Finance In Dental Care Question And Answers

Finance In Dental Care

Question 1. Write short note on dental payment.
Answer. Dental payment is defined as “an arrangement under which a carrier and a beneficiary are liable for a share of the cost of dental service provided” Dunning.

• Mode of payment in dental care:
  • Fee for service
  • Post payment plans
  • Prepayment plans or third party payment plans
    • Insurance companies
    • Nonprofit health service corporations, e.g. Delta dental plans, Blue Cross or Blue Shield
    • Prepaid Group Practice
    • Capitation plans.
  • Salary
  • Public programs.

Fee for Service

• Most accepted in India.
• Fee for service is integral part of private practice as a delivery method.
• It is culturally accepted.
• Fee can be changed depending on the market condition.
• Its administration is simple.

Read And Learn More: Public Health Dentistry Question And Answers

Post-payment Plans or Budget Plans

Here the patient borrows loan from bank and pay to doctor and money is return to bank with some interest.

Prepayment or Third Party Payment Plans

• It is also known as “dental health insurance”.
• It is the payment for service by some agency rather than directly by the patient.
• Dentist and the patient are the primary and secondary party and the insurance companies are the third party.
• Third party is also known as carrier or insurer, such as insurance companies.

Dental Insurance

• Insurance carriers provide different types of payment like:
  • Deductible called as ‘Frontal end payment’
  • Co-insurance also called ‘Co-payment
  • Group insurance.
• Delta dental plans: The national health association of dental science plans’ was changed its name to delta dental plans.

Salary

Dentist in some group practice, some government practice or private sector, where they are given fixed salary per month.

Public Programs

Public programs are sponsored by government and also community health centers.

Question 2. Write short note on delta plans.
Or
Write short note on delta dental plan.
Or
Write short answer on delta dental plan.
Answer. Delta plan is a legally constituted nonprofit organization incorporated on a state by state basis and sponsored by a constituent dental society to negotiate and administer contracts for dental care.

• Underlying philosophy of delta plans is that dental practitioners can adapt their traditional patterns of practice to meet the demand for group purchase of dental care.
• Delta plans have specific approaches to ensure the quality of care provided and to keep program’s cost within limits. Quality of care is monitored to ensure that,
  • The care claimed and paid for intact being provided
  • It is of “acceptable” quality.

Reimbursement of Dentist in Delta Plan

• The way in which a dentist is reimbursed depends on whether the dentist is participating or nonparticipating in plan.
• A participating dentist is defined as any duly licenced dentist with whom a delta plan has contractual agreement to render care to covered subscribers.
• Nonparticipating dentists can also treat patient’s covered under delta dental plan. They are paid at considerably low percentile than the 90th, often at median or 50th percentile.
• Dentists which participate in the plan should become agree for the following conditions i.e.
  • Pre-filing of their usual as well as customary fees.
  • Acceptance of the payment for their services at 90th percentile of fees as the payment in full.
  • Fee audits, by auditors from the delta plan, who can check their office records from time to time. Here main purpose is to ensure that dentists are charging their delta plan patients the same fees as they charge to the other patients.
  • After the treatment inspection of randomly chosen patients for monitoring the quality of care.
  • Withholding small amount of each fee to go into Delta capital reserve fund.

Question 3. Write short note on third party payment.
Or
Write short answer on third party payment.
Answer. Third party payment is defined as “payment for services by some agency rather than directly by beneficiary of those services”.

• In the third party payment dentist and patient are the first and the second parties respectively and administrator of finances is known as third party.
• The purchaser of this type of plan can be organized private group, e.g. a union or it can be an employer, a government agency or union employer welfare fund.
• When government act as third party and term commonly used is public financing.
• In private third party plans premiums are collected to meet the cost providing care as well as administrative cost of third party.

Principles of Insurance and the Dental Care

To be insurable a risk should:

• Be precisely definable
• Be of sufficient magnitude that if it occurs, it constitute a major loss
• Be infrequent
• Be of an unwanted nature
• Be beyond the control of an individual

All the health insurance schemes violate some of these principles, as illness is not predictable for an individual and health care should be a usually wanted service. So due to these problems, various types of payments are offered by insurance carriers:

• Deductible: This is sometimes known as front end payment. It is stipulated flat sum which the patient must pay towards the cost of treatment before the benefits of program come under effect.
• Co-insurance: This is also known as co-payment. According to this patient pays a percentage of total cost of treatment. Co-insurance is defined as “an arrangement under which a carrier and beneficiary are each liable for a share of the cost of dental services provided”.
• Group insurance: This is offered only to the groups. It is because of illness experience is reasonably predicted in a group. Probability of an adverse selection is decreased by use of waiting periods after enrolment before any benefits become available.

Reimbursement of Dentist in Prepayment Plans

For reimbursement ADA support concept of Usual, Customary and Reasonable (UCR) fee as preferable method for reimbursement for the dentists in prepayment plans.

• Usual fee: It is charged for a given service by an individual dentist to private patients as his or her usual fee.
• Customary fee: Customary fee is in the range of usual fee charged by dentists of same training and experience for same service under the specific and limited geographic area.
• Reasonable fee: A fee is reasonable when it meets the above two criteria or when it is justifiable considering special circumstances or when there is particular patient in question.

So apart from UCR fees, only single form of payment plan is table allowances.

Table Allowances: It is defined as the list of covered services which assigns to each service a sum which represent the total obligation of the plan with respect to payment for such service but that does not necessarily represent a dentist’s full fee for that service. If the fee of dentist becomes more than assigned to that service by carrier, the remainder should be collected by dentist from the patient. This is not entirely satisfactory as patients are often aware that plan might not cover them in full or dental care.

Private third party payment plan is divided into:

• Commercial insurance companies
• Non-profit health service corporations i.e. delta dental plan and Blue cross blue shield
• Prepaid group practice, including the health maintenance organization and independent practice association.
• Capitation plans.

Question 4. Write short note on third party payment plans.
Answer. Following are the third party payment plans.

• Commercial Insurance Companies
• Non-Profit Health Service Cooperations.
  • Delta Plans
  • 90th Percentile
  • Blue Cross Blue Sheild Association
• Prepaid Group Practice.
• Capitation Plans

Commercial Insurance Companies

• Basic difference between the commercial insurance carriers and other is that commercial insurance carrier operates for profit.
• Commercial insurance companies compete successfully due to their expertise in promotion and marketing which allow them to present attractive total health package plans to the potential purchasers.
• These companies are more selective about the group which they choose to offer dental insurance.
• Insurance companies claim no obligation towards dental health of community.
• Such companies do not conduct fee audit and posttreatment dental examinations.
• They organize their levels of reimbursement in a different manner.
• These companies do not encourage the utilization of professional services.
• In order to make profit margin, they charge high premium to consumers.

Nonprofit Health Service Cooperation

• Delta plans: For delta plan refer to Ans 2 of the same chapter.
• 90th percentile: The percentile of a set of data which divides the total frequency into hundredths, so that the 90th percentile is the value below which 90% of observations lie. When payment is made at 90th percentile, 90% of all participating dentists receive their full fee for service. All participating dentists file their fee for particular treatment in given area. The fee varies from one dentist to another. So, majority of them got full fee at 90th percentile but few whose fee is less than 90th percentile will be paid less as their usual fee.
• Blue Cross Blue Shield Association: This is a federation of 38 separate health organizations and companies in United States. They either directly or indirectly provide insurance to 99 million Americans. They are non-profit organizations which for the years offer limited dental coverage as part of medical policy. Dental coverage was limited to services provided in the hospital.

Prepaid Group Practice

It is the term given to a group practice that provides dental services on a prepaid basis. Such groups are now generally regarded as open panels. Group practice is defined as “Group practice is that type of dental practice in which dentists, sometimes in association with the members of other health professions agree formally between themselves on certain central arrangements designed to provide efficient dental health service”. —ADA 1969

Types of Group Practice

• General practice groups composed entirely of general practitioners.
• Single specialty groups where all members of the group are of the same specialty.
• Multispecialty groups where certain practitioners in two or more special fields of practice.
• Payments by patients in majority of the group practice is the usual fee-for-service basis and a few larger group practices offer contracts to consumer group on a prepaid and capitation basis.

Advantages

The advantages for the dentist who practices in a group are:

• Organized lifestyle: Vacations and continuing education can be planned more readily because colleagues in the practice can temporarily care for a dentist’s patients during that time.
• Less disruption in the practice caused by illness to a dentist.
• Quality of care is said to be improved because of the built—in peer review.
• Financial fringe benefits, such as sick leave and pension plans can be built.
• Sharing of the personnel, equipment and other resources make group practice more economical.

Disadvantages

• It is very essential that dentist in a group should be temperamentally compatible.
• Dentists, unlike physicians should be taught to work independently and this lead to slow growth of dental group practice.

Capitation Plans

It is defined as “Dental benefit program in which a dentist contracts with a program sponsor or administrator to provide all or most of the dental services covered under a program to subscribers in return for a payment on a per capita basis”. —ADA

A capitation fee is usually a fixed monthly payment paid by a carrier to a dentist based on number of patients assigned to the dentist for treatment, regardless of whether the participant in the plan receives care or not.

Closed panel: It is defined as “Existing when patients eligible to receive benefits can receive them only if services are provided by dentists who have signed an agreement with the benefits plan” —ADA

• Only a small percentage of providers in an area are available to provide care under the plan.
• Private entrepreneurs are also involving in the marketing of capitation plans. So of them consists of an open enrolment which means that plan is not purchased by specific group but that an individual can buy in.
• Many of the plans offered consists of limited services i.e. examination, prophylaxis, radiographs and treatment plan which is more saleable to participating dentist as risk assumed is low.
• In regions where there is real or perceived oversupply of dentists such capitation plans are attractive to both purchaser and provider.

Question 5. Write in brief on mechanism of payment for dental care.
Answer. Mechanism by which dental practitioners receive payment for their services are grouped into:

• Private fee for service
• Post payment plans
• Private third party prepayment plans
  • Commercial insurance companies
  • Nonprofit health services cooperation
  • Prepaid group practice
  • Capitation plans.
• Salary.
• Public programs.

Private Fee for Service

Private fee for service, the two-party arrangement, is the traditional form at reimbursement for dental services. In this system patient takes an appointment and dentist suggests the appropriate treatment and informs the patient about his fee for the service. If the patient accepts the recommended treatment and receives the services of a dentist then he is responsible to pay the fee.

Postpayment Plans

Postpayment or budget payment plans were taken in the late 1930s by local dental societies in Pennsylvania and Michigan. They are the first step to offer this service through an organized dental society plan.

Under this plan, patient borrows money from a bank or finance company to pay the dentists fee. At the appointment when agreement to receive the care is made. After the application is approved by the bank entire fee is paid to the dentist. Patient than repays the loan in the budgeted amount to the lending institution.

Private Third Party Prepayment Plans

It is defined as “payment for services by some agency rather than directly by the beneficiary of those services”. The dentist and the patient are the first and second parties and the administrator of finances is the third party, defined as the party to a dental prepayment contract that may collect premiums, assume financial risk, pay claims and provide administrative services. The third party is also known as the carrier, insurer; underwriter or administrative agent. Usually the term ”third party” refers to a private carrier such as an insurance company,

Reimbursement of Dentists in Prepayment Plans

ADA has consistently supported the concept of usual, customary and reasonable (UCR) fee as the preferred method for reimbursement for dentists in prepayment plans. Apart from UCR fees, the only other form of payment plans is the table allowances.

• UCR fee: The fee usually charged for a given service by an individual dentist to private patients, i.e. dentist’s usual fee.
• Customary fee: When the fee is in the range of the usual fee charged by dentists of similar training and experience for the same service within the specific and limited geographic area.
• Reasonable fee: A fee is reasonable if it meets the above two criteria or if it is justifiable considering the special circumstances or the particular patient in question.
• Table of allowances: It is defined as a list of covered services that assigns to each service a sum that represents the total obligation of the plan with respect to payment for such service but that does not necessarily represent a dentist’s full fee for that service.

Salary

Dentists in some group practices, those in the armed forces and those employed by public agencies are salaried.

Dental Care Advantages

• An immediate reasonably good salary.
• Fringe benefits, such as health disability insurance and liability coverage.
• Retirement plan
• Paid vacation time
• Freedom from overhead costs and day-to-day worries of private practice.
• A chance to improve clinical experience and spee.

Dental Care Disadvantages

There is lack of finicial incentives.

Public Programs

Private practice is usually not able to meet the dental demands of all the people. There are therefore a number of public programs aimed at meeting the needs of specific groups or recipients in this diverse society. The public programs are sponsored by the government and also include community health centers.

Question 6. Write short note on delinquent accounts.
Answer. Delinquent account is defined as something which has been made payable and is overdue and unpaid and implies a previous opportunity to make payment.

• Failure to pay an obligation when due.
• Consumer instalment loans are normally considered delinquent if two consecutive payments are missed; an open-end credit account, such as a bank credit card, is often treated as a delinquent account if a payment is not received within the allowed 15–25 day grace period.
• A delinquent loan payment is subject to a late charge penalty and can be noted on the borrower’s credit report as a past due payment. Loans with more than two missing payments (60–90 days past due) are regarded as seriously delinquent and debt collection efforts are initiated to recover the amount due.

Question 7. Write briefly on health maintenance organization.
Answer. A health maintenance organization is defined as “a legal entity which provides a prescribed range of health services to each individual who has enrolled in the organization, in return for a prepaid, fixed and uniform payment”.

Principles of Health Maintenance Organization

The four principles which characterize health maintenance organization is

• An organized system of health care
• An agreed-upon set of comprehensive health maintenance and treatment services
• A voluntarily enrolled group of people in the geographical area
• Reimbursement

An Organized System

A health maintenance organization should be capable of bringing together directly or arranging the services of physicians and other health professionals along with the services of inpatient as well as outpatient facilities for preventive and other care as well as any other health services that a defined population may need reasonably. The system promises continuity for the enrolled population via linkages between components of an organization.

Comprehensive Health Maintenance and Treatment Services

• Health maintenance organization should be capable of giving or organizing the provision for health services which a population may need including primary care, emergency care, hospital care and rehabilitation.
• Primary care is considered to be one of the keystones of the health maintenance organization and emphasizes those services which are aimed to prevent the onset of illness or disability, maintenance of good health and continuing evaluation and management of early complaints, symptoms, problems and the chronic aspects of disease.
• Consumers as well as health maintenance organization agree over the point that which services will be purchased from the health maintenance organization in return for prepayment figure.

An Enrolled Group

• Members of health maintenance organization are the people who voluntarily join health maintenance organization via a contract in which the enrolled person agrees to pay the fixed monthly payment or other periodic payment to the health maintenance organization as their principal source of health care if they get ill or either need care.

Reimbursement

Health maintenance organization is a prepaid capitation system of financing medical services. Only a very small proportion of health maintenance organization endorses dental services.

Dental Personnel in health maintenance organization are:

• The staff model.
• The group model.
• The independent practice association
• The primary care capitated network or direct contract model.

The Staff Model

In this, dentists, dental hygienists and dental assistants are salaried employees of health maintenance organization.

The Group Model

• In this health maintenance organization contract directly with group practice, partnership or corporation for provision of the dental services.
• Group which is concerned receives a regular capitation premium from health maintenance organization.
• Payment to the individual dentists is not affected by the health maintenance organization contract.

The Independent Practice Association

It is an association of independent dentists or physicians which develops their own management and fiscal structure for treatment of patients who are enrolled in health maintenance organization. Independent practice association can also contract with other prepaid agencies i.e. Delta Plans, to provide dental services to specific groups over a capitation basis. The independent practice association receives its capitation premium from the health maintenance organization or any other prepayment agency and reimburses the individual dentists on either a modified fee-for—service basis or a capitation basis.

Primary Care Capitated Network

It is mostly like independent practice association, except that health maintenance organization contract directly with the individual provider for provision of service.

Question 8. Write short answer on 90th percentile.
Answer. Percentiles of the set of data divide the total frequency into hundredths so the 90th percentile is the value below which 90% of observations exist.

When payment is made at 90th percentile, 90% of the participating dentists will receive their full fee for their services and only 10% will be paid less than their usual fee. This method helps to control payment at end of the scale while paying the majority of their full fee.

For an instance, in a given area there are 50 participating dentists who have filed their fee for particular service. Fee filed will vary from one dentist to another. Now here fee charged vary from Rs 50 to Rs 150.

Ten dentists charge Rs 50, other 10 charge Rs 60, 20 of them charges Rs 70 or less and so on. There are few dentists who charge considerably higher for their service.

The 95th percentile is Rs 140 and 100th percentile is Rs 150. Median fee which is equivalent to 50th percentile is Rs 90. If payment is made a 90th percentile i.e. Rs 120, 90% of participating dentists receives their full fee for the service and only 10% of participating dentists would be less than their usual fee. In same manner, non-participating dentists are paid 50th percentile.