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In-network / Contracted Insurance Plan (PPOs)

PPO stands for Preferred Provider Organization. Set up this type of Insurance Plan when you are contractually obligated to reduce your fees as an in-network provider. Because you are enrolled with the insurance company, you have access to a published list of fees that you must charge the patient. The insurance portion is calculated as a percentage of the published fee and the patient pays the rest.

There are two setup options: one tracks writeoffs, the other doesn't. Writeoffs are the difference between the contracted fee and the provider's UCR fees.

Notes:

  • If a patient has both primary and secondary insurance and you want benefit estimates to be more accurate, you must set both up as PPO Percentage (Option 1).
  • To set up a plan that has co-pays and makes supplemental payments (mixed capitation), see HMOs/DMOs with Supplemental Payments and Copays instead.

Option 1: Set up a PPO plan and track writeoffs
Set up an insurance plan with a PPO Percentage plan type and the carrier fee schedule. This plan tracks writeoffs.

On the Edit Insurance Plan window, select these options:

  • Plan Type:  PPO Percentage
  • Fee Schedule:  The carrier's fee schedule.

Insurance estimates will be based on the carrier's fee schedule.
Procedure fees will be based on the Provider's fee schedule.
Writeoffs are usually calculated using the following formula: UCR fees - PPO fee.  The difference between the two amounts will be an automatic writeoff.
Typically, if the PPO fee is higher than a provider's UCR fee, the PPO fees are used as the billed fees. To instead use the UCR fees, see Account Module Preferences.
You don't have to check the 'Claims show UCR fee, not billed fee' because the Provider's UCR fees already show on claims.
The correct insurance estimate (breakdowns) will show in the account after the claim is created.

Writeoffs are reported in Production and Income reports, Daily Writeoff Report, PPO Writeoffs Report, and Receivables Breakdown Report.

Option 2: Set up a Category Percentage plan and don't track writeoffs (not recommended)
This is a simpler approach for an in-network plan but doesn't track writeoffs. It is not recommended for a few reasons:

  • It does not work with ERAs (electronic EOBs).
  • If fee schedules are incorrect, patients will be billed incorrectly which could lead to lower collection rates.
  • At risk of not getting full reimbursement from insurance. Submitting the full office fee is the only way to get maximum reimbursement.
  • It is harder to manage and identify Insurance Overpayments.

Set up an insurance plan with a Category Percentage plan type and the carrier fee schedule. The carrier fees will be used instead of the provider's fees. One disadvantage is that patients will not see the provider's fees and may not be aware that a discount is being given.

On the Edit Insurance Plan window, select these options:

  • Plan Type: Category Percentage
  • Fee Schedule: The carrier's fee schedule.
  • (optional) To show the provider's fees on the insurance claim, check 'Claims show UCR fee, not billed fee'.


Patient Co-pays for Procedures
If the patient is required to co-pay for procedures, follow these steps.

  1. Create a co-pay Fee Schedule for the carrier.
  2. For each Procedure Code, enter the patient's co-pay amount. There can be just a few fees with the rest blank. If you only have the insurance co-pay fee schedule, not the patient co-pay amounts, use this equation to obtain the fee: Carrier Fee - Insurance Co-Pay = Patient Co-Pay.
  3. On the Edit Insurance Plan window set the following:
    • Fee Schedule: The carrier's normal fee schedule.
    • Patient Co-pay Amounts: The carrier's co-pay fee schedule.
  4. Benefit Information: Usually you will set all percentages to 100% so that everything above the co-pay is calculated as the insurance portion. If you do not set percentages to 100%, percentage calculations will be performed on the remaining amount.

 

PPOs with fee schedules that change after first year
These can be easily handled by using two insurance plans: one for preventive services, and one for basic services. These will need to be updated manually after the first year so that estimates etc. are monitored closely during the transition to the second year, when benefits will have to be updated in Open Dental.

 

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