Discount dental plans.

Discount plans are yet another dental-coverage option. They're sometimes confused with dental insurance but fundamentally they're quite different.

How are discount plans set up?

The basis of this type of product is that the company who sells the plan has contracted with dentists (a "closed panel" network of participating dentists) who have agreed to discount their fees in exchange for patient referrals.

Unlike an insurance company (that assumes some financial risk), with this type of product the company selling the plan simply acts as a matchmaker, matching dentists with patients. (For this reason, these types of programs are sometimes called "referral" dental plans.)

How do these programs work?

Most referral/discount plans work in the following fashion.

• The member pays a (monthly/annual) membership fee. - These fees generally run around one or two hundred dollars per year, depending on whether the membership is for one individual or one individual family.
• The discount that the member receives is determined by the plan's fee schedule. - This fee schedule lists all covered dental procedures and the amount that the participating dentist is allowed to charge for each (as payment in full for services rendered). The member's discount is simply the difference between the plan's stipulated fee and the dentist's usual fee.

Notice that with this type of plan all financial transactions related to the patient's treatment are between them and the dentist. The company that has sold the plan is uninvolved.

What you should know about these programs.

If you are considering joining a discount/referral network, here are some of the points and considerations, both positive and negative, that you should keep in mind.

Advantages

Ease of use.

As opposed to dental insurance, utilizing a discount plan doesn't involve filing claim forms or forms for predetermination of benefits. In most cases there are no plan deductibles, benefit limitations, or wait-period restrictions.

Cosmetic dental services may be included.

Some discount dental plans provide allowances for cosmetic dental procedures such as bonding or veneers. (Make sure you've checked the plan's list of covered services before you join.)

Your dental program may come bundled with other discount plans.

Dental plans sometimes come bundled together with programs involving other health-related fields (vision, pharmacy, hearing, chiropractic).

Disadvantages / Concerns

While the following issue isn't necessarily a strong disadvantage of this type of plan, it is a point that you should be aware, and possible leery, of.

Why would a dentist participate in a discount plan?

The bulk of the financial risk associated with a discount program is placed on the participating dentist. In theory, they have agreed to do more work (accept the plan's referred patients) for less pay.

In the case where a number of new patients, each needing extensive dental work, have joined the program, the dentist will be obligated to perform an increased amount of discounted dental treatment. If so, how can the dentist survive financially?

It may be that this influx of new patients simply makes it possible for the dentist to fill up their empty appointment book, ramp up their productivity and reach an economy of scale that allows them to provide this discounted work while still maintaining a suitable profit margin.

Watch out of off-plan "upgrades."

In other cases, however, the financial loss associated with providing certain procedures might be motivation for the dentist to encourage patients to opt for off-plan "upgrades" or "add-ons," so to restore their profit margin.

By no means are we suggesting that this is the norm or to be expected. At the same time though, we do feel that it is important to point out that in those cases where a particular type of dental coverage seems "too good to be true" (such as too discounted, or too unlimited or unrestricted) that the dental patient should enter into the relationship with open eyes.

Plan features you'll need to evaluate.

You'll need to thoroughly evaluate the various discount networks you are considering. While each will no doubt be very similar, there will almost certainly be differences too.

As we looked through several of these dental plans, we noticed the following points that we felt some people might not grasp the importance of, or even overlook totally.

» Pick the right type of plan.

Plans tend to fall into one of two broad groups. Those that offer high savings on Preventive measures (cleanings, x-rays) and those who offer better discounts on Basic and Major dental procedures (fillings, root canals, crowns). Determine what type of services you expect to need during the term of the plan and purchase accordingly.

» Make sure that the plan's fee schedule includes the procedures that you require.

You need to know for certain that the types of dental treatments that you need are included in the fee schedule of the plan you are considering. (If you don't see a particular procedure listed in the plan's promotional materials, call the company and specifically ask them if it's included.)

With some plans, if a fee for a particular procedure is not found in its fee schedule, the patient still receives a discount. It's usually based on a flat percentage of the dentist's normal fee (such as 25% off). However, with other plans, if it's not listed it's not a discounted procedure and you will have to pay the dentist's full fee.

» Check for any non-standard or hidden fees that the dentist can charge.

• Make sure that the participating dentist must accept the discounted fee listed in the plan's fee schedule as payment in full.
• Certain procedures (such as crowns, bridges and full and partial dentures) involve dental laboratory expenses. Make sure that the discounted fee that the participating dentist is allowed to charge for these procedures includes this laboratory cost. If it is not included and must be paid by you, ask if there is a plan discount for this fee.
• Watch out for plans that allow outrageous charges. We've found one plan where the dentist was allowed to tack on a "sterilization" fee.

» Does the plan provide for the services of specialists?

Some of the dental procedures you need may require the services of a specialist. Check the plan's provider list to make sure that the kind you need is available in your area.

In some cases, a plan may discount specialist's fees differently than they do for general dentists. For example, sometimes the member's discount is a flat percentage of the specialist's normal charges (such as, 25% off the specialist's usual fee).

» Other fee schedule related considerations.

• Make sure that the fee schedule you see in the plan's promotional materials is the same one used in your area.
• It's possible that the fee that a specific participating dentist is allowed to charge is different than what your plan suggests (due to an individual contract that the dentist has entered into with the company selling the discount plan). If you know which dentist you plan to use, it would be best to contact them directly and inquire about plan specifics.

» Some discount/referral plans do contain exclusions.

Some discount programs have exclusions for some services. As an example, there may be exclusion of work currently in progress. Consider the following scenario.

While not a plan member you have root canal treatment initiated by a dentist who is a service provider for a plan. If you then join that plan (during the time frame during which your tooth is being treated), you will not qualify for a discount for that procedure.