Dental PPO Fees in the Spotlight

Few dental practices in the United States made it through 2009 without being affected by the recession at some level. Some that have avoided joining PPO networks in the past are reconsidering their position. The decision to join a PPO often generates a litany of questions from dental staff wondering what fees to submit on claims, how to calculate provider write-offs, and how to determine patient responsibility when coordinating benefits from multiple plans. Should we submit our full fees or contracted PPO fees? What fees can we charge for noncovered services or when patients reach their maximum? What fee do we charge when the patient has coverage under both a traditional indemnity plan and a PPO plan? Can we negotiate our contracted fees?

Should we submit our full fees or contracted PPO fees?

On page 128 of CDT 2009/2010, the American Dental Association (ADA) instructs dentists to report their full fee in field 31 of the current dental claim form. Some dentists erroneously assume that the fees they have agreed to accept when they join a PPO plan become their full fees for patients covered by that PPO plan. Although contracted fees must be honored when calculating patient responsibility, they are not considereda dentist’s full fee. To clarify this issue, the ADA House of Delegates adopted resolution 44H-2009, which states the following:

A full fee is the fee for a service that is set by the dentist, which reflects the costs of providing the procedure and the value of the dentist’s professional judgment.A contractual relationship does not change the dentist’s full fee.It is always appropriate to report the full fee for each service reported to a third-party payer. (ADA News; Nov. 2, 2009)

Dental practices that submit contracted fees on dental claims are shooting themselves in the foot. How so? Submitting contracted fees may restrict their ability to receive future fee increases. Dental carriers analyze the fees submitted on dental claims to determine if and when they will raise fees. Some track each dentist’s individual fee data to determine if that dentist is eligible for a fee increase (a.k.a. fee profiling). Others track the fee data for a specific geographic region and use that information to determine allowable fee increases for dentists in that area. For example, Delta Dental of California advises providers to report their full fees on claims because Delta Dental of California calculates future allowances using the fees submitted on Delta Dental claims by that region’s participating dentists. If participating dentists only submit their contracted fees, Delta Dental of California’s fee data will no support the need for a fee increase. In fact, given the fact that some Delta Dental plans set fees between the 70-80th percentile, dentists could actually see a fee reduction if a substantial number of participating providers submit contracted fees on claims.

Submitting full fees on claims also ensures that providers will receive the latest PPO fee increase approved by the carrier. When practices report contracted fees on dental claims, they may not be aware of fee increases already approved by the carrier because dental plans typically pay the lower of the fee reported on the claim form or the contracted fee.

By now it should be clear that contracted dentists should always bill their full fee, even if they participate in one or more dental networks. Doing so also allows dentists to measure and analyze the effects of discounts offered by their practice, whether due to write-offs associated with participating provider contracts or patient incentives.

What fees can we charge for noncovered services or when the patient’s maximum is reached?

Although several dental networks already restrict fees for noncovered services (e.g., Aetna, United Concordia, and some Delta Dental plans), the issue of restricting fees for noncovered services has erupted into a volatile topic nationwide. The ADA and state dental associations rallied last year when the Delta Dental Plans Association (DDPA) announced its goal for all Delta Dental plans nationwide to cap fees for noncovered services by January 1, 2011.

Dentists question why insurance companies should have a say in what a provider charges if they are not paying the claim, especially when PPO fees are imposed and not negotiated. Dentists also oppose carriers capping fees on noncovered services because it may shift costs to the uninsured, the group that can afford dentalservices the least. In addition, some contracted fees barely cover lab and material costs, which some fear may drive dentists who use high quality materials to choose cheaper alternatives to cut costs (; Feb. 17, 2010).

The recent battle between insurance carriers and the Virginia Dental Association (VDA) caught the attention of dentists across the country as the VDA worked tirelessly to get legislation passed prohibiting insurance carriers from capping fees for noncovered services. Similar legislation had already passed in Rhode Island in 2009. As a result, a growing number of states are also considering such legislation, including: Alaska, Arizona, Colorado, Hawaii, Illinois, Indiana, Iowa, Kansas, Maryland, Mississippi, Missouri, Nebraska, Oklahoma, Oregon, Pennsylvania, South Dakota, and Washington.

State laws rarely apply to self-funded plans

It is important to remember that state insurance laws rarely apply to self-funded dental plans. So, even though Rhode Island and Virginia now have laws preventing dental plans from capping fees for noncovered services, their laws only apply to fully insured plans licensed in Rhode Island and Virginia. Self-funded dental plans are regulated by the U.S. Department of Labor under ERISA (Employee Retirement and Income Security Act of 1974). Since a large percentage of dental plans in existence today are selffunded, the ADA is pursuing an “aggressive lobbying strategy” to also prevent self-funded ERISA plans from limiting fees for noncovered services (ADA News; Feb. 18, 2010).

How many patients exceed their maximums?

According to Michael Weitzner, DMD, Vice President of National Clinical Operations for United Healthcare (UHC), only five percent of patients covered by UHC reach their maximum in a benefit year, and 75 percent of patients covered by UHC use less than $500 per benefit year. These estimates are consistent with those cited by other insurance carriers.

If only five percent of patients reach their plan year maximum, dental plans that restrict fees for noncovered services have a far greater impact on dentists than plans that only restrict fees after patient maximums are reached.

What fee do we charge when the patient is covered by both a traditional indemnity plan and a PPO plan?

Dentists should always submit their full (usual) fee. According to the American Dental Association, “Dental practices should submit their usual fee, defined by ADA policy as the fee which an individual dentist most frequently charges for a specific dental procedure. The benefit plan will adjudicate the claim based on its allowable fee schedules.” (ADA News; May 5, 2008)

What fee is used to calculate patient responsibility when coordinating benefits between multiple dental plans?

When it comes to coordination of benefits, there is no single set of rules that apply to every situation. Some dental plans are obligated by state law or contract language to coordinate up to the primary dental plan’s allowable fee. Other plans are required by state law or contract law to coordinate up to the highest allowable fee when two benefit plans are involved. In most situations, the secondary plan is not required to pay more than it would have paid if it were primary. Even so, it is not unusual for a participating dentist to receive more than his/her contracted fee when the patient’s primary plan is a traditional fee-for-service plan and the secondary is a PPO. In this situation, it is acceptable for the dentist to keep the amount paid by the primary and reduce his/her secondary write-off accordingly. Do not follow the write-off instructions from the secondary payer without first verifying the math to determine if the full write-off is necessary. Always investigate if a patient ends up with a credit after multiple plans have paid on a claim.

If the primary dental plan pays more than the secondary plan’s contracted fees, industry experts agree that the patient should not be penalized for having more than one plan. In other words, when calculating patient responsibility, the patient receives the benefit of the lowest contracted fee, whether it is from the primary or secondary plan. This is consistent with Medicare’s Secondary Payer (MSP) requirements: “Even when secondary, Medicare’s allowable fee is the deciding factor when determining the patient’s liability.”

Can we negotiate contracted fees?

Dentists are often surprised to learn that some dental carriers are willing to negotiate contracted fees with network providers. This is not to say that a dentist will always be successful. However, based on reports from our subscribers, many successfully negotiate PPO fees. The number of participating dentists practicing nearby may affect one’s ability to negotiate. The fewer participating providers in your area, the more leverage you will have. When negotiating fees, providers should target the specific procedures that they want increased, ideally ten or less. To have the biggest impact on the bottom line, these should be frequently performed procedures. Doing your homework before calling the carrier’s regional network manager will improve your odds of success. Be prepared to answer the following questions:

Which fees do you want increased?How much do you want them increased?What is your practice overhead expense ratio?What percentage of your fee for each procedure are you currently writing off?When was each fee last increased?What has been the cumulative cost of living increase based on the consumer price index (CPI) for your area since your fees were last increased?


Dentists who participate in reduced fee networks should continue to bill full fees on all claims and account for contracted write-offs when posting payments. Doing so will improve the accuracy of fee data used to determine future fee increases, ensure that the latest allowable fees are paid on all claims, allow participating providers to compare the profitability of each PPO contract, and enable providers to analyze the effects of other discounts and patient incentives offered in their practice.