A Word to the Wise - An Explanation of Third Party Payment for Dental Care
In recent years there has been a significant increase in so called "managed health care" in which insurance groups make contracts with local companies to provide health care for specified fees and with numerous regulations and stipulations for patients. Your employer may attempt to provide dental insurance for you using one of these managed care programs. The following information will be helpful to you and your employer to help understand the concept and its advantages and disadvantages.
PPO(Professional Provider Organization)
An insurance company owning the contracts with your employer to provide dental care to you. The dentists who participate in the PPO plan often agree to treat you for significantly reduced fees. They are called "preferred providers." Dentists with active practices providing modern "standard of care" updated dentistry cannot usually participate in the PPO's because of the low fee levels preventing them from providing their usual high quality level of care. Insurance companies providing PPO's are in "business" to make a profit and the profits go to the PPO owners. In today's world of technology and with the myriad of new innovations in dentistry, it is very difficult for updated practitioners to provide "state-of-the-art" high level standard of care services on a continuing basis to you at the fee level provided by most PPO's.
HMO or DMO(Health or Dental Maintenance Organization) or Capitation Plans
Perhaps the greatest threat to quality dental health care is the currently in vogue HMO. An insurance company HMO makes a contract with your employer to provide overall health care or dental care for you at an unbelievably low fee level. In many areas the fee levels provided often do not even provide the total of 2 dental cleanings per year. The dentist receives a few dollars per patient per month, whether the patient is treated or not. Obviously, under these circumstances the dentist would rather NOT see the patient and certainly would rather not do any treatment all of which must be "donated" by the dentist.
Traditional "fee-for-service", freedom of practitioner choice, dental insurance plans have provided excellent dental service for Americans for decades, and they still do.
Additionally, a newer form of dental insurance called DIRECT REIMBURSEMENT (DR) can be obtained by your employer, in which you have complete freedom of choice about practitioners and the quality level or type of service you want.
What is DIRECT REIMBURSEMENT and how does it work?
A completely logical approach to dental payment. In direct reimbursement, employers work at minimal or no cost with consultants to design plans the meet their needs and expectations and that would satisfy their employees. In some locations dental societies provide such consultation. The American Dental Association will provide assistance and information to you by calling their Purchaser Information Service at (800)621-8099.
A funding level is decided on that the employer wants to provide for employees. Either hired consultants or the funding company itself may administer the plan.
A bank account is set up in the employer's name, and information about the plan is distributed to the employees. Accumulated funds are the employer's and do not belong to an insurance company. Interest on funds belongs to the employer.
The employer places money into the account each month for the employees. Just as they would pay the insurance premium except the money is being deposited into the DR account.
Employees turn in paid dental expense receipts, and they are reimbursed from the account. Paid dental services can be planned to be anything patients desire, including cosmetic dentistry, orthodontics and others.
Unlike typical insurance plans where up to 50 percent of employer funds go to plan administration, direst reimbursement provides nearly all of the employer's funds to the employees! It is simple, cost effective and everybody involved wins.
With direct reimbursement, free enterprise, quality dentistry and patient freedom are all present. Like I said before-Everybody wins-patients, dentists, and employers.
I hope that this information has lent some insight to third party payment for dental care.
