Dental benefits 101: Proper billing, waiving co-payments

December 20, 2016

Beginning in the New Year, and with the forthcoming issue of the CDA Update, the dental benefits column will host a semiregular series discussing basic dental benefit issues. The topics covered address questions that CDA Practice Support receives from dental offices and from local dental components.

Proper billing

Q: How should a dental practice bill for treatment provided by an associate?

Not that long ago, almost all dental plans paid according to the contract status of the billing provider or owner, listed on submitted dental claims. When solo practices made up the vast majority of dental practices in the profession, this payment policy made sense. While the majority of dental practices are still solo practices, the larger number of group practices, corporate dental practices and multipractitioner dental practices has prompted dental plans to pay based not on who the owner is and what their contract status is with the plan, but who rendered care.

For the most part, payment based on the renderer of care would make little to no difference in terms of the amount paid to a practice. For example, if both the practice owner and associates are contracted with ABC Dental, it is likely they have the same contracted PPO fee schedule — meaning the associate would be reimbursed from the same fee schedule as the owner.

If the associate is not contracted with ABC Dental Plan but the owner is, treatment provided by the associate would likely be paid as "out of network." The reimbursement check would be made out to the "billing provider" (the owner) but paid as out-of-network treatment, even though the owner or billing provider is in network.

If an owner bills ABC Dental Plan but the treatment was performed by a noncontracted associate who was not identified on the submitted claim, this billing would be in error and potentially fraudulent. Most current claim forms allow space to identify both the billing provider and the treating provider/associate. The correct way to bill all claims submitted to any dental plan is to list the owner/billing provider and the treating or rendering provider. The billing provider will receive the check from the plan, but the claim will be paid according to the contract status of the dentist who rendered care.

Waiving of co-payments

Q: May a dental practice forgive, or not collect, a co-payment from a patient?

If a dental plan identifies a patient portion for the cost of a covered dental procedure, most dental plans require the collection of those patient co-payments. Not collecting the co-payment is a violation of the contract the dentist has with the patient's dental plan.

This question often comes up when a neighboring dental office "forgives" or doesn't collect patient co-payments, and the inquiring office wants to know if this is legal, or whether the office itself can forgive co-payments. Not collecting patient co-payments is often used as a promotion to attract new patients to a practice. Again, if a dental office is forgiving co-payments as a matter of policy or promotion, that dentist is violating the contracts she or he has with dental plans.

Unlike health insurance, which after a patient's deductible may pay for almost all care provided to an enrollee, dental plans are designed with specific patient co-payments built in. Dental plans require co-payments because plans calculate premiums based on the overall cost of procedures. If these fees include a co-payment, and the dentist fails to collect the co-payment, it changes the economics of coverage and the cost of care provided through the dental benefit plan.

If a plan determines that a dental practice does not regularly collect co-payments from its enrollees, at the very least the plan will ask the dentist to start collecting those co-payments. Beyond this, such a finding could result in an audit of a number of the plan's patients' treatments in the practice.

Many dental offices wish to provide a discount to patients, either across the board or to select patients. Forgiving co-payments is usually considered the easiest way to grant patients a discount. However, forgiving co-payments, besides being a violation of the dentist's contracts with dental plans, may also be considered fraud. An example of this is when a dentist bills a procedure to the patient's dental plan for $400, with $200 paid by the plan and the other $200 being the co-payment responsibility of the patient. The plan assumes that the dental office is collecting the patient's portion. If the office does not collect and it is the practice's policy not to collect the co-payment, the plan could say that the actual fee for the treatment is $200, not the $400 indicated on the claim because the dentist never planned to actually collect the patient's portion. The practice should have billed the plan $200, reflecting the discounted or forgiven patient portion.

This example shows how forgiving of co-payments is considered fraud. The proper way to apply discounts is to discount both the patient's co-pay and the plan's portion. This can be accomplished by applying the total discount to the submitted fee on the claim. If the dentist wants to provide a discount by reducing the fee from $400 to $200, the dentist should claim to the plan a submitted fee of $200. The dental plan will pay its portion from the reduced submitted fee and the patient experiences a discount, having to pay a lower co-pay of $100 instead of the full co-payment of $200 on a $400 allowance. While the dental office isn't passing on the full discount they'd like to the patient, the patient's co-payment amount is discounted, but so is the amount that is the responsibility of the plan.

By passing on a discount to the plan and the patient, the situation of fraud is avoided.

The potential for forgiving of patient co-payments to constitute fraudulent billing is recognized in the CDA Code of Ethics. Section 7.A.2 of the Code of Ethics states, "A dentist who accepts a third-party payment under a co-payment plan as payment in full, without disclosing to the third- party payer that the patient's payment portion will not be collected, may be engaged in overbilling. The essence of this ethical impropriety is deception and misrepresentation; an overbilling dentist makes it appear to the third-party payer that the charge to the patient for the services rendered is higher than it actually is."

Another downside of not collecting patient co-payments is that patients come to expect it. A dentist who does not collect co-payments is torpedoing the dentist who purchases the practice in the future. Patients come to the new dentist expecting there will be no co-payments. The new dentist explains to patients that the previous owner did not collect required co-payments, but that this was a violation of the dentist's contract with the patients' plans. The patients probably won't care about this legalistic explanation, and even though the new owner is doing the correct thing, he or she is getting off on the wrong foot with inherited patients.

For more information on the right and wrong way to offer a patient a discount, see the CDA Practice Support resource "The Right Way to Offer a Patient Discount," available at


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