Answers to two common dental benefit questions

By Greg Alterton, CDA Dental Benefit Plan Specialist

CDA Practice Support receives many questions from members about dental benefits. Two of the most common questions are about patient copayments and patient discounts for prepayments. Below are answers to both.

Can I waive patient co-pays?

If you are contracted with a dental plan's network of providers, the contract will dictate your co-payment collection obligation. Dental plans maintain that the patient's co-payment is important to the overall economics of providing coverage, as it is a factor when determining the premium payment. A plan may conclude that a dentist who fails to collect co-payments are misrepresenting their fees to the plans when submitting claims, as the fee charged to the dental plan is more than the fee actually charged because of the noncollection of the co-payment. Also, dental plans believe that patients' utilization of services will increase if they have no financial obligation for treatment.

California law does not prohibit waiving co-payments. The California attorney general issued an opinion years ago stating that routine waiver of co-payments is permissible. However, that opinion has been contested. In one case, a trial court ruled that a dentist who waived a patient's co-payment without reflecting it on the claim violated statutory provisions prohibiting insurance fraud and unfair competition. Federal law prohibits waiver of co-payments for Medicare or Medicaid patients.

In summary, if you are a contracted provider with a dental plan, and the provider contract is silent on the question of waiving a co-payment, such waiver would be permissible, but the amount claimed should reflect the noncollection of the co-pay.

Can I offer a discount to my patients who pay in full prior to treatment?

Yes, discounts for payment in full prior to treatment are legitimate. A discount is commonly offered to patients who do not have dental benefits and who submit payment in full before treatment.

Although it is not as common, practices may choose to offer a courtesy or discount to patients with dental plans. While reasonable efforts should be made to collect co-payments, discounts are permitted for patients who receive care out-of-network. However, the discount must be applied to both the patient and dental benefit plan portions.

Usually, a question about discounts goes like this: "We'd like to offer a discount on services as a promotion for new patients of the practice. Can we discount the patient's portion by writing off the patient's deductible and/or co-payment?"

The answer depends on how a dental practice applies the discount. Dentists need to remember that for plans they're contracted with, that plan may require them to make an effort to collect deductibles and co-payments. Because of the contracts with dental plans, dentists have surrendered their absolute right to charge what they will for dental procedures. Plan contracts typically stipulate that whatever the plan pays for certain procedures may be "payment in full" for those procedures, and a dentist cannot bill the patient for the balance. Where plans allow balance billing of patients for more high-cost procedures, dentists are still limited to a balance based upon the plan's recognized allowance, not the dentist's usual, customary and reasonable fee.

Plans calculate their per-enrollee premiums based on the cost-share assigned to the patient. If all or a portion of the patient's cost-share is not collected, even though the dentist is the one absorbing the discount, a plan's cost-of-coverage calculations are thrown off. One dental plan told CDA that an effect of forgiving or failing to collect a patient's co-payment responsibility is that dental care may become overutilized. The lower the cost of a service, the greater the demand for that service. A patient isn't going to have a tooth filled where no caries are present, but throwing off the cost-share balance between what a patient pays and what a plan pays for treatment makes the plan's calculation for premium level too low to cover a measurable increase in the demand for care.

But what about a discount for a patient covered by a plan with which the dentist isn't contracted? There's more latitude here, but it depends on how the discount is extended.

Let's assume that a patient comes in for a procedure for which the dentist has a fee of $200. The patient's plan may cover 50 percent of the fee, with the ability of the dentist to bill the patient for the other half. So, the plan would pay $100 of that $200 claim and the patient would be responsible for paying the remaining $100. But what if the dentist cuts the patient's co-payment responsibility in half? The claim was for a procedure with a fee of $200. The plan paid $100 based on the claimed amount and the dentist only billed the patient $50 of the remaining balance.

Is there anything wrong with this?

Most likely, yes. The problem is that the cost of the procedure really wasn't $200, but $150. The plan, should it determine later that the dentist filed a claim for $200 on a procedure that in actuality was $150, might determine that the dentist fraudulently overcharged the plan. 

If a dental office receives a new patient and wants to extend a discount for the initial exam, X-ray, etc., that discounted amount should be reflected in the claim to the plan. Instead of filing a claim for $200, send the full sum of the procedure on the claim to the patient's plan: $150, of which the plan might pay $75, and the patient might then pay the balance of $75. The patient gets a discount of $25, for which he or she will mostly likely be grateful. Obviously the plan has gotten the benefit of the discount as well. And the dentist has avoided billing a plan an amount more than they intended to actually charge for that particular appointment.

In general, discounts to patients are allowed, but check your contract (if you're in contract with the patient's dental plan) in terms of whether a patient co-payment is required. And if you are not in the patient's plan's network, reflect your intended discount in the actual claim to the plan.

For more information, visit cda.org/practicesupport.

Related Items

A dentist's rights in a dental benefit plan dispute
By Greg Alterton, CDA Dental Benefit Plan Specialist
CDA receives numerous calls daily about various disputes dentists have with patients’ dental benefit carriers. While CDA will consider how these disputes might be informally resolved, ultimately, the dentist has the right to appeal the dispute back to the plan, and eventually with the plan’s regulator.

United Concordia changed how periapical X-rays would be paid this summer and CDA Practice Support, after receiving calls from members about the changes, reached out to the company on behalf of dentists to get additional information. Here are the aspects of the new policy that CDA has learned from its correspondence with the insurance company.