THE ADA PRACTICAL GUIDE TO EXPERT BUSINESS STRATEGIES 5 Indemnity Dental Insurance Plans This plan pays a percentage of the dental services provided for the patient according to the policy purchased for or by the patient. Typically, this plan has co-payment requirements, waiting periods, deductibles, annual limitations, or graduated percentages. This is based on the type of procedure or length of time the policy has been in effect prior to starting dental treatment. Also, this type of plan does not restrict the doctor’s charges. However, these types of plans restrict the amount paid out for the procedure. The number of indemnity plans has been steadily and rapidly decreasing. The market saturation was 35 percent in 2002. By 2012, that number had decreased to seven percent and that trend is expected to continue downward. Dental Health Maintenance Organization (DHMO) A DHMO is an organization or group that delivers payment for dental services offered through a closed network of providers to its members in exchange for some form of pre-payment. That is, a DHMO will pay a pre-established monthly amount to a provider for each of their assigned enrollees. The provider must provide basic services covered under the DHMO plan in exchange for the prepayment. For services that extend beyond preventive, small co-pay is required. The dentist risks loss if the group over-utilizes care or if the dentist provides too many services. The terms and responsibilities of the provider are established by the DHMO contract. This type of plan has steadily decreased from a high in 2002 of 15 percent. From 2008 until 2012, that number has remained steady at eight percent of the dental plan market. A DHMO is an organization or group that delivers payment for dental services offered through a closed network of providers to its members in exchange for some form of pre-payment. Preferred Provider Organization (PPO) PPOs utilize a network of providers who have enrolled with a particular plan or administrator and have accepted the terms and conditions of the participation agreement. The agreement establishes parameters, by which the treatment provided for an enrolled patient is reimbursed. Dentists who have enrolled in the PPO network are bound by the terms of the participation agreement for that plan and its reduced fee schedule. Participants receive the benefit of the contracted fee or the practice fee, whichever fee is lower. Most PPO plans will allow the patient to seek treatment from a provider who is out of network. However, that provider is not bound by the terms and conditions established in that plan. Any difference in provider charges will become the financial responsibility of the patient. Most dental insurance plans have an annual maximum benefit limit. Once the annual maximum benefit is exhausted, any additional treatments are the patient’s responsibility. Due to the various plan limitations established in the PPO dental insurance products, the cost is reduced to the purchaser of the plan and the recipient of services. This type of dental plan is rapidly growing. PPO plans made up 42 percent of the market in 2002. As of 2012, PPO plans made up 78 percent of the dental insurance plans sold and administered. If you are a participating provider, you are contractually obligated to abide by the stipulations of the contract, plain and simple. There is no way to “get around” these concessions later, having signed the contract. Unfortunately, the detailed obligations between the dentist and the plan administrator are not always clearly outlined in the contract. This is why it is critical that you review your contract carefully before you sign anything. In addition, be advised that a “processing policy manual” will spell out additional criteria separately. Often this policy manual will not be offered with the contract. In essence, understand what has been signed so you know what is expected. If at some point the terms of the agreement cease to make business sense, the only remedy is to discontinue participation.