Usual, Customary, and Reasonable Fees

Have you ever submitted a claim to your insurance company for dental treatment, only to receive a letter from them stating the charge submitted was in excess of their usual, customary and reasonable fees? If so, you're not alone.

A recent survey conducted by the Academy of General Dentistry indicates that approximately 82.2 percent of our member dentists have patients who also have received the same letter. These patients have turned to Academy member dentists to get answers on why dentists' fees don't match what the insurance company is willing to pay under its schedule of "usual, customary and reasonable (UCR)" fees.

What are UCR fees and how do they affect you?
Insurance companies establish UCR fees. Here's how they do it:

• A "usual" fee is the fee that an individual dentist most frequently charges for a specific dental procedure.
• A "customary" fee is the fee level determined by the administrator of a dental benefit plan from actual fees submitted for a specific dental procedure. This fee establishes the maximum benefit payable for that procedure.
• A "reasonable" fee is the fee charged by a dentist for a specific dental procedure that has been modified by complications or unusual circumstances. Therefore, it may differ from the dentist's usual fee or the benefit administrator's customary fee.

The concept of using UCR fees to determine how much to reimburse patients covered by dental insurance for specific treatment was introduced by the insurance industry in the early 1960s.

How are UCR fees determined?
UCR fees are influenced by the fees dentists charge in various geographic areas and by the population size. Usually, heavily populated areas, where the cost of living is higher, have higher dental fees.

The Health Insurance Association of America (HIAA), an organization of 380 health insurance companies, surveys dentists every six months on their fees. The fee survey helps insurance companies set UCR fees.

However, insurance companies are not legally required to use HIAA's fee survey or anyone else's information when setting UCR benefit levels. In fact, reimbursement calculations by insurance companies are unregulated and uncontrolled.

How about UCR fees that don't cover all costs?
UCR rates may be outdated. Despite HIAA's attempts to update fee data regularly, often it is simply too difficult to keep up with changing information. It may take up to two years for dentists to return HIAA's fee surveys, for HIAA to compile the data, and for member insurance companies and subscribers to receive it.

Geographic differences may not be fairly taken into account when insurance companies set UCR rates. While boundaries are commonly set according to zip code, insurance companies are free to create boundaries as they choose. They may split a state in half or lump several small communities together to determine one boundary. If a large city and a small town are considered to be within the same boundary, large discrepancies in fees would exist.

UCR fees widely vary among carriers. The Washington State Dental Association conducted a survey of 41 carriers on how they determine UCR fees; 28 responded. The data indicated that no two carriers use the same UCR definition. Carriers use different methods and different time frames to determine UCR rates. Customary fee determinations made by carriers for the same procedure in the same city at the same time differed by as much as 136 percent.

What accounts for the difference in dentists' fees and UCR rates?
In addition to the limitations of UCR fees, any difference between the fee charged and the benefit paid is due to limitations in the patient's dental benefits contract.

How are your dental benefits and reimbursement determined?
Your benefits are only as good as the plan your employer has purchased for you as an employee benefit. The higher your monthly premium, the better your benefits-you'll receive more dental services as a covered benefit, fewer services will be excluded, and your reimbursement levels will be higher.

UCR reimbursement levels are based upon a set percentile.They are also dependent upon the type of plan that was purchased. Each plan varies in the fee percentile it will reimburse, and insurance companies may vary in the way they compute percentiles. Percentile is that fee of which a certain percentage of dentists charge less and the rest of the dentists charge more.

For example, the 90th percentile-most commonly used as the upper limit on allowable fees-means that 90 percent of all fees submitted were less than the indicated amount. When a 90th percentile reimbursement is used, 90 percent of all fees charged to patients will be paid in full-depending again upon your plan, and if they are considered to be usual and customary. Any fee higher than this amount will be considered by the insurance company to be outside the range of customary fees, despite the fact that it may be the dentist's usual fee.

The reimbursement will depend on the cost and type of treatment you've received from your dentist. Dentists are required to submit information to insurance companies when filing claims, including the exact treatment provided and the procedures performed, to help insurance companies pay dental claims.

How does your dentist determine the fee?
Dentists determine fees based on the cost of delivering treatment, the cost of the time involved to provide patients with the necessary dental care, and the overhead cost to operate a practice. The cost of overhead is often 60 percent of a dentist's income and includes the cost of equipment, rent, staff salaries, and supplies. An increased emphasis on sterilization supplies and procedures has resulted in some fee increases.

What should you do if your dentist's fees exceed your plan's UCR rates?
First, keep in mind that dentists base their treatment decisions on patient needs, and not on insurance coverage. Chances are good you have received the best dental care necessary to maintain optimal oral health. So, stay calm. You do have rights, and some options:

• If your insurance company says that your dentist's fee exceeds the UCR rate for the services provided to you, do not simply accept this as fact. Again, consider the limitations of UCR fees. Discuss the matter with your dentist. Ask for reconsideration of the expense by having the dentist send any additional information that was not included with the original claim, and that could be the basis for a review. Your dentist will be cooperative in helping you refile claims, provide additional information, and investigate problems.
• If, after you have talked to your dentist, you still believe that the dental benefits provided by your plan are inadequate, discuss the matter with your employer or union-the plan purchaser. Often, employee-input can bring about administrative change in the types of dental plans being purchased. Discuss your claim and how your dental benefits work. If you are still not satisfied, you may on your own want to purchase a more suitable dental plan.

Remember that these alternatives may not always help. You may ultimately wind up paying the difference yourself.

Be a good consumer
Ask questions before you receive dental treatment. Ask about the services you need, your alternatives, and the cost. Discuss beforehand with your dentist what your dental plan will cover, if you'll have to pay anything out-of-pocket, and how much. The more information you can get up front, the better.

[ Credentials ] [ About Us ] [ FAQ ] [ Testimonials ] [ Links ]
[ Inquiries ] [ Cosmetic ] [ Instant Ortho ] [ Restorative ] [ Implants ] [ Imtec MDI ]
[ Enamel Repair ] [ Zoom Whitening ] [ Failing Veneers ] [ Preventive ] [ Snap On ]
[ Gum Disease ] [ Root Canal ] [ Emergency ] [ Interview ] [ Replace Veneers ]
[ Bite-Occlusion ] [ Gum Shaping ] [ Dental Laser ] [ Adult Overbite ] [ Denture Cosmetics ]
[ Procedure Videos ] [ Photo Gallery ] [ Consult Request ]
[ Celebrity Photos ] [ Extreme Makeovers ] [ Face Lift Dentistry ]
[ Map-Directions ] [ Home ]

Boca Raton Cosmetic Dentist ®
Cosmetic and Restorative Dentistry in
Palm Beach County Southern Florida
2900 N. Military Trail, Suite 105
Boca Raton, South Florida FL 33431
561-368-3440
Copyright© 1997 - 2008
Powered by DentMedHost
Internet Dental Marketing