“In-network” dentists, meaning dentists who have signed a contract with an insurance carrier, may not realize that their agreements may feature a restriction on fees for services not covered by the insurance carrier. Even though an insurance carrier will not pay toward a non-covered service or procedure provided after the patient’s annual maximum has been exhausted, they dictate the fee that the network dentist may charge. The dentist is not able to charge his/her “normal” fee, and in some cases may also be restricted in patient co-payment amounts. This practice is called “fee capping”.
Why would a dentist agree to this?
• The dentist wants to secure a reliable patient base during an economic downturn.
• The dentist already has a large population of patients with a “fee capping” plan. The “maximum allowable charge” feature may drive these patients to have more treatment accomplished, possibly off-setting the discount.
• The dentist is satisfied with the discounted fee.
• The dentist does not realize his/her contract includes this stipulation.
Surprisingly, “fee capping” may be imposed on both PPO providers and “premier” network dentists.
It is often a mystery how a carrier determines fees. Many refer to the payments they “allow” toward a procedure as “usual, customary, and reasonable” or UCR. However, in actuality, UCR might more accurately be termed “negotiated payment”. Typically an employer will select a plan that has the premium cost they want along with a benefit schedule they can accept. The payment that correlates to the premium and benefit selected are usually “negotiated” between the carrier and the employer. Therefore, the fee that is considered the “maximum allowable benefit” is a “negotiated payment” rather than “UCR”.
This summer the Rhode Island Dental Association was instrumental in the passage of a law in that state prohibiting insurance carriers from setting fees for dental services they do not cover.
Other states may see the passage of similar laws. In the meantime, dentists need to be aware of stipulations in the contracts they are signing. It is one thing to establish a relationship with a carrier based on mutual benefit. It is another to establish such a relationship without all of the facts.
(Help your patients understand the limited nature of dental insurance. Look at my patient brochure, “My Insurance Covers This….Right?” at