Understanding dental insurance downgrades, and communicating them to patients
Dentists base treatment recommendations on each patient’s unique oral health needs, so why would patients choose an insurance-driven treatment over their dentist’s advice?
The answer most often lies in cost, with out-of-pocket expenses leading some patients to believe treatment options with the highest dental insurance reimbursement equate to being the most optimal, or even mandated choice.
Helping patients understand their treatment options and choose care that aligns with their health needs is just as crucial as understanding alternate benefits and their financial impact.
Dental clinicians excel at explaining the clinical need for a recommended treatment, but when it comes to an insurance-preferred alternate treatment that costs less, conveying the “why” can be more challenging.
Here you’ll find an explanation of dental insurance downgrades and alternate benefits, guidance on calculating downgrade fillings, and a look at insurance alternatives and breakdowns.
What is an alternate benefit?
A downgrade, also known as an "alternate benefit," occurs when a dental insurance plan chooses to cover the least expensive procedure they consider acceptable among multiple treatment options.
Patients can still opt for their preferred treatment, but selecting a treatment option that is downgraded by insurance often results in higher out-of-pocket expenses.
Common examples of insurance downgrades
Downgrades apply to a range of procedures. One of the most common examples is the "posterior composite downgrade".
For example, if a composite filling on a back tooth is recommended, but the insurance company downgrades it to only cover an amalgam filling, the patient will likely owe the cost difference.
To break it down further, consider a patient with a 100/80/50 insurance plan, where fillings are covered at 80%. If a composite filling costs $100 and an amalgam filling $80, the insurance will cover 80% of the amalgam fee rather than the composite fee, leaving the patient to pay the difference.
Some additional, frequently occurring examples are:
- Inlays, onlays, and crowns downgraded to composite or amalgam fillings
- Bridges and implants downgraded to removable prosthetics
- Periodontal procedures downgraded to lower-level periodontal codes
- Ceramic or porcelain crowns downgraded to metal crowns
Be vigilant when reviewing any explanation of benefits (EOB) reporting a downgraded procedure.
Dental insurance companies sometimes use "downgrade" language for a procedure that they have essentially denied due to lack of supporting documentation, and leverage a downgrade to a different procedure code versus denying the procedure altogether.
This is most common with crown to filling downgrades.
These scenarios can likely be appealed, unless the plan specifically states crowns are not covered and will be downgraded to fillings at all times.
Downgrades add complexity to dental coding — but switching between dental and medical billing follows a different set of rules that every office should be prepared for.
How to calculate downgrade fillings and out-of-pocket costs
When a dental insurance plan downgrades a recommended procedure, patients may pay the difference. To calculate downgrade fillings, determine the cost of the original procedure and the downgraded one. Multiply the downgraded cost by the insurance coverage, then subtract that from the original fee to find the out-of-pocket expense.
For example, if a composite filling costs $100 and insurance covers an $80 amalgam filling at 80%, the insurance pays $64, and the patient pays the remaining $36.
Tips for explaining dental insurance downgrades to patients
Understanding how to calculate downgrade fillings and communicate alternate benefit dental options is crucial for minimizing patient confusion.
Clearly explain why the insurance covers a less expensive option, provide a dental insurance breakdown, and show patients their out-of-pocket responsibility.
Use straightforward language and illustrative examples to explain treatment options and insurance impacts.
Exploring dental insurance alternatives
Patients who face additional out-of-pocket costs due to a downgraded dental procedure can benefit from exploring dental insurance alternatives.
Options include dental discount plans, which lower fees for common procedures, membership plans offered by dental offices that cover routine care, and alternative dental insurance policies that may include coverage not fully supported by traditional plans.
Dental Discount Plans
Dental discount plans offer reduced rates on procedures like fillings, crowns, and cleanings for an annual fee. They usually have no waiting periods, deductibles, or annual maximums, making them simple and cost-effective for routine care.
Membership Plans
In-house membership plans from dental offices give discounted rates on preventive and restorative care. They are ideal for patients who want consistent care from a specific provider without the limits of traditional insurance.
Alternative Dental Insurance
Alternative dental insurance provides broader coverage than discount or membership plans, often including major procedures and orthodontics with higher annual maximums. These plans suit individuals or families who need more comprehensive dental care.
Learn more about working with Wisdom, a leading dental insurance company in the US, so you can hand over the headaches of insurance billing and downgrades, and focus on your patients first.
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Five common questions about downgrades
We get asked about downgrades a lot. Here are the 5 most common questions that we see, and the answers:
1. Can patients be charged the difference for a downgrade?
Yes. Patients are responsible for the cost difference if they choose a treatment that insurance covers at a lower rate.
The only exception would be if state law disallows this. If you are unsure, use this ADA by State resource to find contact information for your state dental association, and reach out to them accordingly.
2. Are insurance companies authorized to downgrade procedures for out-of-network providers?
Yes. Whether or not a patient's plan downgrades procedures is based on the plan itself, not the network status of the provider. Pertaining to downgrades, network status only dictates the highest allowable amount overall, it does not dictate how the procedure code will be covered.
3. How should practices prepare for being informed about downgrades before treatment, and treatment planning?
Insurance verification can help manage patient expectations and reduce surprises when patients see their bill.
Obtaining downgrade information by plan is essential.
4. How do I calculate the out-of-pocket expense for a downgraded procedure?
Most practice management software systems allow for adjusting payment tables to reflect these variations, so ask your software vendor for guidance if needed.
For those that don't, you can calculate the cost manually for an estimate.
To calculate, take these steps:
- Determine the original fee for the procedure code to be completed
- Determine the fee for the procedure code the treatment will be downgraded to
- Calculate the insurance payment by multiplying the downgraded fee by the patient's insurance percentage
- Calculate the patient's responsibility by subtracting the insurance payment from the original fee
5. How can I help patients understand why a downgrade should not affect their treatment choice?
To address downgrades effectively, explain that insurance policies often prioritize cost over clinical effectiveness, covering only the least costly option.
Emphasize that your recommended treatment is based on the patient’s health needs, with better long-term outcomes in mind, rather than insurer cost-saving measures.
Clear, simple explanations help patients see that while the insurance may cover a lower-cost option, it may not offer the same health benefits as the recommended treatment.
Managing downgrades in dental insurance requires informed communication, patient-centered explanations, and a thorough understanding of insurance benefits.
With a proactive approach, dental practices can help patients make the best decisions for their health—beyond what insurance plans may dictate.
