Usual and Customary
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One way dental insurance companies limit their liability is to limit
the amount of a dentist's fee that they will accept. This limit has been
called the "usual and customary" fee. Their contract stipulates that the
company will pay a certain percentage, say 50% or 80% of the "usual and
customary" charges for a particular procedure.
Setting such a "usual and customary" charge is reasonable for an insurance
plan to do. Medical, homeowners, and auto insurance all have similar
provisions. The company has to protect itself against possible price
gouging. It can't guarantee payment no matter what service providers
charge.
Historically, the "customary" fee has been arrived at through the use of
surveys, and the insurance contract would specify, for example, that they
would reimburse at the "80th percentile" level. This means that if 100
dentists were surveyed, and for a certain type of filling, say, 80 of the
dentists charged $150 or less, and the other 20 charged more than $150,
the company would allow the fee of $150 for that filling.
Ethical codes were also established that said that the dentist would have
to charge the same fee for this procedure for every patient. So, if they
allowed a fee of $150, but the dentist's usual fee was $120, then that is
the fee that would have to appear on the statement sent to the company.
This is the foundation of the concept of the "usual" fee.
However, as time as gone on, and with the competition between insurance
companies and the pressure put on them by employers to hold down the costs
of policies, some companies have modified the definition of the
"customary" fee. Contracts were modified and some removed the concept of
taking a survey, and made the "customary" fee to be whatever they wanted
it to be. Other companies have kept the survey concept and have simply
become slow in updating those surveys. As dental costs escalated in the
90s from more stringent sterilization standards and dental employee safety
standards, some insurance companies were just slow to update their
surveys, which helped them hold down costs.
What's the bottom line for you as a dental patient? You should just be
aware of some of the games that may be going on. If your dentist needs to
know whether or not you have insurance before they know what the fee is
going to be, be aware that they may be trying to manipulate the system. If
your dental insurance company tries to accuse your dentist of charging
fees that are too high, in that situation they're the ones who are being
unethical. An honest response when their reimbursement doesn't cover the
entire fee is a simple statement to that effect: "This fee is beyond the
level of the allowed benefit." Anything accusatory in tone from them is
considered unethical, and should be reported to authorities. Such
communications by dental insurance companies are often an attempt to cover
for a plan with limited benefits that was sold to your employer as a
"cost-cutting" plan.
This information is provided for you by the mynewsmile.com
cosmetic
dentist referral service, and was personally written by Dr. David Hall.
