The difference between "noncovered services" and "disallowed services"
Journal of the Michigan Dental Association (May 2018)
Question: I have heard quite a bit lately about issues with dental plans. Sometimes audits are conducted and refunds are sought other times there are different contract issues. Some dentists use the term “noncovered services” others refer to “disallowed services”. Are they the same thing? If not, what is the difference?
Answer: These terms may be used interchangeably by some but should not be. They describe are used to describe different situations. Each situation has a different consequence for the dentist involved.
Noncovered services refers to services that were once covered by the patient’s dental plan but are not currently covered due to the plan’s limitations. For example, the plan may contain a limit on the number of cleanings, x-rays, crowns, etc. that are covered each plan year, there may be a maximum dollar amount (per family, per family member or both) the plan will pay each plan year that has been reached, there may be maximums the plan will cover for particular procedures (e.g. $1500 per plan year for orthodontics) that have been met, etc. The issue with noncovered services typically is whether the dentist’s contract with the dental plan applies when these noncovered services are provided (i.e. can the dentist only bill the fee schedule amount or is the dentist free to bill a higher amount, does the dentist have to file a claim form with the dental plan, etc.). If the dental plan is insured or administered by Delta Dental the answer is that the contract applies to noncovered services, the same as it does to covered services. For other dental insurers and dental plans you have contracted with you must review the contract and make this determination.
You must distinguish these noncovered services that were once covered but currently are not from noncovered services that were never covered by the dental plan. For example, if the patient’s dental plan does not cover any cosmetic procedures, sleep apnea services, etc. these services are also not covered but the dentist’s contract with the patient’s dental plan would not apply to them (i.e. the dentist is free to charge any fee, does not have to file a claim form, etc.).
The disallowed services scenario is different. A disallowed service is a service a dentist recommends to a patient that is on the list of services covered by the patient’s dental plan but the dental plan has determined should not be provided to the patient because doing so would not be in accordance with the standard of practice. When Delta Dental determines a service is disallowed it includes the following on its Explanation of Benefits form that goes to both the patient and the dentist:
“AP12104 – Benefits for this procedure are being disallowed because the treatment/material does not meet generally accepted standards of dental practice.
AP 14939 – Consultant review has disallowed this procedure based on the information received. Fee may not be charged to the patient if the dentist participates with Delta Dental.”
Unlike the noncovered services situation where the issue is whether a fee schedule and other contractual provisions apply, the disallowed services scenario results in: (1) a disagreement between the dental plan and the dentist over whether the service to be provided is within the standard of dental practice; and (2) you not being able to bill and collect at all for the service.
Whether and to what extent other insurers and dental plans treat disallowed services the same way will, again, depend on the terms of your contract.
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Daniel J. Schulte has more than 20 years experience representing small business owners in all aspects of transactional, operational and regulatory legal matters. A Certified Public Accountant as well as an attorney, Dan is the firm's managing partner and chair of the Health Care Practice Group.
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