Advertising, Discounts & Copayments

“I read the article by Erin Raden in Inscriptions, “Dental Practice Act Summary of Changes” in September 2008. From what I understand, if I provide a discount or fee reduction as a courtesy or promotion, I might need to change the way I submit insurance claims when I’m contracted with an insurance company as a participating provider. What is your take, and your recommendation?”

First, let’s get the disclaimer out of the way: I am not an attorney, and any information provided in this article is not meant to deliver legal advice.

>>WHEW<< Glad that’s done! Now, down to business.

I’m very familiar with the article, and thanks Erin for bringing these changes to our attention. Sad truth is that most dentists aren’t as familiar as they should be with the laws governing the profession. Since her article was written, I’ve casually surveyed dentists as recently as early March at the Western Regional Dental Convention and found that an overwhelming majority was surprised to know about the changes. Specifically, Section 191 Definitions, regarding “Irregularities in Billing”; take a look from Erin’s Summary (I’ve underlined some of the words for reference later in this article):

“Irregularities in Billing” defines the submitting of any claim, bills, or government assistance claim to any patient, responsible party, or third party payor for dental services rendered that is materially false with the intent to receive unearned income and as evidenced by any of the following:

• (a) Charges for services not rendered.
• (b) Any treatment date that does not accurately reflect the date when the service and procedures were actually completed.
• (c) Any description of a dental service or procedure that does not actually reflect the actual work completed.
• (d) Any charge for a service or procedure that cannot be clinically justified or determined to be necessary.
• (e) Any statement that is material to the claim and that the licensee knows is false or misleading.
• (f) An abrogation of the co-payment provisions of a dental insurance contract by a waiver of all or part of the co-payment from the patient if this results in an excessive or fraudulent charge to a third party or if the waiver is used as an enticement to receive dental services from that provider. This subdivision does not interfere with the contractual relationship between a third party payor and a licensee or a business entity registered with the board.

 

These changes to the Dental Practice Act regarding “Irregularities in Billing” impact Arizona dentists in several ways, and I’d like to point out a few that are important when it comes to advertising, discounts, and abrogating, or forgiving, the co-payment. As I indicated in the first part of this article with words that were underlined and in bold print, one cannot submit an insurance claim that is materially false with the intent to fraudulently receive unearned income.

The first few sub-paragraphs, (a) through (e) are specific enough so as not to be confusing, I trust. Just a quick example will help shed light on the subject matter of these first few items.

A patient arrives at the office in mid-December with four upper anterior teeth that are to be treated with full coverage crowns. Due to the yearly maximum benefit, the patient may ask that the dentist restore two teeth prior to the first of the year, and the other two after the first of the year. The dentist may recommend that in order to match the teeth with the proper shade and provide the best possible treatment, all four teeth should be restored at the same time. Treatment proceeds, all four teeth are prepared, and in an attempt to help the patient financially, the treatment for two teeth are billed to the insurance company at the preparation date prior to the end of the year, and the treatment for the other two teeth are billed on the seat date after the first of the year.

This is an obvious billing irregularity, as the insurance claim forms submitted do not reflect the treatment provided and the fees charged on the dates of service.

Now, let’s deal with the real meaty stuff in sub-paragraph (f). “Abrogating”, or waiving, all or part of the co-payment while under contract with an insurance company, and submitting a materially false claim with the intent to fraudulently receive unearned income will get a dentist into trouble.

Delta Dental of Arizona provides examples of non-compliance with their Participating Dentist Agreement to be:

• Misrepresentation of dates of service, services performed or fees changed on a claim form submitted to Delta Dental
• Misrepresentation of usual, customary and reasonable prefiled or charged fees on a confidential fee listing form
• Waiver of part of all of applicable contract copayments and deductibles
• Discounting of fees – agreeing to schedules lower than the dentist’s filed fees with Delta
• Dental (submitting full fees on claims to Delta Dental)
• Other activities involving claim forms or fee data which results in inaccurate information being submitted to Delta Dental which can cause actual or potential detriment to Delta Dental or a Delta Dental subscriber

Delta goes on to further inform dentists that they must indicate any discounts given to the patient clearly on the face of the claim form or in the notes field of the electronic claim. The discount must be applied so that the net fee submitted to Delta and the net fee charged to the patient are both reduced. The dentist may offer patients discount coupons for services or procedures. However, the claims submitted must reflect the discounted fees. Regularly offering discounts or coupons can affect the usual fee. Failure to disclose discounts or the use of coupons is one of the unacceptable billing practices reviewed during the claim verification process. Failure to disclose discounts or coupons can result in overpayments that are recoverable. If a claim form is intentionally submitted without disclosed discounts or coupon use, it can be considered a fraudulent attempt to gain overpayment of benefits.

An example given by Delta Dental on how to disclose patient discounts on claim forms is this:

Suppose your usual fee for a complete maxillary denture is $1000, but you offer a patient a $100 discount. There are two ways to indicate the discount on the claim form. You must use one of the following:

1. State the discounted amount of $900 in the box 31 fee section.
2. State your usual fee of $1000 in the box 31 fee section and use the Remarks Section to identify the discount amount of $100.

The Arizona Department of Insurance was a great resource of information regarding these issues and Insurance Fraud. Yes, Insurance Fraud is a crime, a class six felony that can mean 10 years in jail and a maximum fine of $150,000.

A person who commits either of the following “with the intent to injure, defraud, or deceive an insurance company,” is guilty of a felony. The most common types of insurance fraud include claim fraud, premium fraud, and vender (or provider) fraud. Incomplete or inaccurate information on a claim form or application does not necessarily represent insurance fraud. For insurance fraud to exist, four key elements need to be present:

1. Intent to defraud: The person(s) must intentionally and deliberately deceive the insurer(s).
2. Knowledge: The person(s) must have knowledge that what they are doing is wrong, or is a false statement of fact.
3. Misrepresentation: The person(s) creates or assists in making a false impression that leads the insurer to pay a claim.
4. Reliance: The insurer would not have paid the claim but for the misrepresentation.

Let’s jump back into the day-to-day operations of the dental office. Here are three examples to show what this all means:

Example #1: Pre-Payment Courtesy or Discount
My proven payment program, “Proactive Payment Systems” routinely recommends a pre-payment courtesy, or discount, for payment made in advance on major treatment. Let’s consider a patient who accepts treatment for several units of crown and bridge that total $3000. A pre-payment courtesy of 5% would provide $150 in savings to the patient if paid for in advance. Once the treatment is provided, normally, the insurance claim form is generated electronically with little effort and sent to the insurance company for payment. But Wait! You’re a Delta Dental contracted provider! Was that claim submitted to Delta Dental with the proper notation and fees regarding the discount? If you are to provide a discount as in this example to your patients, as a Delta Dental Provider, the claim must be submitted with notes indicating the discount provided; easy fix!

Example #2: {Direct Mail Piece} “New Patient Exam, Bite-Wing X-rays, and Examination - $49. Regular value, $155!”
(Note: There is no indication on the advertising piece that this is only available for cash paying patients; insurance patients are not specifically excluded.)

In this example, yes you are a Delta Dental provider, the patient arrives at the office for their new patient visit, and yes, they have Delta Dental insurance. The fee of $49 is paid, and the insurance claim form is submitted. OOPS! Was the claim submitted with the proper notation and fees regarding the discount?

Example #3: Professional Courtesy
In this example, you are not a contracted participating provider with any insurance company and a friend of yours, Bill, arrives at the office for his new patient examination, complete x-rays, and since Bill is healthy without any signs of periodontal disease, he has his teeth cleaned. For whatever reason, you elect to provide Bill a Professional Courtesy by reducing the fee $35 from the usual $235 to an even $200. Bill pays by credit card, bids you farewell, and off he goes. Are you in compliance? Yes. You provided services, charged a fee, and you received payment. The contract in this case is with the insurance company and the employer or patient, not the dentist. You are not obligated to submit a claim form; you may as a courtesy to Bill, and in fact would enter your usual fee for services rendered on the claim. Since you are not contracted with the insurance company, you may process payment from Bill and submit the claim normally. If you accept assignment of benefits, process the claim according to your normal and correct billing procedures.

A heartfelt dentist can have the patient’s best interest in mind, and on occasion, be pulled by their purse strings, yet acts of kindness could cause the practice to falter without knowledge of the laws that govern the profession.

If you contractually participate with an insurance company, read the contract! If you can’t find the contract in your office, call the Provider Relations contact at the insurance company, request your signed copy, and start a file. The ADA provides, as a member service, Contract Analysis. Contact AzDA here in Arizona for more information.

What is very important to note is that waiving or abrogating the co-payment is a non-issue if a dentist does not contractually participate with any insurance company. Yes, they must follow proper billing protocols; that goes without saying. But discounts, professional courtesies, are all in line when a dentist is not under contract.

Staying on top of everything that occurs in a dental practice’s day-to-day operations is time consuming. Fulfilling the professional responsibility to keep abreast of the legal parameters of the profession, unfortunately, is not always accomplished. By that I mean dentists stay current on procedures, materials, and techniques to keep patients in the highest level of oral health. As a result, the business side of dentistry often suffers. In that respect, dentists may not be aware of changes to the laws that govern their profession. From my experience, it’s not intentional, it just happens – for whatever reason.

Further, the Arizona Board of Dental Examiners, in particular Dr. Sam Palmer, indicated to me that an overwhelming majority, well over 95%, of complaints from people to the Board about dentists is not treatment based per se, but communications based; people don’t feel like they were taken care of properly as a person. Yes, this includes the ways in which billing and account administration is handled. The treatment provided is often not the basis of the initial complaint.

Generally speaking, most dentists and their staff do an excellent job of taking care of people, healing their dental conditions, billing properly, and creating a loyal following of patients in the community that refer other people for care. Some dentists are not as competent in their profession at taking care of people, and for this reason the laws are established to protect the public from harm.

Be proactive by staying in tune and be aware of changes to the laws that govern the dental profession. Make your team aware of the ways that could put the practice in harms way by incorrectly billing when contractually participating with an insurance company.

For more information, go to www.azleg.state.az.us/arizonarevisedstatutes.asp.