September 2016
Volume 7, Issue 9

Rough Waters

The complicated reality of insurance trends in dentistry

Editor’s Note: Dental insurance reimbursement rates have been a disruptive force negatively impacting the dental profession, including dental laboratories. Understanding the complexity of this issue and the forces currently trying to disrupt the disruptor is the first step toward affecting change. First published in the March 2016 issue of Inside Dentistry, this article takes an in-depth look at the dental insurance industry and the economic repercussions the institution is having on your clients.

By Jeannette DeWyze

Americans who have dental insurance are much more likely to see a dentist1 and take their children in for dental care; they also receive more restorative care and enjoy better overall health.2 The access to care that dental insurance can provide has a clear benefit for patients, but many practitioners are frustrated by a perception that third-party payers are squeezing their practices with reduced reimbursement rates and claim denials.

The economic pressures affecting the profession are certainly complex, but the question remains—how culpable are the policies of dental insurers for flat or declining profits?

Coverage and Participation

Approximately 67.7 million Americans under 65 lack dental insurance—more than twice the number who are medically uninsured (roughly 32 million). Nevertheless, some 205 million Americans are currently covered by dental insurance plans—approximately 64% of the US population.3 About three quarters of those plans are private, with the vast majority provided by employers or groups such as the American Association of Retired Persons. The rest receive their coverage from public programs such as Medicaid.

Approximately 100 dental insurance providers currently operate within the United States, 82 of which are members of the National Association of Dental Plans (NADP), according to NADP Executive Director Evelyn Ireland. Since 2000, the NADP has conducted an annual survey in an effort to better understand the scope of dentist participation in provider networks. Ireland says analysis of the most recent (2014) report data showed that more than 95% of professionally active dentists were participating in at least one network.

The NADP data also showed that almost 80% of the dental plans in the market already are preferred provider organizations (PPOs), with more than 193,000 American dentists (an estimated 96% of those who are actively practicing) participating in at least one, and the average dentist accepting 5.7 PPO networks.

Practitioner Perceptions

Despite high rates of participation, some industry observers and practitioners believe that reimbursement rates have declined—with deleterious consequences for practice profitability. “Insurance rates have definitely dropped throughout the country,” states practice management expert Roger P. Levin, DDS, chairman and CEO of Levin Group, Inc. Levin says that based on daily interaction with practices, it seems many dental insurers have reduced their reimbursements to PPO levels. “We believe that eventually all insurance reimbursement will be at a PPO level,” he says. “They won’t all be in PPOs, but they will be at a PPO level.”

Robert Margeas, DDS, expresses guarded contentment when asked about his experiences with dental insurance. His Iowa Dental Group, based in Des Moines, Iowa, focuses on comprehensive restorative and implant dentistry and currently accepts benefits from two insurers (Wellmark Blue and Delta Dental). “I’m somewhat happy with the reimbursements,” Margeas says. “It’s not like the medical field where they’re writing off 40% and 50%.”

Still, he points out some limitations. “I can’t always use the highest quality laboratory for maximum esthetics because my reimbursement is not high enough,” he explains. Sometimes there are problems with claim denials, such as when insurers won’t pay for a crown for a cracked tooth because a crack does not show on the x-ray. “Often getting reimbursed comes down to writing a good narrative for the claim and asking a consultant to review it,” he says. “That’s an extra step for the dentist, but it’s one way to get paid.”

Claims related to cone-beam computed tomography (CBCT) can also be frustrating, he attests. “It’s not common to be reimbursed, even though it’s something that is very useful,” he says. “But a lot of times the patient has to be willing to pay out of pocket to have that extra care.”

Dental consultant and speaker Christine Taxin says CBCT scans are in fact reimbursable, but it means getting the office on board with medical billing. An important first step toward billing medical for CBCT is getting the unit registered with the state, she notes. Each state has different regulations, but the legwork is worth it not only for billing but also for the prestige accreditation offers the practice. Once accreditation is achieved, dentists can bill for different aspects of the CBCT workflow, including taking the scan, reading it, or sending it out to be read by a radiologist. There is even a code for reading a scan performed elsewhere, Taxin says.

Another reimbursement problem that factors into practice profitability is the overhead faced by offices. “When you look at the amount of money it takes to clean an operatory, between the OSHA standards and the employees, it’s about $70 just to clean the room and get it ready for the next patient,” she says. “But reimbursement may be only $36 for a cleaning. When patients are coming in and only wanting what insurance covers, and they have a very small co-payment, the dentist has lost money by cleaning that patient in that chair. You can only do that so many times a day.”

Indeed, Levin deems declining insurance rates to be a key factor affecting the business of dentistry today. “It’s a game changer because it lowers practice production. The only way to offset that is with higher volume,” he says.

Levin argues that most dentists today should be concentrating on converting their practices into extremely well run businesses, something most do not learn in dental school. “It’s a matter of overhauling the practice with excellent systems to maximize efficiency,” he says. “By putting in highly efficient systems, dentists can see a higher volume very comfortably, efficiently, and with low stress to compensate for the lower insurance reimbursements.”

The Industry Perspective

Although Levin says reports of declining reimbursement rates are ubiquitous among his clients, Ireland sees little evidence of such a decline. A former insurance regulator, she says, “Just knowing the complexity of it, it’s really not possible for insurers to reduce reimbursements wholesale. They’re not going in across the board and somehow manipulating them.” Instead she suggests there may be other factors driving that perception.

A few PPOs have so-called schedules of charges that reimburse a set amount per procedure, but that is uncommon, Ireland says. “For the most part, the PPOs send out a contract for which they establish a level of reimbursement,” she says. “For example, it might be 80% or 75% of what shows as the usual charge in a given area. On a year-to-year basis, that’s not going to change. A lot of the contracts, particularly with large employer groups, go 2 and 3 years out.”

What changes constantly, according to Ireland, are the data about the usual charges that underlie the reimbursements. That information is collected by FAIR Health, a national independent not-for-profit corporation whose mission is to bring transparency to health care costs and health insurance information. It maintains databases about dental charges throughout the United States. Dentists submit the data about what they’re charging (not what they’re being reimbursed) on claims, and that information is provided to FAIR Health by the carriers. Carriers get aggregated FAIR Health data several times a year, and at least once a year, insurers adjust the underlying rate for the various procedures based on that data.

“For the most part, the rates creep up, but maybe not a lot,” Ireland says. “If a procedure costs $100, and the trend is up a half of a percent, then what you get is $100.50 for the next year.” Eighty percent of that additional 50 cents may be imperceptible to the practicing dentist.

As additional evidence that reimbursement rates have not generally declined, Ireland points to a December 2014 research brief from the American Dental Association (ADA) Health Policy Institute that analyzed data about both Medicaid and private dental insurance reimbursement for pediatric dental services in all 50 states.4 When the analysts adjusted the private dental insurance charges occurring between 2003 and 2013 for inflation, they found that average charges in 31 states increased more than the rate of inflation. That was not the case in 19 states, but Ireland asserts premiums in those states also likely did not rise much either. The ADA concluded that, unlike Medicaid reimbursement, “private dental insurance reimbursement has kept up with inflation in most states.”4

Ireland’s view that dental reimbursements generally have not declined is echoed by Doyle Williams, DDS, vice president of carrier relations and insurance operations at Aspen Dental Management, Inc. The former chief dental officer for Delta Dental of Massachusetts and national dental director for Anthem Blue Cross and Blue Shield, Williams declares that currently fees paid to dentists “are not decreasing. They never have. But they’re not going up as fast as they once did, and in a lot of cases, they’re staying stagnant.”

Coverage Concerns

Williams adds there is a trend with coverage that is a lot more disconcerting than reimbursement rates that are slow to increase.

In the past, there were many procedures that weren’t covered at all by insurance, he explains. These included implants and tooth whitening. But Williams says a current trend is for insurers “to say that everything is covered—but some of the coverage is zero.” In practice, this means insurers can dictate what dentists can charge patients for non-covered services.

“It came to the point where the only way somebody like Delta could say they were better than everybody else was to say [to patients], ‘We can even control your out-of-pocket costs. So if you want to go have your teeth bleached, or you want to have an implant or something that’s not covered, we’ll keep the doctor from gouging you on those procedures,’” Williams says.

Within the last few years, dental associations in a half dozen states have persuaded their legislatures to pass laws that prohibit insurance companies from dictating charges for non-covered services, Williams explains. “That’s what organized dentistry needs to do, is stop that,” he says. “But they have to fight it state by state.”

He argues that another critical battle has shaped up regarding the assignment of insurance benefits. “The way insurance companies have operated since Day 1—the way they get 90% of doctors to sign up with them—is that if you’re not participating, the benefit check goes to the patients,” he says, “and good luck getting that money.” But he says laws have recently been passed in almost a dozen states enabling patients to assign their insurance benefits to dentists who are no longer participating in a given plan. “So if Plan X out there decides they’re not increasing the fees,” he says, “and after 2 or 3 years, they’re below the level that allows me to make a living, I can just say, ‘I want to keep seeing my patients, but I need to bill them up to my charges. So I’m going to drop out of your plan, but you still have to send me the check.’” Widespread passage of such laws would destroy “the unfair advantage that insurers have over dentists,” Williams contends. “And patients would be happier. But I have the hardest time convincing state dental associations that they have to pass that legislation in their states. They don’t understand why it’s important.”

The Medicaid Factor

The establishment of the Affordable Care Act (ACA) is also “changing the dental benefits landscape,” according to another December 2014 ADA Health Policy Institute research brief.5 The primary impact relates to Medicaid. The research brief’s authors had previously concluded that expanded Medicaid eligibility and increased enrollment efforts could enable up to 8.3 million adults to gain Medicaid dental benefits in 2014. The later report, focusing on growth in the Medicaid market, found that in the 31 states that offer dental benefits beyond emergency care to adults on Medicaid (and the District of Columbia), the number of adults receiving such benefits could expand by an average of 51.9%.

“Our analysis shows clearly that the growth in the Medicaid market in many states is significant—more a tsunami and less a trickle,” the analysts concluded. “Even in many states that are not expanding Medicaid under the ACA but provided adult dental benefits, there will be significant growth in the Medicaid market.”5

Some authorities question the impact of this expanded eligibility, given the low rates at which Medicaid reimburses dental care providers. But Allen Finkelstein, DDS, a dental insurance expert who is the chief executive officer and founder of the Bedford HealthCare Solutions dental consulting group, says Medicaid has been used increasingly in dentistry over the past 2 years. “The greatest growth in total dollars spent since 2014 has been in Medicaid dentistry for adults. Commercial is going the opposite way, and fee-for-service self-pay is just barely hanging on,” he says.

Finkelstein acknowledges that Medicaid reimbursements are low. “Should they be higher? If you ask any dentist, you’ll hear that they absolutely should be higher,” he says. “They will also say the same thing about commercial insurance. The ceiling is never satisfactory to a practicing dentist. The question is: how about becoming more efficient in your office? Offices that participate in Medicaid dentistry have to be efficient.”

Finkelstein echoes Levin’s sentiment that volume is an important piece of the puzzle. “The successful offices have patients in the chair all the time. That is the key,” he says. “It’s what I like to call the airline model. You can’t fly from one airport to another if you’re at 50% or less occupancy. Dentists who understand that business model have been very successful.”

Finkelstein says it was during his tenure as chief dental officer with AmeriChoice/United Health Care that he came to believe Medicaid reimbursements should be outcome-based rather than disease-oriented. “If a dentist takes patients in a disease state and stabilizes and maintains them in a healthy state and maintains that healthy state over time, I do believe they’re entitled to higher reimbursement,” he says. “We now have such incredible metrics and provider profiling. We can tell you who’s delivering quality care in a given locale when we compare it to other dentists in that locale or with the national average.”

With AmeriChoice, he rewarded better performing doctors with higher reimbursement fees and direct referrals from his call centers, but “we also rewarded dentists by waiving prior authorizations based on the quality of the dentistry of the office.”

Finkelstein adds that he believes part of quality means providing access to care. “If a dentist provides evening hours, if he provides weekend hours or emergency hours, I think the provider deserves a higher reimbursement than a dentist who’s there from 9 to 5 and open 4 days a week,” he says. “Too often dentists think 4 days a week is normal. And then they complain that their revenue is down.”

New Plans to Control Costs

Another trend focused on outcomes is that of so-called “narrow networks.” Steven Keller, a former dental insurance executive who now works as a consultant in the industry, says, “With health care reform getting into full swing, typically the largest enrollment numbers on health care exchanges (usually in the 80%-90% range) belong to the two least expensive medical plans. These plans usually have developed narrow networks of physicians, hospitals, and other health care providers that have demonstrated that they can treat members in a more cost-effective manner with similar outcomes to higher cost providers.”

Today some dental insurers are starting to actively analyze the benefits of adding such narrow network options to their mix of products as a way to offer a more cost-effective network to their clients, Keller says. “By doing so, they can actually increase the level of benefits available to members while lowering the employer’s premium,” he says. “This trend would be a win for the patient, the employer, and the insurer, but not necessarily for those dentists seeking ever-increasing fees.”

James Bramson, DDS, the chief dental officer with United Concordia Dental Companies, Inc., mentions yet another shift that’s being driven at least in part by the ACA, namely a trend away from fully insured service and toward Administrative Services Only (ASO) agreements. Bramson explains that traditionally, insurers have provided a set of benefits in exchange for insurance premiums, and they have shouldered the risk of calculating the volume of the services for which they’ll have to pay. Now, however, he says, “a lot of companies are moving to arrangements where what they’re purchasing from us is simply backroom administration—enrollment of their people in the claims process and the payment of checks. But the actual cost of all the care that gets delivered and all the services—how many amalgams or prophies, for example—that’s actually paid by the company that buys the administrative services. They’re self-insuring.”

He explains that the ACA is driving this trend “because all the ACA taxes get built into an insurance product, but they don’t get built into an ASO product. Also, the ASO product doesn’t have to adhere to the covered mandates. They can have a plan that has different co-payments or they can have different services that are or are not covered.” The bottom line is that the ASO arrangements can be more flexible.

Bramson says while once only large companies would even consider self-insuring, “now sometimes companies with 100 or even 75 employees are looking at it. And if their claims history is uniform from year to year, they’re fine. But if all 75 people have some really big problems, the company is on the hook for it.”

At least in the short term, the rising popularity of ASOs can mean more confusion for practitioners due to the wide variety of possibilities and arrangement. “And especially with small employers, they’ll probably look for ways to mitigate the benefit coverage as a way to limit their overall costs,” he says.


1. Manski RJ, Brown E. Dental use, expenses, private dental coverage, and changes, 1996 and 2004. Agency for Healthcare Research and Quality website. Accessed January 18th, 2016.

2. Who has dental benefits? National Association of Dental Plans website. Accessed January 18th, 2016.

3. 2015 NADP/DDPA joint dental benefits report: enrollment. National Association of Dental Plans website. Accessed January 18th, 2016.

4. Nasseh K, Vujicic M. Are Medicaid and private dental insurance payment rates for pediatric dental services keeping up with inflation? American Dental Association website. Accessed January 18th, 2016.

5. Yarbrough C, Vujicic M, Nasseh K. Medicaid market for dental care poised for major growth in many states. American Dental Association website. Accessed January 18th, 2016.

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