EVER HEARD OF WARREN BUFFET, the man who made most of his fortune by heavily investing in the insurance industry? Of course, you have. His net worth is said to be somewhere in the area of $100 billion. Understanding the business model of insurance companies, Mr. Buffet took a gamble and came out one of the richest men in history. You see, insurance companies are in the business of making money, not spending it.
One of the most common ways insurance companies ensure that their profits soar is to collect monthly premiums from their members (our patients), then deny as many claims as possible by referring to the literature in a patient’s contract, specifically the exclusions, limitations, or frequency provisions. Exercising their right to deny payment of claims based on this literature ultimately results in decreased payouts and increased profits for the insurance company.
Now that you have a better understanding of the insurance company business model, you need to think like an insurance company. Be sure to dot your i’s and cross your t’s before you send out any dental claims for processing.
Here are three most of the most common ways insurance companies deny dental claims, and some ways in which you can avoid them.
Lack of information from the provider
At least 50% of dental claims for basic and major services will be placed on pending status and sent back to the dental office, which requires you to send additional information in order for the claim to be considered for payment. Most of the time the claim is sent back due to a lack of information.
Be sure to send a recent full-mouth series or periodontal charting from the last six months for claims requiring this information, such as periodontal, endodontic, orthodontic, and other basic and major services. In some cases, the insurance company will delay payment by requesting a detailed narrative with a written explanation of necessity. Always be swift and timely with any requests from the dental insurance company to facilitate claims processing.
Dental claims should be submitted upon completion of the services provided. Failing to submit the claim on time is an easy excuse for the insurance company to deny the claim. Most PPO plans require that the claim to be submitted within one year from the date of service. There are also some local union plans that have even shorter time filing periods, such as 90 days. If the claim remains unpaid past these deadlines, you will be at the mercy of the untimely filing rule and can expect to have the claim denied, should you resubmit. You may be able to request an appeal, but most often this request will also be rejected.
Limitations, exclusions, frequencies
All dental plans are not created equal. Most dental plans are based on what a patient’s employer has agreed on with the dental plan provider. Limitations such as annual or lifetime maximums ensure control over how much is paid out on a dental policy. Frequencies help keep insurance company costs down by ensuring patients can be covered only for certain procedures a few times a year or every few years.
Excluding or down coding certain procedures occurs all too often and helps to minimize insurance payout. Don’t expect reimbursement for a dental implant when a patient could have had a three-unit bridge instead. Most of the time companies will down code a more expensive procedure to a less costly procedure and provide an alternate benefit, which results in lower reimbursement.
The list for reasons of non-covered procedures, due to limitations, exclusions, and frequencies, can go on and on because these usually vary from plan to plan. This is why it is vital to find out what is covered and not covered prior to performing any procedures. You can do this by obtaining a breakdown of benefits, and if necessary, submitting a predetermination for more costly procedures.
So you see, insurance companies are in the business of making sure their quarterly earnings soar and they make record profits. They tend to make decisions based on what’s in their own pockets, not based on what’s best for our patients’ health and well-being. Be prepared, and think like an insurance company!
Kyle Summerford Editorial Director
Kyle L. Summerford is a nationally recognized practice management guru, author, and lecturer. As founder and president of Summerford Solutions, Inc., he provides powerful information for dental staff members on his website, DDSGuru.com. Kyle also serves as editorial director of Pennwell’s Dental Office Manager Digest e-newsletter. He lectures extensively to dentists and their staff on topics such as insurance coding and billing, and useful practice management tips.
This article originally appeared on Dentistry IQ.