodontic claim was denied for the following reason: INCLUDE THE EXACT WORDING ON THE DENIED CLAIM After reviewing my plan document and summary plan description, I request that you reevaluate the claim because the orthodontic claim does fit the benefit criteria stated in Section: INSERT SECTION NUMBER OF PLAN DOCUMENT OR SUMMARY PLAN DESCRIPTION. For Example: In Section V. 2b (“Orthodontic benefits are paid after a $50.00 deductible, at 50% of the fee up to a maximum of $1,000 for dependents up to the age of 19”). Sincerely, INSURED’S NAME


#8 Letter from Doctor to Patient: Doctor Non-participation in Preferred Provider Plans

DATE NAME ADDRESS CITY, STATE, ZIP Dear PATIENT’S NAME: Our office is committed to communicating with you at every step of your orthodontic care. Good communication is an important key to providing excellent orthodontic care. That’s why we felt it is important to inform you that the dental benefits program your employer provides for you is a preferred (or “network”) plan. In these types of plans, the participating doctors have agreed to discount their normal fees. Thus, the doctor is listed as a “preferred provider” in these network plans. Our office is not a participating provider with the dental network associated with your employer’s program. However, this does not mean you cannot receive treatment from our office. You have the You have the You have the You have the right to receive treatment from our office and benefits from your employer even though we do not right to receive treatment from our office and benefits from your employer even though we do not right to receive treatment from our office and benefits from your employer even though we do not right to receive treatment from our office and benefits from your employer even though we do not participarticiparticiparticipate in the network. pate in the network. pate in the network. pate in the network. It is probable that you may incur greater out-of-pocket costs by receiving care out of the network. Please check with your dental benefits plan or your employer’s human resources professional for details on any actual cost differences. By the way, do you know that there are other dental plans on the market, which will allow you to visit the dentist or orthodontist of your choice without a reduced benefit? One such plan is called “direct reimbursement”. With direct reimbursement you can visit the dentist or dental specialist of your choice and have a dental program that covered any and all types of dental treatment. If you would like additional information on this type of plan, please contact the American Association of Orthodontists at (800) 424-2841, the ADA or your State Dental Association. Thank you for taking the above into consideration before you make the decision on who will provide your orthodontic treatment. If I may be of further assistance, please call me at any time. Sincerely, DOCTOR’S NAME OFFICE CONTACT INFORMATION


#9 OFFICE POLICY REGARDING MONTHLY/QUARTERLY CONTINUATION OF TREATMENT FORMS

I do not sign these forms because IT IS A DISSERVICE TO YOU, THE INSURED. I charge you a total fee and break it into convenient monthly payments, which have no relation to office visits. Most insurance companies would reimburse you depending on your monthly office visits and not your financial agreement with this office. The problem arises when your office visits aren’t exactly once a month: Monthly Monthly Monthly Monthly Visits PaymentsVisits PaymentsVisits PaymentsVisits Payments January 1 $100.00$100.00$100.00$100.00 February 0 $100.00 $100.00 $100.00 $100.00 March 2 $100.00$100.00$100.00$100.00 Total $300.00$300.00$300.00$300.00

Benefits From ContinuationBenefits From ContinuationBenefits From ContinuationBenefits From Continuation Of Treatment Forms Of Treatment Forms Of Treatment Forms Of Treatment Forms $ 50.00 $ 50.00 $ 50.00 $ 50.00 (50 % of 100.00) $ 0.00 $ 0.00 $ 0.00 $ 0.00 (No Visits) $ 50.00$ 50.00$ 50.00$ 50.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00

Benefits From Benefits From Benefits From Benefits From Canceled ChecksCanceled ChecksCanceled ChecksCanceled Checks $ 50.00 $ 50.00 $ 50.00 $ 50.00 $ 50.00 $ 50.00 $ 50.00 $ 50.00 $ 50.00 $ 50.00 $ 50.00 $ 50.00 $150.00 $150.00 $150.00 $150.00

I would not be able to sign the form for February and you may not receive benefits for that month even though you had made a monthly payout to the office. By attaching copies of your canceled checks, or office receipt, to the monthly/quarterly form, you will receive all the benefits due you.

AMERICAN ASSOCIATION OF ORTHODONTISTSAMERICAN ASSOCIATION OF ORTHODONTISTSAMERICAN ASSOCIATION OF ORTHODONTISTSAMERICAN ASSOCIATION OF ORTHODONTISTS 460 NORTH LINDBERGH BOULEVARD

ST. LOUIS, MISSOURI 63141 (314) 993-1700

© AMERICAN ASSOCIATION OF ORTHODONTISTS

We do We do We do We do notnotnotnot accept accept accept accept assignment. assignment. assignment. assignment. Please send all Please send all Please send all Please send all payments directly payments directly payments directly payments directly to the employee. to the employee. to the employee. to the employee.

Member

SAO OFFICE INSURANCE GUIDESAO OFFICE INSURANCE GUIDESAO OFFICE INSURANCE GUIDESAO OFFICE INSURANCE GUIDE

#10 Insurance Verification Form

Insurance Verification form Medical / Dental Primary or Secondary Date______________________ Insured_______________________________________Employer_____________________________ SS #______________________________________Group #__________________________________ DOB_______________ Relationship to insured____________________________________________ Patient’s name_________________________________________DOB__________________________ Age______________Full time student status verify_________________________________________ Insurance Company Mailing Address for claims_____________________________________________________________ City______________________________________State____________ Zip_________________ Payor ID__________________________________Fax #________________________________ Can claim preauthorization and actual services be faxed?____________Yes_______________No Is Dr. a provider?__________Yes_________No Benefits paid to provider?_________Yes_________No Coverage: ________self________spouse_________family_________child___________other Any waiting period?____________________________________________________________ Max allowance_________________per person/family___________________year When does calendar year start?_________________________________________ Deductible______________________met____________________applied to________________ Benefit used to date_________________________ Fee schedule_________________________________or_________% UCR_________________ Age limits__________________________ Prev____________________ Sealants___________Flouride__________ Basic___________________ Frequency_________ how often_________ Major___________________ Crowns___________ built up 2950_______ Endo____________________ 5 yr replmct_______ Missing teeth co_____ OS_____________________ Are prostho pd at prep or seat date________ Nitros covered________________________ Limitations Exam 6months_________ 2 per year________other_____________________ Xrays FMX/Pano________3 years__________ other_____________________ BWX (2) (4) per 6 mo____________ year__________other__________ Prophy 6 months_______2 per year__________other________________________ Perio pro (D4910)_________________#years_______________________ Is patients claim form needed?______________________ Preauthorization needed? __________________________ Spoke to__________________________________conversation recorded____________________


#11 Insurance Benefits/Payment Agreement

(Hospital Name) for Jaw Surgery INSURANCE BENEFITS/PAYMENT AGREEMENT

Patient:_________________________________________ Date:________________________ Guarantor:______________________________________________________________________ As a service to you, we have verified your insurance benefits verbally with ___________________________________________Insurance Company. The benefits we verified are only verbally acknowledged by your carrier, NOT their guarantee of payment. Payment on your claim is subject to your insurance company’s review upon receipt of your claim. Your insurance company estimates they will cover the surgery at ____% of their fee schedule (which they do not verify by phone) beyond a deductible amount of $_____________. This deductible amount has/has not been met according to our verification. I further understand the following estimate of expenses: 1. Value of services rendered: $_________________ 2. Down payment: $_________________ 3. Estimated balance: $_________________ I understand I am responsible for that amount the insurance company does not cover. If the insurance company denies my claim or does not respond within 45 days, the balance above is due in full. If the insurance benefit exceeds the estimated balance, a refund will be sent to you. Dated the________day of____________________. 20_______. ____________________________________________________ Patient, Parent or Guarantor _____________________________________________________ Witness

______________________________________________________ Witness


#12 Relevant Sections of the IRS Code Regarding Orthodontics and Flexible Spending Accounts

Who Can Be Reimbursed:

• Expense must be for medical care for employee, employee’s spouse or dependents. IRS Code Section 152(a)

• This includes dependents whom the employee claims on his or her tax return as well as dependents for whom the employee doesn’t claim the exemption because that dependent receives gross income over the exemption amount. IRS Code Section 152 (a),(d)

• If the employee is divorced or separated, a child who is not the employee’s dependent under federal income tax law will be nonetheless treated as the employee’s child for purposes of the statutory provisions governing Health Flexible Spending Accounts. IRS Code Section 105(e)

Time Period for Reimbursable Expenses:

• The only expenses that can be reimbursed by a Health Flexible Spending Account are expenses incurred during the coverage period as defined in the employer’s plan document. IRS Code Section 125(b)(3)

Expenses Must be Supported by Adequate Paperwork:

• A Health Flexible Spending Account must require participants to provide a written statement from an independent Third Party stating that the medical expense has been incurred and the amount of such expense and a Health Flexible Spending Account participant must provide a written statement that the medical expense has not been reimbursed or is not reimbursable under any other health plan coverage. IRS Code Section 125

Is Orthodontic Care Reimbursable Under a Health Flexible Spending Account?

• Yes, IRS Code Section 213 (b)(1) is entitled “Medical, dental, etc. expenses” and the term “medical care” is defined to include “amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body….”

• Reimbursement of orthodontic fees paid entirely up-front might be considered aggressive by the IRS and not usually allowed. IRS Code Section 125

• Reimbursement under a Health Flexible Spending Account is related to both treatment and payment for the treatment. For example, the payment of 1/3 of a total price of treatment may not be reimbursable at the time of payment, but may be after an equivalent (i.e., 1/3) amount of the treatment is completed.

Example Regarding Orthodontic Expenses: In September 1997, Bobby’s parents contract with his orthodontist to have orthodontic treatment. During the first visit (October), the child will be x-rayed and fitted for braces. During the second visit (November), the braces will be installed. During the 15 subsequent monthly visits, the braces will be adjusted. Eventually (18 months after the first visit, if all goes as planned,) the braces will be removed, and perhaps a retainer will be fitted for use thereafter. For these services, Bobby’s parents pay $3,000 on the date of the first visit. In the above example, it is clear that the entire $3000 cannot be reimbursed as a calendar 1997-plan year expense, because in 1997, Bobby was not provided with all the care that gave rise to the expense. How much of the $3000 can be reimbursed as a calendar 1997 plan year expense? The orthodontist can apportion the $3000 to the office visits the child makes over the contract’s 18-month period. If the orthodontist estimates that one third of the total time that he or she will spend with the child (and one third of the expense for supplies) will occur during the first two visits (both in 1997), and that the remaining time and expenses will be spread evenly over the remaining months, then it seems reasonable that $1000 of the $3000 could be reimbursed as a 1997 expense, $1500 as a 1998 expense, and $500 as a 1999 expense. The orthodontist’s letter apportioning the expenses should be attached to the reimbursement request form submitted each month by the employee to his or her employer or Flexible Spending Account Third Party

administrator. Source: Employee Benefits Institute of America


#13 Sample Sales Letter for Direct Reimbursement

DATE BENEFITS MANAGER’S NAME COMPANY ADDRESS Dear BENEFITS MANAGER’S NAME: Like many decision-makers, you may be at a crossroads when it comes to dental coverage for your employees. On one side is the old, worn, beaten down path of the insured plan; and on the other is what many decision makers have found to be the much smoother, simpler, more cost-effective path of choice—Direct Reimbursement. The advantages of Direct Reimbursement:

• Savings up to 25% compared to a traditional insured dental program.

• Allows for freedom of choice in selecting your dentist.

• Pays for any and all dental treatment not covered under Medical.

• Is cost-effective because it is self-funded and encourages plan participants to be concerned with the price of dental care.

• Allows for efficient claim payment.

• Creates a win/win/win relationship between employer, employee, and dentist.

• The employer-fund dollars remain with the employer and can earn interest until claims are actually paid.

• The employee identifies with the employer as the benefits provider rather than an insurance company. Morale improves.

If you would like a free cost estimate and plan design consultation, please call my office or the American Association of Orthodontists directly at (800) 424-2841 ext. 215. Sincerely, DOCTOR’S NAME CONTACT INFORMATION


#14 Instructions for Setting Up a Direct Reimbursement Plan in Your Office

Direct reimbursement is an insurance plan which is simple and effective. Many small businesses can administer it themselves or they can hire a Third Party Administrator. As the name implies, employers agree to directly reimburse employees for their dental expenses. The employee can choose his/her own provider. The employee must submit a receipt for reimbursement. In Dr. McCamish’s plan, the policy is printed in the Employee Manual. Employees of the Corporation are eligible (after one year of employment) for direct reimbursement of dental expenses as follows:

• Persons covered: employee and immediate family. An immediate family member is defined as spouse or non-married children who are under the age of 21 and still living at the residence or who are full-time students and not married.

• Percent reimbursed: 50%.

• Maximum: $500 per calendar year for employee and family combined. The plan operates as follows: when an employee goes to the dentist, he/she obtains a

Request for Reimbursement of Dental Expenses Form from the Corporation. After the service is rendered, the employee asks the dentist to complete his/her section of the claim form and attach a copy of the receipt showing that the bill was paid by the employee. The employee then brings the Reimbursement Form and paid receipt to the Corporation for reimbursement for 50% of what the service cost (i.e., if the bill was $100, the employee would be reimbursed $50). Employees may continue to use the Direct Reimbursement plan until they have received a maximum reimbursement of $500 for the calendar year (January through December.) In Dr. McCamish’s office, the plan is secondary to any other dental coverage. Receipts and direct reimbursement claim forms must be submitted for reimbursement within 60 days of the date on which the payment was made.

With a five-year history, the cost per employee ranges from $93.99 to $159.61. The number of employees ranged from 16-19 and the number of persons covered under the plan ranged from 49-57. The cost per covered individual ranged from $32.47 to $50.87 over the five-year span. It takes about a hour a month to administer the plan.

SAMPLE INSTRUCTIONS FOR DIRECT REIMBURSEMENTSAMPLE INSTRUCTIONS FOR DIRECT REIMBURSEMENTSAMPLE INSTRUCTIONS FOR DIRECT REIMBURSEMENTSAMPLE INSTRUCTIONS FOR DIRECT REIMBURSEMENT

Step-by-step instructions to Employees 1. Obtain a Request for Reimbursement of Dental Expenses Form. 2. Upon completion of services, pay dental provider and ask that his/her office staff complete the Provider section of the request for Reimbursement Form. 3. Turn in completed request for Reimbursement Form and a receipt from the dental provider to the employer’s representative. Step-by-step instructions to Employer Representative 1. Provide Reimbursement Forms to employees as requested. 2. Receive completed Reimbursement Form. 3. Verify that all information on completed form conforms with the Employee Manual. 4. Write check to employee while keeping in mind the percentage reimbursed and the calendar year limit. 5. Complete individual and group yearly summary reports.


#15 REQUEST FOR REIMBURSEMENT OF DENTAL EXPENSES EMPLOYEE DIRECT REIMBURSEMENT PLAN

� To Be Completed By EmployeeTo Be Completed By EmployeeTo Be Completed By EmployeeTo Be Completed By Employee:

Employee Name:_____________________________ Patient Name:_____________________________ Relationship of Patient to Employee: Self Spouse Dependent Portion of Fee for Current Services NOT covered by another dental plan: $ __________ Method of Payment: Check Cash Credit Card I certify that: 1. The charges files are NOT eligible for reimbursement under any other coverage. 2. The provider has been paid in full or in accordance with a payment plan worked out with him/her. 3. Dependent claims are for dependents who are eligible under this plan. Signature:_____________________________ Date:_____________________________

� To Be Completed By Provider of Dental ServicesTo Be Completed By Provider of Dental ServicesTo Be Completed By Provider of Dental ServicesTo Be Completed By Provider of Dental Services: Patient’s Name:_____________________________ Date of Service:_______________ Fee:__________ Dental Procedure Performed: ____________________________________________________________ Name and Address of Provider: Please check one:

� Claim information HAS NOT and WILL NOT be furnished to an insurance carrier.

� Claim information HAS been furnished to an insurance carrier. I certify that the services and supplies specified above were provided to the named patient and that payment was made on the date shown for the fee shown. I further certify that payment was made in full or in accordance with the payment plan I have worked out with the patient. Signature:_____________________________ Date:_____________________________ NOTE TO PROVIDER: Please attach a receipt to this form. Office Use Only: Amount of Reimbursement $______ Date: __Office Use Only: Amount of Reimbursement $______ Date: __Office Use Only: Amount of Reimbursement $______ Date: __Office Use Only: Amount of Reimbursement $______ Date: ______ Check#__________ Check#__________ Check#__________ Check#______ Total Amount for Year $______Total Amount for Year $______Total Amount for Year $______Total Amount for Year $______


#16 FSA Election

Flexible spending AccountFlexible spending AccountFlexible spending AccountFlexible spending Account----Election & Payroll DeductionElection & Payroll DeductionElection & Payroll DeductionElection & Payroll Deduction FSA Plan Year: January 1FSA Plan Year: January 1FSA Plan Year: January 1FSA Plan Year: January 1----December 31, 2001December 31, 2001December 31, 2001December 31, 2001

Please complete the following information and then indicate below the benefit options that you will be electing. Payroll deductions are based on semi=monthly. Flexible Spending Accounts (Medical Reimbursement & Dependent Daycare) will be for 24 pay periods, through December 31, 2001 Name:Name:Name:Name: ____________________________________ Social Social Social Social Security:Security:Security:Security:__________________ Address:Address:Address:Address: ____________________________________ Birth Date:Birth Date:Birth Date:Birth Date: ___________________ City: _______________ State: ______________City: _______________ State: ______________City: _______________ State: ______________City: _______________ State: ______________ Zip Code:Zip Code:Zip Code:Zip Code: ______________________ Primary Beneficiary: ______________________________ Relationship: ____________________ Contingent Beneficiary: ___________________________ Relationship: ____________________

FLEXIBLE SPENDING ACCOUNTSFLEXIBLE SPENDING ACCOUNTSFLEXIBLE SPENDING ACCOUNTSFLEXIBLE SPENDING ACCOUNTS

Medical Reimbursement $_______________ Annual Election

Dependent Care Reimbursement $_______________ Annual Election

I understand the FSA plan offered to me and have elected to participate ___________________________________ Signature

I understand the FSA plan offered to me and have elected not to participate

________________________________ Signature Date: _________________________

Spouse: ____________________ SS#: ____________________ Birth Date: _________________Spouse: ____________________ SS#: ____________________ Birth Date: _________________Spouse: ____________________ SS#: ____________________ Birth Date: _________________Spouse: ____________________ SS#: ____________________ Birth Date: _________________ Children: SS# Children: SS# Children: SS# Children: SS# Birth Date: Birth Date: Birth Date: Birth Date: _________________________ _______________________ __________________________________________________ _______________________ __________________________________________________ _______________________ __________________________________________________ _______________________ _________________________ _________________________ _______________________ __________________________________________________ _______________________ __________________________________________________ _______________________ __________________________________________________ _______________________ _________________________ _________________________ ____________________________________________ ____________________________________________ ____________________________________________ _______________________ _____________________________ _____________________________ _____________________________ _________________________ _________________________ _______________________ __________________________________________________ _______________________ __________________________________________________ _______________________ __________________________________________________ _______________________ _________________________ _________________________ _______________________ __________________________________________________ _______________________ __________________________________________________ _______________________ __________________________________________________ _______________________ _________________________


#17 Computing FSA Deductions

The following worksheet will help you calculate your applicable expenses The following worksheet will help you calculate your applicable expenses The following worksheet will help you calculate your applicable expenses The following worksheet will help you calculate your applicable expenses and how much that would be in an FSA deduction each payday.and how much that would be in an FSA deduction each payday.and how much that would be in an FSA deduction each payday.and how much that would be in an FSA deduction each payday.

Medical/DMedical/DMedical/DMedical/Dental/Vision Reimbursement Accountental/Vision Reimbursement Accountental/Vision Reimbursement Accountental/Vision Reimbursement Account Medical Expenses, such as:Medical Expenses, such as:Medical Expenses, such as:Medical Expenses, such as: Deductible and coDeductible and coDeductible and coDeductible and co----payspayspayspays $ __________$ __________$ __________$ __________ Routine physical examsRoutine physical examsRoutine physical examsRoutine physical exams $ __________$ __________$ __________$ __________ PrescriptionsPrescriptionsPrescriptionsPrescriptions $ __________$ __________$ __________$ __________ Chiropractic careChiropractic careChiropractic careChiropractic care $ __________$ __________$ __________$ __________ Dental Expenses, such as:Dental Expenses, such as:Dental Expenses, such as:Dental Expenses, such as: Deductibles andDeductibles andDeductibles andDeductibles and co co co co----insurancesinsurancesinsurancesinsurances $ __________$ __________$ __________$ __________ Routine checkRoutine checkRoutine checkRoutine check----upsupsupsups $ __________$ __________$ __________$ __________ OrthodonticOrthodonticOrthodonticOrthodontic $ __________$ __________$ __________$ __________ Vision Care Expenses, such as:Vision Care Expenses, such as:Vision Care Expenses, such as:Vision Care Expenses, such as: ExamsExamsExamsExams $ __________$ __________$ __________$ __________ EyeglassesEyeglassesEyeglassesEyeglasses $ __________$ __________$ __________$ __________ Contact lenses, solution, cleanersContact lenses, solution, cleanersContact lenses, solution, cleanersContact lenses, solution, cleaners $ __________$ __________$ __________$ __________ Total Estimated MedTotal Estimated MedTotal Estimated MedTotal Estimated Medical/Dental/Vision Expensesical/Dental/Vision Expensesical/Dental/Vision Expensesical/Dental/Vision Expenses $ __________ + __________ = $________$ __________ + __________ = $________$ __________ + __________ = $________$ __________ + __________ = $________ Annual Amount # of Pay Periods* Per Pay Period

Dependent Care Reimbursement AccountDependent Care Reimbursement AccountDependent Care Reimbursement AccountDependent Care Reimbursement Account Payment to a dependent care facilityPayment to a dependent care facilityPayment to a dependent care facilityPayment to a dependent care facility $ __________$ __________$ __________$ __________ or individual per yor individual per yor individual per yor individual per yearearearear Payment to other care providersPayment to other care providersPayment to other care providersPayment to other care providers $ __________$ __________$ __________$ __________ Total Estimated Dependent Care ExpensesTotal Estimated Dependent Care ExpensesTotal Estimated Dependent Care ExpensesTotal Estimated Dependent Care Expenses $ __________ + __________ = $________$ __________ + __________ = $________$ __________ + __________ = $________$ __________ + __________ = $________ Annual Amount # of Pay Periods* Per Pay Period

Total Pay Period ReductionTotal Pay Period ReductionTotal Pay Period ReductionTotal Pay Period Reduction $ _______$ _______$ _______$ _______ (Add total estimated medical/dental/vision and total estimated dependent care.)

Total Per Pay Period *Weekly, 52 paydays Bi-weekly, 26 paydays Semi-monthly, 24 paydays Monthly, 12 paydays


#18 Claim for FSA Reimbursement

Employer ______________________________

Name ____________________ SS # ____________________ Employee # ___________________

Dependent Care Expense ClaimsDependent Care Expense ClaimsDependent Care Expense ClaimsDependent Care Expense Claims Period CoveredPeriod CoveredPeriod CoveredPeriod Covered Name of Name of Name of Name of

Dependent(s)Dependent(s)Dependent(s)Dependent(s) FromFromFromFrom ToToToTo

Name, Address and TaxpayerName, Address and TaxpayerName, Address and TaxpayerName, Address and Taxpayer Identification # of Provider of ServiceIdentification # of Provider of ServiceIdentification # of Provider of ServiceIdentification # of Provider of Service

Amount Amount Amount Amount IncurredIncurredIncurredIncurred

*TOTAL DEPENDENT CARE EXPENSE *TOTAL DEPENDENT CARE EXPENSE *TOTAL DEPENDENT CARE EXPENSE *TOTAL DEPENDENT CARE EXPENSE CLAIMCLAIMCLAIMCLAIM

*NOTE: The total amount claimed under the Plan for any coverage period must not exceed the lesser of your earned income for the plan year or the earned income of your spouse. (If your spouse is either a full-time student or is incapable of taking care of himself or herself, then he or she is deemed to have monthly earnings of $200 (if there is one (1) child or dependent, and $400 if there are two (2) or more). No payment may be made under the plan if the service provider is your dependent for federal income tax purposes, or if your child or stepchild and is under age 19.

Unreimbursed Medical Expense ClaimsUnreimbursed Medical Expense ClaimsUnreimbursed Medical Expense ClaimsUnreimbursed Medical Expense Claims Date expense Date expense Date expense Date expense

IncurredIncurredIncurredIncurred Name of Service Name of Service Name of Service Name of Service

ProviderProviderProviderProvider Expense Expense Expense Expense

DescriptionDescriptionDescriptionDescription Person for Whom Person for Whom Person for Whom Person for Whom Expense IncurredExpense IncurredExpense IncurredExpense Incurred

Net AmountNet AmountNet AmountNet Amount

TOTAL MEDICAL CARE EXPENSE CLAIMTOTAL MEDICAL CARE EXPENSE CLAIMTOTAL MEDICAL CARE EXPENSE CLAIMTOTAL MEDICAL CARE EXPENSE CLAIM

READ CAREFULLY:READ CAREFULLY:READ CAREFULLY:READ CAREFULLY: The undersigned participant in the Plan certifies that all expenses for which reimbursement or payment is claimed by submission of this form were incurred during a period while the undersigned was covered under the Company’s Cafeteria Plan with respect to such expenses and that the medical expenses have not been reimbursed or are not reimbursable under any other health plan coverage. The undersigned fully understands that he or she alone is fully responsible for the sufficiency, accuracy, and veracity of all information relating to this claim which is provided by the undersigned, and that unless an expense for which payment or reimbursement is claimed is a proper expense under the Plan, the undersigned may be liable for payment of all related taxes including federal, state, or city income tax on amounts paid from the Plan which relate to such expense.

__________________________________ ______________________________ Employee’s Signature Date


COMPLAINT FORMS

#19 SAMPLE FORM TO FILE COMPLAINT WITH STATE INSURANCE COMMISSIONER

Name: _________________________________________________

Address: _________________________________________ ____________________________________________

Home Telephone:__________________________ Work Telephone: ___________________________ Your Age Group: ( ) Under 25 ( ) 25 – 49 ( ) 50 – 64 ( ) 65 and up Name of Insurance company:__________________________________________________________ Type of Insurance Involved: Auto_______ Life_______ Health_______ Property_______ Other___________ Name of Insured shown on policy: ______________________________________________________ Policy Number:________________________________ Claim Number:_________________________ Agent’s Name:____________________________________ Agent’s Telephone:__________________ Adjuster’s Name:__________________________________Adjuster’s Telephone:________________ Date of Loss:____________/________/________ Have you already contacted your company or agent concerning your complaint? Yes ( ) No ( ) If yes, when and whom? ______________________________________________________________________ Are you presently represented by an attorney? Yes ( ) No ( ) Have you filed in any court? Yes ( ) No ( ) Explain your complaint fully in the order of events. Use the back of this form or additional sheets if necessary.... ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________


Attach copies of any letter you have written or received, copies of receipts, bills, contracts, or any other documentation concerning your complaint. If your complaint is about an insurance advertisement, attach a copy of the advertisement. . . . PLEASE DO NOT SEND ORIGINALS.PLEASE DO NOT SEND ORIGINALS.PLEASE DO NOT SEND ORIGINALS.PLEASE DO NOT SEND ORIGINALS. Have you previously filed a complaint with the Department concerning this problem? Yes ( ) No ( )

Signature:______________________________________Date:_____________________________ Please return completed form and any documentation to:


#20 SAMPLE FORM TO FILE COMPLAINT TO AAO

AAO Member Complaint FormAAO Member Complaint FormAAO Member Complaint FormAAO Member Complaint Form (Third-Party Payers)

1. Member Name:

2. Complete Mailing Address:

3. Date(s):

4. Third-Party Payer Name:

5. Are you a contracted provider with this plan? Yes_______ No_______

6. Nature of problem or complaint; Mark all that are applicable:

_________Payment denial/Pre-Treatment authorization denial

_________No direct pay to non-participating provider

_________Benefit denial

_________Delay in payment(s)

_________Change in code to less complex or less expensive procedure

_________Combined procedure(s) resulting in lower benefits

_________Problems with/lack of coordination of benefits

_________Requests for additional treatment information/records

_________Loss of patient claims or additional treatment information

_________Other (Please explain)

Provide a thorough explanation of the problem:

Who may we contact for further information?_____________________________

***Please provide a copy of the appropriate Patient Information Release Authorization Form***

NOTE: This file may be saved to your computer, and completed. Send the forms as an attachment via email to: [email protected] OR Print the document and fax to (314) 993-6843, Attn: Ann Sebaugh


#21#21#21#21 REPORT ON INSURREPORT ON INSURREPORT ON INSURREPORT ON INSURANCE REFUSALS/REQUESTS FOR ADDITIONAL INFORMATIONANCE REFUSALS/REQUESTS FOR ADDITIONAL INFORMATIONANCE REFUSALS/REQUESTS FOR ADDITIONAL INFORMATIONANCE REFUSALS/REQUESTS FOR ADDITIONAL INFORMATION

Doctor Name________________________

PATIENTPATIENTPATIENTPATIENT DATE DATE DATE DATE CLAIM CLAIM CLAIM CLAIM SENTSENTSENTSENT

(E) or (M)(E) or (M)(E) or (M)(E) or (M)1111

INSURANCE INSURANCE INSURANCE INSURANCE COMPANYCOMPANYCOMPANYCOMPANY

DATE OF DATE OF DATE OF DATE OF CONTACT CONTACT CONTACT CONTACT BY BY BY BY COMPANYCOMPANYCOMPANYCOMPANY

ADDITIONAL ADDITIONAL ADDITIONAL ADDITIONAL INFORMATION INFORMATION INFORMATION INFORMATION REQUESTEDREQUESTEDREQUESTEDREQUESTED

REASON REASON REASON REASON FOR FOR FOR FOR DENIALDENIALDENIALDENIAL

TELEPHONE TELEPHONE TELEPHONE TELEPHONE CALLS BY MY CALLS BY MY CALLS BY MY CALLS BY MY STAFFSTAFFSTAFFSTAFF2222

COMMENTCOMMENTCOMMENTCOMMENTSSSS

1 1 1 1 Please indicate if the claim was sent (E)lectronically or (M)ailed 2222 Please indicate the number of times and length of call to the insurance company to discuss claim

The National Insurance Guide

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