Objectve: The purpose of this handout is to have all Financial Advisors
be aware of the terminology associated with commercial dental
insurance. All Financial Advisors (FA’s) will be expected to know these
terms and be familiar with how to interact with dental insurance
DEDUCTIBLE - is the amount the patient is responsible for before the insurance considers the treatment for payment. The deductible usually only applies to Basic and Major services, but there are Ames where it can apply to Diagnostic/ preventive services. There, at times, may be a separate deductible for these services.
ASSIGNMENT OF BENEFITS - is a clause in an insurance policy that allows the insured person to direct the payment by the carrier directly to the provider/ office
ANNIVERSARY YEAR - is a 12 -month period beginning on the date insurance becomes effective. (Also see “Benefit Year” OR “ Calendar Year”)
BENEFIT YEAR - can be the same as an anniversary year. It is the 12 -month benefit period that begins on the date the insurance becomes effective or possibly the plan year.
CALENDAR YEAR - is from January 1st to December 31st.
MAXIMUM ALLOWANCE/ BENEFIT - is the maximum amount a policy will pay toward the cost of services.
BENEFIT - is the amount that is payable by the third party toward the covered services of the plan.
SUBSCRIBER - is the person that carries the insurance plan. (Also known as the Insured)
INSURED - is the person that carries the policy.
MEMBER - is an individual who is enrolled in an orthodontic benefit program. CLAIMANT - is the person that files the claim to receive benefits.
CONTRACT DENTIST - is a doctor that agrees contractually with an insurance company to provide services under certain conditions, terms, and reimbursement arrangements. The dentist is contracted with the insurance company to accept the insurance fees. Similar to Participating Dentist.
PARTICIPATING DENTIST - is a dentist that has a contractual agreement with an insurance company or organization to provide care to eligible persons.
EXPIRATION DATE - is the date on which the benefits will expire.
EXPLANATION OF BENEFITS - is a written statement of the covered and non-covered charges and the benefits of the plan.
BIRTHDAY RULE - is a rule that applies to a child who is covered by the insurance plans of both parents, the parent whose birthday falls first in the calendar year is the insurance that is billed first and is considered the primary insurance.
COORDINATION OF BENEFITS - is when there is coverage by more than one insurance plan. The birthday rule applies by which the policy with the insured’s birthday falling the earliest during the calendar year is billed first, and then the other policy is applied to the balance. Benefit payments cannot exceed 100%.
CAFETERIA PLAN - is an employee benefit plan that allows employees to choose insurance coverage and other fringe benefits. Also known as a Flex Plan. (Also see “Flexible Benefits”)
FLEXIBLE BENEFITS - the plan is an employer plan that gives an employee a choice of various benefit options, such as childcare, insurance, etc. (Also see Cafeteria Plan).
INDEMNITY PLAN - is a plan where the third-party payer provides payment of an amount for specific services regardless of the actual charges made by the orthodontist.
LIMITATIONS - are the restrictive conditions of an insurance policy, which affect an individual coverage as it is stated in the benefits contract.
PREAUTHORIZATION - is the procedure whereby the insured (or sometimes the dental office) must obtain a written statement that services will be covered under the plan prior to beginning treatment. This is done by submitting a dental insurance claim but submitting it as a predetermination as opposed to an actual claim (See Prior Authorization)
PREDETERMINATION - is an administrative procedure that may require the doctor to send a treatment plan to the insurance company or organization prior to beginning treatment. (See preauthorization
PRIOR AUTHORIZATION - is an administrative procedure of verifying that services incurred will be covered. (See Preauthorization)
PRE-CERTIFICATION / VERIFICATION - this is a confirmation that the patient is eligible or covered under the program.
REIMBURSEMENT - is the payment of services. The payment can be made by the third -party (insurance company) directly to the dentist for his services on behalf of the beneficiary or paid to the beneficiary to repay expenses for a service covered.
FEE SCHEDULE - is a present amount established by the insurance company that the doctor will receive for a specific procedure; that is all they will pay regardless of the doctor’s customary fee.
USUAL FEE - refers to the usual fee that the doctor charges. The Customary refers to the customary fee that the doctor charged in the same range as other doctors with the same treatment. The Reasonable refers to a modified fee due to exceptional circumstances.
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