Dental Health Care Financing Lecture PDF

Health Care Financing Prof. Glushchenko Goal:  To present information on methods of financing dentistry in the United States Objectives:  At the completion of this lecture the student will be able to: Identify four different types of payment methods Describe the diffe...

Health Care Financing Prof. Glushchenko Goal:  To present information on methods of financing dentistry in the United States Objectives:  At the completion of this lecture the student will be able to: Identify four different types of payment methods Describe the differences between Medicaid and Medicare Identify the differences between HMOs and PPOs Introduction The financing of dental care in the United States has become a challenge over the past decade. Dental insurance used to be a basic benefit for employees, but now is one of the first to be cut as a means of saving jobs. Financing of dental care is done both by private and public sectors, through insurance companies and government funding, but is for the most part the responsibility of the patient. The cost of dental care has also steadily increased, and as a result, the number of people receiving dental care has been low. Reasons for Increasing Costs Substantial rise in income for health care providers The practice of defensive medicine (procedures that protect the provider) Unbalanced economic scale To increase the amount of care, manpower must increase at the same rate, which will increase cost Increase in the elderly population, who have more serious and costly medical conditions Reasons for Increasing Costs Cont’d  New developments in technology and advancements in treatment  Requires more money for research and implementation  CT, dental centrifuges  Increased costs of third-party payment plans  The public’s increasing expectations of procedures available  I.e., demand for transplants, cosmetic procedures and esthetic surgeries Methods of Payment for the Private Sector Two-Party Plans Third-Party Plans Fee-for-Service Plan Capitation Plan Encounter Fee Plan Barter System Two-Party Plans Parties involve the patient and the dental provider Patient pays dental office directly for services rendered Third-Party Plans Parties involved the patient, dental provider, and insurance company Participating dental practice has contract with insurance company Patient pays the insurance company premiums, and the insurance company pays the dental practice for specific procedures Out of Pocket Expenses Deductibles Copayment The amount a subscriber must Portion of the cost of each service pay for dental services before the patient pays their insurance company will begin to pay Fee-for-Service Plan Most common payment method in the U.S. Based on a fee scale for all covered services, and the patient or insurance company must pay the fees Cost of procedures are determined by UCR fees Discounted fees may sometimes offered for target population (seniors, student, etc.) UCR Fees  Usual  Fee that is most often charged for specific service  Customary  Schedule of maximum fees for a specific service within a specific geographic area  Reasonable  Meets the usual and customary fees, so is justifiable Preferred Provider Organization (PPO) Associated with fee-for-service payment plan The dental practice has a contract with a PPO to provide dental services for lower than average fees to attract patients seeking lower costs Patients pick a participating provider PPO Cont’d Sometimes accompanied by co-payments or deductibles, or pay only a majority of the fee leaving the patient with an out of pocket (80%/20%) Patients may reach an annual maximum Certain procedures may require a waiting period before it can be done again (i.e. SRP 1x per 24 months) Indemnity Plans Common fee-for-service insurance plans Dental provider treats patient Practice may bill patient, who will then submit to insurance company for reimbursement Practice may bill insurance company and will be paid by them directly Pre-authorization is often needed Direct Reimbursement An employer agrees to pay a portion of the employees dental care as a method of financial assistance The employee can pick a dentist of their choice The employee (patient) pays the dentist directly, and submits the record of treatment to the employer. The employer then reimburses the employee according to the agreed upon reimbursement schedule Capitation Plan Third party pays dental provider a set monthly fee to see a specified group of patients Dental provider is paid regardless of if patients use care or not Monthly fee is based on number of patients in the group The provider must meet all needs of patients in the group with the allotted money, otherwise pay out of their own pocket Health Maintenance Organization (HMO) Considered to be a Managed Care Organization, which were created in 1973 by the Health Maintenance Organization Act Providers are paid by means of a capitation plan Patient picks a provider who participates with the plan Only specific services are covered (mainly preventive) to keep costs low HMO Cont’d IF A PATIENT NEEDS TO SEE A CALLED “MANAGED CARE” MAY LEAD TO ORGANIZED SPECIALIST THEY MUST GET A BECAUSE THE INSURANCE DENTISTRY REFERRAL, AND THAT DOCTOR COMPANY IS INDIRECTLY ALSO MUST PARTICIPATE WITH OVERSEEING WHAT THE HMO PLAN PROCEDURES ARE DONE Encounter Fee Plan Dental practice receives payment for each encounter, no matter what service is provided Treatment may be broken up into several visits, as opposed to have all treatment done the same day Each appointment receives the same fee May decrease overall production because it becomes inconvenient for the patient Barter System Involves the exchanging of goods or services without the use of money Still exists in the U.S., but mostly in more rural areas Only is used in the private sector Billing Each dental procedure is given a five- character, alpha-numeric code, which is used to bill insurance company Dental Insurance Code Procedure Adult Prophylaxis D1110 SRP (4+ teeth per quad) D4341 SRP (1-3 teeth per D4342 quad) Adult or Child Fluoride D1208 Sealants D1351 Bitewings (4 films) D0274 Billing Cont’d If patient has insurance the dental practice will file a claim, and the company will pay the practice directly; or the patient will pay, and file for reimbursement. Both will receive an explanation of benefits Self pay patients generally pay at the end of the appointment, unless the practice offers payment plans Dental credit cards may be used (CareCredit) Government’s Role in Funding Dental Care  The government gives most responsibility for seeking and receiving oral health care services to each individual.  The total federal, state and local governments’ share of dental care expenses is about 4%  Funds programs for research, disease prevention and control (fluoridated water, fluoride rinses and sealants at schools), planning and development of dental programs, and education of dental professionals  Most government funding for health-related programs are conducted through the department of Health and Human Services (HHS) Oral Health Activities Conducted by the HHS  Developed two categories of programs with the purpose of improving nation’s capacity to provide improved oral health protection and oral health care services.  Programs designed to provide improved oral health protection A. Biological research B. Disease prevention and control C. The planning and development of oral health programs. D. Education and service research E. Regulation and compliance functions such as quality assurance and assessment  Programs concerned with the provision of oral health care services, by providing care to specific groups by the U.S. Public Health Service A. The Indian Health Service B. Prisoners in federal penitentiaries C. Coast Guard personnel D. Merchant Marine personnel E. Underserved population Maternal and Child Health Service (MCH) A federal block Provides funding grant that often for programs such provides as the Women, preventive Infants and services for Children program women and (WIC) and Head children Start MCH Cont’d WIC provides health care to low income pregnant and postpartum women, and kids up to age 5 Dental hygiene educational services are provided in some states Head Start provides health care, as well as educational and social services to low- income pre-school children Dental care is a required service Dental services provided are oral health screenings, oral health educational programs and sealant programs Medicaid Federal program enacted in 1965 that gives states funding for health care to the indigent, but dentistry is an option that requires extra funding from the state Some states will provide Medicaid only to children under 21, can afford to pay UCR fees this way Many providers don’t accept Medicaid so they don’t have to treat indigent patients Reasons are: frequently missed appointments, difficult treatment issues, low reimbursement rates, bureaucratic paperwork, and not wanting Medicaid patients in the wait room with other patients Medicare Medical insurance for those 65 and older, and some disabled Consists of two parts Part one: Basic plan for hospital related care Routine dental care coverage is excluded Part two: Voluntary supplementary care for physician and other health care services Routine dental care coverage is excluded *Dental care is only covered when it is related to medical needs (oral/maxillofacial surgeries ) State Health Agencies Provides dental services that are typically limited to the following:  Preventive services for children under 18  Restorative and emergency services  Oral health screenings A small number of states also provide specialty services such as orthodontics, prosthetics or oral surgery Cost-Related Barriers to Dental Care Services are not affordable Insurance coverage is limited or not available Lost wages are more critical than perceived needs for care QUIZ QUESTIONS  1. PPOs are associated with which method of payment? A. Encounter Fee Plan B. Fee-for-Service Plan C. Capitation Plan D. Barter System  1. PPOs are associated with which method of payment? A. Encounter Fee Plan B. Fee-for-Service Plan C. Capitation Plan D. Barter System  2. Which government funded program provides dental care? A. Medicaid B. Medicare  2. Which government funded program provides dental care? A. Medicaid B. Medicare  3. Which of the following is not true regarding HMOs? A. Payment method is based on capitation plans B. Is a third-party plan C. Patients may pick any provider they wish D. Referrals are required for specialists  3. Which of the following is not true regarding HMOs? A. Payment method is based on capitation plans B. Is a third-party plan C. Patients may pick any provider they wish D. Referrals are required for specialists  4. The federal government is required to provide funding for all preventive dental services A. True B. False  4. The federal government is required to provide funding for all preventive dental services A. True B. False  5. UCR fees are fees that are: A. Determined amongst dental colleagues in order to offer competitive costs to keep business fair B. Based on national averages C. Based on the averages in a select geographic region D. None of the above  5. UCR fees are fees that are: A. Determined amongst dental colleagues in order to offer competitive costs to keep business fair B. Based on national averages C. Based on the averages in a select geographic region D. None of the above