Dental billing overview: what every dentist needs to know

Dental Billing 101: Patient Billing, Insurance Verification, and Insurance Billing

Effective dental billing encompasses several interconnected processes—patient billing, insurance verification, and insurance billing (claims management)—that are essential to maintaining cash flow and ensuring the financial health of your practice. Together, these processes form the foundation of dental revenue cycle management (RCM), which ensures that services provided translate into collected revenue.

Table of Contents

1. Dental Insurance Overview
2. The Essentials of Insurance Verification
3. Dental claims management
4. Understanding Insurance Billing
5. The Basics of Patient Billing
6. Conclusion

Dental Insurance Overview

Dental insurance operates on a cost-sharing model where patients pay a monthly premium, and in return, the insurance provider contributes to the cost of dental care. The insurance company's contribution is determined by the policy's specific terms, including deductibles, copayments, and coverage limits. After a dental procedure, the provider submits a claim to the insurance company, which reviews it based on supporting documentation, provider status, and the patient's benefits and coverage limits. Any remaining balance not covered by insurance becomes the patient's responsibility.

Navigating dental insurance can be challenging due to the variety of plans and coverage options per plan, as well as per provider network status. 

Network Status and Its Importance

Dental insurance plans categorize providers based on their network status, which impacts reimbursement rates and patient costs.

• In-Network Providers: Dentists contracted with the insurance company to offer services at discounted rates.
• Out of Network Providers: Dentists not contracted with the insurer, but registered with insurance companies they are submitting claims to for out of network reimbursement. 

Major Types of Dental Insurance and Why They Matter

• Preferred Provider Organization (PPO) - Offers flexibility for patients to visit any provider, though in-network providers offer reduced fees. Understanding PPO plans helps practices set appropriate fee schedules and minimize write-offs.
• Health Maintenance Organization (HMO) - Requires patients to visit specific in-network providers. Knowing HMO rules is critical to prevent out-of-network claim denials.
• Medicaid and Government Programs - Vary by state and require thorough verification and compliance with regulations. Practices must stay updated with evolving state guidelines to maintain compliance and reimbursement accuracy.

Key Dental Insurance Terms

• Explanation of Benefits (EOB): A statement from the insurance company detailing what has been covered.
• Pre-Authorization: Approval from the insurer before certain procedures, more common with Medicaid and government programs. This is not the same as a pre-determination.
• Pre-determination: Voluntarily sent by the provider to obtain coverage assurance for treatment planned procedures. Offices should remember that even if approved - this is never a guarantee of payment. 
• Coordination of Benefits (COB): Determines primary vs. secondary insurance responsibility.
• Annual Maximum: The maximum amount an insurance plan will pay in a given year.
• Deductible: The amount the patient needs to pay before insurance coverage begins.
• Fee Schedule: A list of the maximum fees an insurance company will reimburse for specific procedures.
• Write-Off: The difference between the practice's fee and the insurance company's allowed amount that cannot be billed to the patient for contracted providers. 

Credentialing and Tax ID Considerations

Credentialing ensures that the dental provider is recognized by insurance carriers, allowing them to submit claims and receive reimbursement. Regardless of network status - any insurance company that an office will submit claims to must have the location, and provider demographics on file in order to process claims. The registration and credentialing process may vary depending on network status, and the insurance company, but essentially key steps include:

• Submitting accurate provider details, including National Provider Identifier (NPI) and Tax Identification Number (TIN).
• Registering Tax IDs with insurance carriers to prevent claim rejections and payment delays.
• Regularly updating credentialing records to maintain active status with insurance carriers.
• Reviewing fee schedules and contracts to ensure accurate claim processing and reimbursement.

The Essentials of Insurance Verification

Insurance verification is the first step in the insurance billing process and is crucial to ensuring timely payments and minimizing claim denials.

Key Steps in Insurance Verification

1. Collect Insurance Details: Obtain provider name, policy number, and coverage specifics from patients at least 48 hours in advance of non emergent appointments.  
2. Verify Coverage: Contact the insurer to confirm eligibility, covered services, and benefit limitations.
3. Document Information: Maintain thorough records in your practice management software for future reference.

Understanding Claims Management

Claims management is a critical part of the dental billing process, ensuring that the practice is reimbursed for services provided. Proper claims handling reduces delays, increases revenue, and minimizes rejections.

Process of Claims Submission

1. Accurate Coding: Use of correct CDT codes that reflect the provided treatment.
2. Claim Preparation: Gathering all required documentation, including treatment notes and supporting images.
3. Submission Methods: Claims can be submitted electronically or via paper, with electronic submissions offering faster processing.
4. Timely Filing: Submitting claims within the insurer’s required timeframe to avoid denials based on late submission.

Common Claim Denials and Resolutions

Claims may be denied for several reasons, including:

• Incorrect or Missing Information: Ensure accurate patient details, insurance policy numbers, and treatment codes are provided.
• Coverage Limitations: Verifying benefits before treatment can prevent issues related to non-covered services.
• Coordination of Benefits (COB) Issues: Proper documentation of primary and secondary insurance to avoid processing errors.
• Duplicate Claims: Avoid resubmitting claims without confirming the insurer’s processing status.

Appeals and Resubmissions

When claims are denied, it is crucial to have a structured appeals process:

1. Analyze the Denial Reason: Review the Explanation of Benefits (EOB) to understand why the claim was denied.
2. Prepare Appeal Documentation: Include necessary corrections, additional supporting documents, and a written appeal letter.
3. Follow Up Promptly: Maintain communication with the insurance company to track appeal status.
4. Track and Record: Keep detailed records of appeals and outcomes to improve future claim accuracy.

The Basics of Patient Billing

Patient billing is the process of collecting payments from patients for services rendered. Effective patient billing practices are critical to maintaining a steady cash flow and improving patient satisfaction.

Key Components of Patient Billing

• Treatment Estimates: Providing patients with an estimate of their costs before treatment.
• Payment Plans: Offering flexible payment options to accommodate different financial situations.
• Billing Statements: Sending clear and concise invoices outlining charges, payments, and outstanding balances.
• Financial Policies: Establishing clear financial policies to set patient expectations and reduce confusion.

Payment Collection Strategies

• Point-of-Service Collections: Collecting payments at the time of service to reduce outstanding balances.
• Online Payment Portals: Allowing patients to make payments conveniently online.
• Automated Payment Reminders: Sending reminders via email or text to encourage timely payments.
• Staff Training: Equipping front-office staff with the skills to discuss financial responsibilities confidently with patients.

Conclusion

Dental billing is a complex but essential component of practice management. By understanding the intricacies of patient billing, insurance verification, and claims management, dental practices can enhance efficiency and ensure financial stability. Leveraging technology and maintaining up-to-date credentialing with insurance providers further strengthens your revenue cycle management. Taking a proactive approach to dental billing helps practices provide quality care without financial setbacks. Many practices are overwhelmed with the basic steps outlined here - let alone have time to get into the details. If you find this to be your situation - Wisdom can help. Use the link below to get in touch.

Need more insight before you reach out? Tune into the Dental Billing 101 podcast hosted by Dr. Bicuspid, featuring our own chief dental billing officer, Ashley Bond.