group Chpt 35 Dental Claim Costs

Question 1

Dental claims cost drivers

The plan

Answer 1

1. Covered benefits and cost sharing provisions
   
   1. 1 highly discretionary nature of dental service
   2. 2 cost sharing provisions are significant drivers of claim cost
   3. 3 encouraging preventive care is cost effective
   4. 4 deductible
   5. 5 Coinsurance and copays
   6. 6 maximum limits
   7. 7 interaction with existing group medical plan
2. Waiting periods
3. Period of coverage (trend and leveraging)

Question 2

DT Claim Cost Drivers

Network and Care Management

Answer 2

1. Provider Reimbursement Levels
   
   1. 1 Fee-for-Service
   2. 1.1 Advantages and disadvantages
   3. 1.2 UCR or RC (Reasonable and Customary)
   4. 1.3 Composite fee systems
   5. 2 PPO Networks
   6. 3 Scheduled plans
   7. 4 Capitation
2. Discount Cards
3. Care Management

Question 3

DT Claim cost data sources

Answer 3

1. If credible, carrier’s own historic data the best experience base
2. Databases which contain fee level information:
3. Milliman Dental Cost Guidelines
4. DOI filings of other carriers
5. Data Quality (ASOP no 23)
   
   5. 1 Appropriateness of data for its intended use;
   6. 2 Reasonableness and comprehensiveness;
   7. 3 Limitations or assumptions needed to use data
   8. 4 cost and feasibility of alternatives
   9. 5 sampling methods used to collect the data

Question 4

DT claim cost drivers

The insured’s

Answer 4

1. Age and Gender - costs vary significantly on age and gender of patient
2. Geographic Area - costs of dental services vary significantly by area
3. Group size: small groups claim costs>larger groups for same benefit plan
4. No prior coverage and pre-announcement - utilization expected to be high
5. Employee turnover. Claim costs higher among groups with higher turnover
6. Occupation or income
7. Participation. Groups that do not have 100% participation generate higher claims

Question 5

Affordable care act (ACA) impact on dental

Answer 5

1. Pediatric oral services included in the definition of essential benefits
2. Allowed dental benefits to be offered through state exchange
3. Ability to purchase benefits from exchange pose anti-selection risk and member loss risk for dental insurers’ group business

Question 6

Dental Anti-selection Consideration

Answer 6

1. Controls
   
   1. 1 Tiered Coinsurance and Max benefits vary by year of coverage
   2. 2 Elimination (or waiting) periods
   3. 3 Participation requirements
2. Multiple Option Settings
   
   • those likely to use more services choose a richer plan

Question 7

Difference for dental comparing to experience rating for medical

Answer 7

1. Similar process
2. Dental insurance more reliable than medical at the same size due to narrow range between min and max annual claims
3. Even a sizable group may require manual adjustments if they have higher turnover, low participation, or plan design change making past experience less reliable
4. Large claims analysis and pooling not a part of experience rating

Question 8

UCR vs RC fee schedule

Answer 8

Usual, customary and reasonable

1. Requires dentists to pre-file their rates for approval
2. Max fee schedule is lower of
   a. Provider’s usual fee
   b. Customary fee schedule in geographic area
   c. Reasonable fee based on circumstances
3. High inflation, since doc sets a=b
4. May permit provider to “balance bill” patient.

RC fee schedule:
Max equals to lower of: a. A high percentile of national fee, b. High percentile of locally charged fees