Buyers have a spectrum of choices; employers and employees can choose from among an assortment of dental plans according to their needs - Special Report - The Benefits of Managed Dental Care

Business & Health, Feb, 1994

The continuum of dental plans on the market today resembles the range of plans covering medical care. "Dental plan vendors come in various sizes and forms," says Benjamin L. Schechter, D.D.S., senior vice president of U.S. HMO Dental Consultants, Cleveland, specialists in managed dental care programs. Some are national or have multiple locations and offer a full range of medical and dental insurance products. Others, he notes, are local or regional and feature only dental plans. "The large companies now offer the buyer a variety of plans," Schechter says.

Employees today also have a range of choices. In many companies, they can choose from at least two dental options. As with medical coverage, they can select their own providers and pay higher out-of-pocket costs. Or they can use network dentists in return for more extensive and lower-cost coverage. Following are the most common types of dental plans being offered by employers today

Traditional indemnity plan

This type of plan is also known as the fee-for-service option. As with medical indemnity coverage, employees who have this type of insurance must first satisfy a deductible. Afterward, they receive reimbursement for a certain percentage of their dentists' fees, often up to a predetermined maximum amount.

Another indemnity payment method, known as the scheduled benefits plan, provides for reimbursement for specific dental services at pre-established rates. The insurer pays the dentist according to the predetermined payment schedule. The employee is responsible for any additional fees.

According to Don Mayes, D.D.S., president of Don Mayes & Associates, a dental benefits consulting firm in Hershey, Pa., a fairly typical fee-for-service plan would call for an annual deductible of $25 to $50 per person. Afterward, the plan would cover 80% to 100% of preventive or basic routine services, such as X-rays, check-ups, and fluoride treatments. The plan also would pay 80% of the cost of fillings, and possibly of crowns, as well as about 50% of the cost of dentures, bridgework, or other major dental work.

Many plans impose a maximum annual per-person benefit of $500 to $1,000, says Mayes. Policies on orthodontics also vary. Some plans impose strict limitations; others don't cover it at all.

Though fee-for service plans permit employees to choose any licensed dentists, such plans have less ability to manage cost and utilization and to maintain quality. However, there may be some claims review by a panel of dental consultants to ensure that the procedures performed were both appropriate and cost effective.

Preferred provider organization Like medical PPOs, dental PPOs are organized around providers who have agreed to accept reduced fees---typically 20% to 25% less than those fees paid to dentists in indemnity plans.

Dental PPOs actually are indemnity-structured plans in that they pay participating dentists on a fee-for-service basis. Network dentists may be required to take part in quality programs sponsored by the plan.

Employees enrolled in dental PPOs only receive full benefits when they use network dentists. They generally pay no deductibles or copayments for preventive services, and sometimes for basic services such as having cavities filled. PPO members are, however, usually responsible for a certain percentage of the cost of other services, such as crowns and bridgework.

In addition to requiring some copayments, dental PPOs require that patients submit claim forms and wait for reimbursement. PPO plans also may impose annual or--in the case of orthodontics-- lifetime caps on benefits.

Even though they require copayments and have certain limitations, dental PPOs can save employees at least 20% of the amount they would pay for care in a traditional indemnity plan, Mayes contends.

Employers, on the other hand, may not realize significant savings by signing with a dental PPO. The reason is that such a plan compensates dentists on the basis of the frequency and description of the services they deliver. In a dental PPO, dentists have no incentive to minimize the number of procedures that they perform.

Dental HMO

This type of plan is also called a prepaid or capitated plan. As with medical HMOs, employees select from a panel of providers. They usually do not receive any benefits if they use a dentist who is not part of the HMO's network.

The plan pays network dentists on the basis of how many plan participants select them as their providers. Dentists usually receive a fixed amount each month, regardless of whether or not participants receive dental care. Dentists who belong to good plans also must agree to participate in extensive quality management programs.

Dental HMOs often cover 100% of preventive and diagnostic services, such as examinations, X-rays, cleanings, and fluoride applications. Some, times, however, copayments may apply. Fillings, root canal procedures, and oral surgery are generally covered, also with possible copays.

Most plans cover crowns at varying copayment levels. Copayments are common for dentures, bridgework, and orthodontics. Annual or lifetime caps are rarely part of dental HMO limitations.