Welcome to Week 2 of our Dental Insurance crash course! This week we will be exploring what exactly it means when your dentist is in- or out-of-network, as well as clear up the confusion regarding some of the most commonly used acronyms.
In Network? Out of Network? What does it all mean??
It was only years into the introduction of dental insurance that plans decided to market themselves differently to dentists. They started to propose different rate structures for dentists who decided to sign up to be 'special providers' under each plan and thus promised that more patients would visit that office because they would get preferred rates. This can be a strange concept (especially for the large number of our patients who are not used to the American health and dental system) and so I will break it down with a simple example.
Let's pretend you are coming to a dental office for a general cleaning. There are three options for payment of your cleaning (let's price it at $200 for our example).
Option 1: You have no dental insurance, therefore you will be responsible for paying the full charge. You pay $200, the dentist receives $200.
Option 2: You have dental insurance that your dentist does NOT participate in (ie. he/she is out-of-network) and covers you at 100%. You pay $0, the dentist receives $200.
Option 3: You have a dental insurance plan that your dentist participates in (ie. he/she is in-network) and covers you at 100% for cleanings. You pay $0, the dentist receives $110.
What did you notice about the above scenarios? In options 1 and 2, the dentist is receiving the full cost of the service for the cleaning, and depending on your coverage, you either pay or don't pay. In option 3, you have insurance and therefore pay nothing, but the dentist is only receiving $110. This amount is the 'allowable amount' under the dentist's contract with your insurance plan and the other $90 is designated as a write-off (the dentist doesn't collect it and you can't be charged for it). This is what it means to be in-network: The dentist and dental insurance have agreed on a 'negotiated rate' for any given procedure and the dentist will agree to waive the difference between their set office fees, and the fees that are received by the plan. These negotiated rates are generally set based on zip code so any participating provider in the same area will be held to the same rates (Note: this does not apply to office fees, only insurance's contracted rates).
This is of course a very simple example and there are a variety of factors that may negate the above outcome, but that's a topic for next week.
But if I pay zero either way, why does it matter?
What then, is the benefit to you the patient, for finding an in-network dentist if you pay nothing either way? Well, the above example only showed you the fees at 100% coverage. If you require restorative work, such as a filling or a crown, you will see more of the benefit. Let's take a look at an example for this scenario. Let's assume you are getting a crown and the fee for the crown is $1000:
Option 1: You have no dental insurance so you pay $1000 and the dentist receives $1000.
Option 2: You have an out-of-network plan with 50% coverage for crowns so you pay $500, the plan pays $500, and the dentist receives $1000.
Option 3: You have an in-network plan with 50% coverage for crowns. The negotiated rate between the insurance plan and your dentist is $700 (which means $300 is immediately written off). Your plan pays $350 (50% of the remaining $700) and you pay $350 (the other 50%) and your dentist receives $700.
As you can see, your in-network dentist is losing some money, but you have saved $150 by going to see them instead of an out-of-network dentist. Why do dentists bother participating with plans if they lose money on them? Well, the way dental insurance is set-up and marketed, patients are encouraged to see dentists in their own network to maximize their savings (as in the example above). Therefore, if a dentist does not participate in any dental plans, they are likely losing out on many patients coming to their office.
OK, so how do I know if I will be in-network or out-of-network?
Well, the easiest thing to do is reach out and ask! We participate in 7 major plans: Altus, Blue Cross Blue Shield of Massachusetts, Delta Dental, Principal, Metlife, Guardian, and Cigna.
But wait, it's not that easy! Certain plans have network designations and each one may require the dentist to sign up separately. This means that a dentist accepting Blue Cross, may only be part of one of their offered networks, and not the others (as is the case with our office). This is why it's important to not only be aware of the name of your insurance company, but also what type of plan it is. The most common designations are:
PPO: Preferred Provider Organization
- This is the original, and by far the most common, designation. This designation typically does not limit which dentist you can see (meaning they will provide some sort of coverage for both in- and out-of-network providers), but the coverage rates may vary between the two.
EPO: Exclusive Provider Organization
- Many plans are moving towards this type of designation because it limits you to seeing dentists in the network only. If you see a different dentist, you will likely have no coverage and will be responsible for the full cost of the appointment.
HMO: Health Maintenance Organization
- These types of plans are not that common in Massachusetts, but they generally will pay fully for every visit (no different tiers of coverage) with no annual maximum, as long as you see a provider in their network.
Different insurance companies may use slightly different terminology, but the basics above remain the same. The other things to be careful about is making sure that each provider in a given office is in-network your plan. Some larger offices with multiple dentists may have some that participate with your plan, but others that don't. Participation is by dentist, not by office! Luckily, we like to keep things simple so both Dr. Lally and Dr. Dautaj are in-network for all of the same plans.
That's a lot of information to process!
We know! We deal with insurance and these details every day so we are always happy to sit down and help you to understand your network status or try to go through your plan with you. Just give us a call!
Next week we will discuss the nitty gritty of dental plans and the things that you should pay close attention to so you won't have any surprises.