NMDA Journal Winter 2019-20

nmdental.org 7 Preferred Provider Organizations (PPOs) Within the PPO structure, the provider is di- rectly contracted with the insurance company. In exchange for being listed as a “preferred provider” by the insurance company, the den- tist agrees to a contracted fee schedule. This fee schedule may periodically be increased but on occasion, we have seen situations where fees have been reduced. Federal anti-trust laws allow PPOs to offer a wide range of contractual fee schedules to providers within the same geographical area. As a result, the individual provider has a dif- ficult time determining where they stand in relation to other providers in their community. Comparing contractual fee schedules between dentists is not allowed based on the contrac- tual restrictions between the provider and PPO. PPOs are in a better position to control over- head because they can design, and shape con- tractual fee schedules offered to their panel providers. This portion of the insurance market is growing rapidly and consolidating. Insurance Company In short, an insurance company collects pre- miums and pays claims. Their client is the em- ployer group that pay the premiums. It’s the employer group that determines the benefits available to the employee—not the insurance company. The insurance company simply pres- ents plan options that align with what the pro- viding dentists have contractually agreed to. In cases where an individual subscribes directly to a dental insurance company, that individual pays premiums and decides what dental plan options best suit them. Dental plans all contain annual minimums, deductibles, co-payments and annual maximum benefits that typically range from $1000–1500. Many patients fall into the trap of assuming dental insurance has similar qualities of health insurance. Comparing the differences in an- nual maximums between dental and health insurance, quickly identifies that the two ap- proaches are very different. Health insurance deals with catastrophic claims and dental insurance does not. No wonder patients often leave the dental office frustrated and disap- pointed with unanticipated payments out of pocket at time of service! So far, fairly straight forward. Right? Or, are these reminders just agitating you? The relationship between the insurance company, provider and patient is easily understandable and straight forward. With indemnity, the provider is getting paid their UCR fee between the patient and insurance entity. With PPOs, the provider will eventually be paid their contracted fee that comprises re- imbursements from the insurance carrier and deductibles or copayments paid by the patient outlined in the plan. With PPOs, you are re- stricted in what you may or may not be paid based on the contracted coverage between the customer and PPO carrier. Now, let’s switch gears to understanding another method a dental provider can attract patient flow. This method is more complex and can be confusing as we share information about what is commonly known as“Umbrella Groups.”Buckle up! Umbrella Groups The convoluted world of umbrella groups frequently leaves insurance coordinators and office managers perplexed. An umbrella group is not an insurance company. Groups like Connection, Zelis and DenteMax contract with providers to participate in their own provider panel. Clients of umbrella groups are not patients or employer groups but various insurance companies that lease the umbrella provider panel and pay a fee to the umbrella group. Providers are listed as a preferred pro- vider at a negotiated fee schedule. As with PPOs, there may be multiple fee schedules offered by an umbrella group in any given neighborhood or zip code. It used to be that if you contracted with more than one umbrella group, and there was a common client (insurance company), the umbrella group with the earliest effective date would be primary. You would expect to be reimbursed based on the contracted fee schedule for that particular umbrella group. For example, if you were contracted with both Connection Dental and DenteMax, and MetLife is a client of both umbrella groups, patient care delivered to a MetLife insured individual would be reimbursed according to the terms and fee schedule of the umbrella group with the earlier effective date. Shared Provider Panels In recent years, dentists that are contracted with multiple umbrella groups, are often per- plexed as to howmuch they are getting paid and fromwho. To make things even more con- fusing, the rules and policies within umbrella groups change often. Instead of being able to count on the contract with the earliest effec- tive date to determine the fee schedule to be used, it is now common for carriers to use the fee schedules of the umbrella group that is most favorable to the insurance provider. The following scenarios are taken from an ac- tive practice that demonstrate how complex these scenarios can be. These examples are im- portant to understand and will hopefully lead to productive conversations between dentists and key teammembers in the office. Doing so will clear confusion and create a map of the relationships of third-party administrators, in- surance carriers and umbrella groups. Example Let’s consider a patient that is insured by the insurance carrier Principal, and a molar is restored. Procedures in restoring the molar include a Molar Root Canal (D3330), Indirect Post (D2954) and a Porcelain/Ceramic Crown (D2740). UCR fees are $956, $307 and $1,074 respectively, for a total production of $2,337. Although dreaming can be enjoyable, a dentist must live in a reality where understanding how they get paid is nearly as important as doing the dentistry. continues on page 8 