Make UCR Work for You

When used in dentistry, UCR stands for “Usual, Customary and Reasonable.” This acronym is found on “Explanation of Benefits” EOB forms that dentists fill out to insurance companies for reimbursement. However, most dentists do not see the fairness in the “usual, customary and reasonable” amounts reimbursed. The fees to be reimbursed are predetermined by insurance companies aiming to control how much they spend on dental procedures. They have a list of how much each dental procedure should cost that determines the amount in benefits that your dental practice will receive in claims.

How are the fees applied?

Most policies have the following wordings to determine the amount payable

• The insurer will pay a certain percentage of the cost of the procedure. 
• Payment will be based on the UCR fee of the insurance company or the actual charges of the dentist. 
• Whichever amount is less

How insurance companies calculate dental procedure fees

Fees for every dental procedure are created by adding up all claims submitted for a particular service in a specific geographical location. After tabulation of the data, the fee is placed at a level to exceed a set percentage (usually 80% or 90%) of the total fees collected.

The method by which insurance companies calculate the fee schedule is not transparent as it is both arbitrary and self-serving. The fee’s implementation is, at most times, disadvantageous to the patient and the dental practice.

Calculating patient benefits concerning usual, customary, and reasonable fees

Let us take an example of a tooth refill where your insurance plan states that it caters for 50% of the charges.

The insurance company’s fees

The insurance company collects data from other dentists in the same geographical area who have performed tooth refills for other members under the same plan. From the data, they establish that 90% of the dentists charge $200 or less. The insurance company then sets its fee for dental refills at $200.

Scenario 1: Your dentist’s fees are less than the usual, customary, and reasonable fee

What happens if your dentists charge less than $200? Let’s say $150. In such a case, when determining how much you will receive in benefits for a tooth refill, they will pay 50% of $150, which is $75. You are then left to pay the remaining $75 from your pockets to clear the bill.

Scenario 2: Your dentist’s fees are less than the usual, customary, and reasonable fee

But what if the dentist charges more than the average dentist in the area, say $300? Here, dental insurance will still pay 50% of $300, which is $150. The remaining $150 will be paid out of your pocket to settle the bill. This is a significant difference in comparison to the first situation.

However, it is essential to note that if your dentist charges more than what your insurance company stipulates, it does not mean overcharging. This is because insurance companies rely on factors that create bias when calculating the fee limit. Insurance companies do not follow a set of guidelines when figuring their numbers.

It is evident that using these fees to settle claims for dental procedures is mostly advantageous to insurance companies. However, we should understand that insurance companies need to use a mechanism to regulate and control their expenses.

How does this affect dental fees?

In situations where a single company serves one geographical area, their usual, customary, and reasonable fee schedule affects the prices of dental services in the area.

Where a dentist charges more than the set usual, customary, and reasonable fees, they have no option but to lower their fees in line with the average charges in the area.

Consequently, when a dentist realizes that they charge less than what is set in their area of practice, the chances are that they will raise their fees.

How to make the Usual, Customary, and Reasonable fee work for you

To take advantage of the information above, recognize that exceeding the fee set by the insurance company does not translate that you are overcharging. It only means that your fees are just above what the insurance company has set as its percentile reimbursement level.

Keep track of your EOBs to establish the percentile each policy pays. For example, if you charge $60 for a service and you are paid in consideration of the $60, then your fees are too low or at least less than what is reimbursable at that percentile.

Also, find out about other group members’ plans. If you are all being paid in consideration of the same $60 in all the plans, this means that your percentile ranking is very low. If you only consider insurance reimbursement, you need to raise your dental procedure fees.

How do you avoid sudden out-of-pocket costs?

When you are planning to have a costly treatment procedure, ask beforehand how much you will be expected to cater for out of your pockets.

Pre-certification

This is proof from your insurance company that you are a member of the particular plan.

Pre-authorization

This is where you present your intended treatment plan to the insurer to affirm that the procedure is covered in their terms of your plan’s policy. Some insurance companies require this before you begin treatment; if you fail to obtain pre-authorization, you will not receive any reimbursements.

Verifying Benefits

This is a process that determines the amount of benefits payable for intended dental services. You can equate it to claiming your benefits before performing the dental procedure. It’s essential to state that verifying your benefits before a dental procedure is not an assurance that the whole amount stated will be paid. There is always some ‘fine print’ left out by insurance companies that affect the actual amount paid. However, the pre-treatment estimate is close to the exact amount; hence you should expect an amount close to the estimate. This is significant as it lets you know how much money you can expect to pay out of your pockets, thus be adequately prepared.