PPO Insurance Calculations

Below is an explanation of the math behind write-offs, covered amounts, insurance estimates, and patient portion for PPO Insurance Plan.

Sample fees:

- Office Fee = $150
- PPO Fee = $127
- Deductible = $50
- Covered Percentage = 80%

**Write-off**: The difference between the office fee and contracted PPO fee.

Office Fee - PPO Fee = Write-off

$150 - $127 = $23

**Covered Amount**: Subtract the deductible from the PPO fee (before applying the covered percentage).

PPO Fee - Deductible = Covered Amount

$127 - $50 = $77

Note: If there is a procedure copay, Covered Amount = PPO Fee - (Deductible + Copay)

**Insurance Estimate**: Apply the covered percentage to the covered amount.

Covered Amount x Covered Percentage = Insurance Estimate

$77 x 80% = $61.60

**Patient Portion**: Subtract the insurance estimate amount and write-off from the office fee.

Office Fee - Write-off - Insurance Estimate = Patient Portion

$150 - $23 - $61.60 = $65.40

**Verify**: To verify the estimates are correct, add the write-off, insurance estimate, and patient portion. This will equal the office fee.

Write-off + Insurance Estimate + Patient Portion = Office Fee

23 + 61.60 + 65.40 = 150

In this example we will explain the math behind a two surface downgrade. For posterior composites, most companies still base their payment calculations on the corresponding amalgam code for the same number of surfaces.

Sample Fees

- Office Fee for D2392 = $150
- PPO Fee for D2392 (composite) = $127
- PPO Fee for D2150 (amalgam) = $100
- Deductible = $50
- Covered Percentage = 80%

**Write-off**: The billed code is always used for the PPO fee, so for a downgrade it uses the PPO fee for D2392 (composite). This is the last time the D2392 PPO fee is used.

Office Fee - PPO Fee = Write-off

$150 - $127 = $23

**Covered Amount**: Subtract the deductible from the PPO Fee for D2150 (amalgam),

PPO Fee - Deductible = Covered Amount

$100 - $50 = $50

Note: If there is a procedure copay, Covered Amount = Substitution Code PPO Fee - (Deductible + Copay)

**Insurance Estimate**: Apply the covered percentage to the covered amount.

Covered Amount x Covered Percentage = Insurance Estimate

$50 x 80% = $40

**Patient Portion**: Subtract the insurance estimate amount and write-off from the office fee.

Office Fee - Writeoff - Insurance Pay = Patient Portion

$150 - $23 - $40 = $87

**Verify**: To verify the estimates are correct, add the write-off, insurance estimate, and patient portion. This will equal the office fee.

Write-off + Insurance Estimate + Patient Portion = Office Fee

23 + 40 + 87 = 150

For more information about downgrades, see Estimate Downgrades.