When it comes to designing your Delta Dental PPO™ plan, it can be difficult to find the balance between what employees want and what’s most cost-effective for your group. You may think that allowing for high out-of-network reimbursement will keep your employees happy. But high out-of-network reimbursement could actually be hurting them in unexpected ways.
Out-of-network utilization is when your covered employees visit dentists who aren’t in Delta Dental’s networks. It may seem trivial, but when a high percentage of your employees start receiving care outside of their network, there can be unexpected consequences. On an individual level, your enrolled employees may experience higher costs and miss out on quality guarantees, and high out-of-network utilization can make plans more generally expensive to account for the higher cost of care.
Percentiles are calculated by ranking a set of given fees from lowest to highest. On a list of 10 given fees, the eighth ranked fee would be considered the 80th percentile. There isn’t a set amount of space between percentiles, meaning that some percentiles may have the same fees.
In this simplified example, the 80th percentile is $27 and the 50th, 60th and 70th percentile are all $25. At the 80th percentile, 80% of dentists’ fees are paid as billed. Dentists whose fees are above this percentile are charging more than most dentists in their market.
Reimbursement rates are customizable by plan, dependent on your employees’ needs. But having high reimbursement rates for out-of-network dentists can bump up costs across the board. Non–Delta Dental dentists can set their prices wherever they want without being subject to contractual obligations. This not only allows them to charge higher prices but also discourages Delta Dental dentists from staying in network.
To illustrate, let’s assume the PPO contracted fee for a procedure is $600. If your plan covers that procedure at 50%, one of your employees visiting a PPO dentist would only need to pay $300, and your plan would pay the other $300. For the same procedure, an out-of-network dentist could cost your employee $538.
If your plan’s reimbursement for out-of-network dentists is based on the 90th percentile (which, let’s say, amounts to $925), your plan would pay 50% of $925, or $463. Your employee would pay $538.
|Fee||Delta Dental PPO dentist||Non–Delta Dental dentist|
|Reimbursement allowed by plan (MPA)||$600||$925|
|Reimbursement based on||PPO fee||90th percentile|
|Delta Dental plan pays
(50% of maximum plan allowance)
(Difference between “accepted fee” and “Delta Dental plan pays”)
(Difference between “dentist charges” and MPA)
This table is for illustrative purposes only.
Not only do your employees who go out of network pay more at the time of service, they also run the risk of hitting their annual plan maximum much more quickly. In the long term, a plan with a high rate of out-of-network utilization may also drive up premium costs by increasing claim expenses.
What’s more, high out-of-network reimbursement lowers the incentive for dentists to join or stay in Delta Dental’s networks. By staying out of our networks, dentists can charge higher prices and avoid quality monitoring like credential checks and in-person audits.
Ultimately, your employees don’t benefit from high out-of-network reimbursement.
While choosing an in-network primary care physician has become almost routine, many people seeking dental care are less aware of the value of choosing an in-network dentist and the disadvantage of visiting an out-of-network dentist.
When your employees choose to visit a non–Delta Dental dentist, they run the risk of being balance billed. That means their dentist may charge them more than the maximum plan allowance, and they’ll need to foot the rest of the bill. Delta Dental can’t predict enrollees’ out-of-pocket costs when they go out of network.
Since out-of-network dentists aren’t always paid directly by Delta Dental, your employees will typically be charged the full price of a procedure upfront, even if their coinsurance is less than the full price. After paying at the dentist’s office and submitting a claim to Delta Dental, they’ll receive a check in the mail for the portion of their procedure’s cost that’s covered by their plan.
When your employees visit a Delta Dental dentist, they’ll only be expected to pay their share and they won’t need to submit claims.
To participate in a Delta Dental network, dentists are held to high standards to ensure they provide consistent, quality care to their patients. These standards include:
When your employees visit non–Delta Dental dentists, we cannot guarantee that the practice meets Delta Dental’s rigorous credentialing and safety standards. Since these dentists are out of network, we have no mechanism to ensure they provide quality care and services to our members.
Luckily, there are a few things you can do to help your employees get the care they deserve.
The easiest way you can help today is by educating your group about the advantages of in-network dentists. Delta Dental has materials about the importance of staying in-network that are ready for you to share with your employees, including flyers and videos:
There are also more specific, customizable flyers available for request through your sales contacts.
To encourage in-network visits long term, work with your Delta Dental Sales representative to build incentives into your plan design that encourage visiting in-network dentists.
For example, these options (not available in all states) can help boost in-network utilization:
Talk to your Delta Dental Sales representative about updating your plan’s reimbursement levels to encourage employees to choose an in-network dentist. If your plan reimburses non–Delta Dental dentists at a high level, such as the 80th percentile, your representative can help you determine the appropriate level to meet your group’s needs.
By visiting Delta Dental network dentists, your employees receive the predictable, quality care that they deserve. Set up a meeting with your Sales representative today to develop a plan to encourage your employees to choose a network dentist.
Note: This post was updated to clarify the illustrative example.