An Explanation of Third Party Payment for Dental Care

Adapted from Gordon J. Christensen, D.D.S., M.S.D., Ph.D., Diplomat, American Board of Prosthodontics

In recent years there has been a significant increase in managed dental health care in which insurance groups make contracts with local companies to provide dental care for specified fees and with numerous regulations and stipulations for patients. Your employer may decide to provide dental benefits to you using a managed care program. The following information will help you to understand the managed care concept and its advantages and disadvantages.

Other than paying for dentistry yourself without any involvement with insurance companies, there are several payment concepts currently popular:

PPO (Professional Provider Organization). These organizations offer dentistry at reduced rates as provided by specific practitioners

A dental benefit company (PPO) contracts with your employer to provide dental care for you. The dentists who participate in the PPO plan agree to treat you for reduced fees. They are called “preferred providers.” Many dentists do not participate in PPO’s because the reduced fees limit their ability to provide services at their usual level.

HMO (Health Maintenance Organization). These organizations offer minimal dentistry at low fees by specific practitioners.

A dental benefit company (HMO) makes a contract with your employer to provide overall dental care for you at very low fee levels. The dentist receives a few dollars per patient (capitation) per month to provide dental treatment, whether the patient is seen or not. Obviously, the dentist would rather not see the patient, and certainly would rather not do any expensive treatment. As in some PPO’s, if you elect to join a dental HMO, you must go to a dentist who is a provider for that plan.

Traditional Indemnity Dental Insurance Plans. These organizations offer standard dental treatment at normal fees with a choice of practitioners. Traditional indemnity insurance plans have been available for many years. They provide payment to dentists at fee levels which generally allow quality oral services to be provided. There are usually limits on the dollar amounts that can be utilized by a patient in a given year.

Nevertheless, with traditional fee for service and freedom of practitioner choice, indemnity dental insurance plans have provided excellent dental service for Americans for decades.

Direct Reimbursement. A newer form of payment called Direct Reimbursement (DR) can be obtained by your employer in which you have complete freedom of choice about practitioners and the quality level or type of service you want without major cost to your employer.