Module 8 - Managing Dental Benefits

Question 1

Identify services generally provided under government-sponsored dental programs.

Answer 1

All provinces and territories cover surgical-dental services, which the Canada Health Act (CHA) defines as any medically or dentally required procedures performed by a dentist in a hospital, where a hospital is required to properly perform the procedure. These services generally include:

(a) Oral and maxillary facial surgery

(b) Routine extraction services provided for cardiac patients, transplant patients, immune-compromised patients and radiation patients, when these patients are undergoing active treatment in a hospital setting and the attendant medical procedure requires the removal of teeth

(c) All precancerous or cancerous dental surgical biopsies.

Question 2

Explain why dental benefits are an integral component of a group benefits plan.

Answer 2

With the exception of surgical-dental services covered under the CHA and some government-sponsored plans for certain eligible groups (e.g., military personnel, seniors, children), any other dental expenses incurred are the financial responsibility of the individual. As a result, dental benefits are an integral component of a group benefits plan.

Question 3

Explain the significance of IT-339R2, Meaning of “private health services plan” (PHSP) for group dental plan design

Answer 3

To receive favourable tax treatment, group dental plans must qualify as PHSPs under the Income Tax Act as outlined in IT-339R2. Therefore, the dental plan design must reflect certain basic elements. It must:

(a) Be an undertaking of one person

(b) Indemnify another person

(c) Be for an agreed consideration

(d) Be from a loss or liability in respect of an event, the happening of which is uncertain.

Question 4

Compare and contrast the nature of group dental coverage with group health care coverage.

Answer 4

Group dental coverage places a greater emphasis on preventive care than group health care does. While individuals typically see a physician only when they have specific symptoms, many routinely visit their dentist for preventive dental care. Unlike with health care, individuals may seek dental services for cosmetic reasons (e.g., a crown may be necessary to save a tooth but may also be used to improve a patient’s appearance). Many people place orthodontics in the same category.

In many cases, there is more time to explore treatment options for dental care needs than there is for health care needs. Also, individuals have more control over the timing of the services they obtain—If there is no immediate pain or discomfort, they may defer treatment. Because most dental care needs are not life threatening and treatment usually is not time-critical, major courses of treatment are often discussed in advance of treatment.

There may be more treatment options available for dental care, and many alternative procedures for restoring teeth are equally effective. For example, to treat a molar cavity, a dentist may use a filling or a crown. In these instances, the choice of procedure depends on many factors, including the cost of alternatives, the condition and position of the affected teeth, the condition of surrounding teeth and the likelihood of the procedure’s success.

Group extended health care plans primarily provide protection against financial hardship associated with an unforeseen medical condition. In contrast, group dental plans cover services that are mostly predictable, short-term and not catastrophic. Therefore, it is often easier for plan members to budget for dental services than for health care services.

Question 5

Identify group characteristics that can affect dental plan utilization

Answer 5

Age: Utilization tends to be highest among adolescents and lowest among seniors.

Sex: Females tend to have slightly higher utilization rates than males.

Income level: Dental care expenditures per participant are higher for members of families with higher incomes. Generally, the higher the income, the greater the likelihood the individual already has an established dental hygiene program. In many cases, there is greater access to dental care in high-income neighbourhoods. Higher income individuals are more likely to choose higher cost procedures.

Location: The availability of dentists, practice patterns and fees varies considerably by region.

Question 6

Identify the types of dental care providers whose services are covered under most group dental plans.

Answer 6

Group dental plans cover most procedures performed or prescribed by a licensed dentist, denturist or hygienist, defined by most group plans as follows:

(a) A dentist is a legally qualified dentist practicing within the scope of their license to perform the particular dental services rendered

(b) A denturist is defined as one licensed to practice denture therapy

(c) A dental hygienist is a licensed dental professional who specializes in preventive oral health, typically focusing on techniques in oral hygiene.

Question 7

Explain how dental care providers can influence plan utilization and plan costs.

Answer 7

Dental care providers can influence plan utilization and plan costs in various ways.
A general focus on improved dental health, increasingly advanced diagnostic technology and treatment options, and the inherent financial incentive in a fee-for-service pricing structure may lead some dentists to provide more aggressive treatment options than necessary or to propose more frequent preventive services (such as scaling) than required for the maintenance of good oral health.

Question 8

List dental services typically categorized as basic services in group dental plans

Answer 8

Dental services typically categorized as basic services include:

(a) Recall services, including recall examinations, bitewing x-rays, light scaling/cleaning, polishing and topical fluoride treatment

(b) Complete, emergency or specific examinations to evaluate patient’s condition and determine future treatment

(c) X-rays, including panoramic x-rays and radiographs to diagnose or examine progress

(d) Diagnostic tests and lab exams

(e) Removal of teeth, including impacted teeth and related anesthesia

(f) Space maintainers for primary teeth

(g) Pit and fissure sealants

(h) Fillings, including amalgam (silver), composite (white) and acrylic (replaced by composite)

(i) Prefabricated metal restorations/crowns and repairs (not custom made)

(j) Surgery and related anesthesia

(k) Endodontics (root canal therapy/fillings, treatment of disease of pulp tissue)

(l) Periodontics (treatment of the tissues and bones supporting the teeth), including root planing/deep scaling, scaling, occlusal equilibration/adjustment (shave teeth with bad bite), treatment of temporomandibular joint dysfunction (TMJ) and bruxism (grinding of teeth).

Question 9

List dental services typically categorized as major restorative services in group dental plans.

Answer 9

Dental services typically categorized as major restorative services include:

(a) Prosthodontic services and appliances to replace missing teeth and structures with removable artificial appliances

(b) Porcelain crowns, inlays and onlays

(c) Dentures and nonremovable artificial appliances, such as bridgework and crowns

(d) Repair of dentures, rebase or reline dentures, bridges and dentures (prosthodontics).

Question 10

Identify dental services typically categorized as orthodontic services in group dental plans.

Answer 10

Dental services typically categorized as orthodontic services are procedures required to prevent and correct dental and oral irregularities, defects of the jaw and dental habits by correcting the spacing of teeth, i.e., braces.

Question 11

Explain the impact of dental fee guides on fee amounts charged by dentists.

Answer 11

There is no formal requirement for dental professionals to adopt dental fee guides; however, dentists can use the information to assess whether the amounts they charge patients are reasonable and fair (for both dentist and patient) compared with the amounts their own dental associations suggest. In reality, almost all dentists follow the fee guides because insurers generally use these guides as the basis for determining reasonable and customary charges on a procedure-by-procedure basis and a provincial/territorial basis. Reasonable and customary charges are the maximum allowable amount an insurer will reimburse for a particular service.

Question 12

Outline the procedure coding system used by most dental associations to establish their fee guides.

Answer 12

The provincial/territorial fee guides identify a specific price for a given procedure, following the Canadian Dental Association (CDA) procedure coding system. CDA’s Uniform System of Coding and List of Services (USC&LS) is a terminological standard that provides descriptions and codes to represent oral health services. Its two main purposes are to support the production of fee guides and to support the processing of dental claims. All provincial/territorial dental associations except Quebec’s draw from this system to establish their fee guides. A general practitioners’ fee guide covers most services. In addition, some dental associations also issue a fee guide for specialists, such as orthodontists or dental surgeons. On average, specialists’ fees are higher than general practitioners’ fees for the same procedure. The provincial/territorial dental associations’ fee guides are updated annually.

Question 13

Describe the USC&LS classifications.

Answer 13

The USC&LS classification is organized around ten categories, each of which is subdivided into classes, sub-classes and general service titles to facilitate the identification of the appropriate code to represent a service. The categories are:

(a) 00000 Diagnostic

(b) 10000 Prevention

(c) 20000 Restoration

(d) 30000 Endodontics

(e) 40000 Periodontics

(f) 50000 Prosthodontics—removable

(g) 60000 Prosthodontics—fixed

(h) 70000 Oral maxillofacial surgery

(i) 80000 Orthodontics

(j) 90000 General services

The code series identifies the category of service by the digit position:

(a) First digit identifies the category of services

(b) Second digit identifies classification of service

(c) Third digit identifies subclassification

(d) Fourth digit identifies the service

(e) Fifth digit identifies the units of time required.

Units of time in certain codes are periods of 15 minutes or less, with half units of 7.5 minutes for some services. Codes may change from time to time. Dental associations may provide both full and abbreviated fee guides.

Question 14

Identify fee guide options that insurers might offer to plan sponsors of dental plans.

Answer 14

The plan sponsor decides which fee guide applies to its benefits plan. Insurers offer plan sponsors several fee guide options, including:

(a) Current year with reimbursement automatically updated annually as new fee guides are released. This is the most common approach.

(b) Lag-year fee guide with reimbursement in a given year that lags behind current fee guides, typically by one or two years

(c) Fixed-year fee guide with reimbursement amounts static until the plan sponsor chooses to amend the basis (e.g., to a stated year).

Question 15

Explain why nonmandatory dental plans are more susceptible to adverse selection than other types of benefits coverage provided in group plans.

Answer 15

Group dental plans that are nonmandatory, especially where plan member contributions are required, are more vulnerable to adverse selection than other types of group plan coverage. The unique characteristics of dental care needs (e.g., the emphasis on preventive care, range of treatment options and the time to explore treatment options) can contribute to the tendency for individuals to apply for coverage based on likelihood of loss.

Nonmandatory participation can also lead to “late entrants.” Late entrants are individuals who did not enroll when initially eligible and later requested to join the plan or who withdrew from the plan and later requested reinstatement. In dental plans, late application often occurs when an individual discovers that they (or a dependent) require dental treatment that will cost more than the required premium contribution amount. Requiring mandatory (100%) participation is a common way for plan sponsors to avoid the possibility of adverse selection associated with late entrants.

Question 16

Explain how the maximum amount of eligible expense for a given dental procedure is usually determine

Answer 16

Generally, the maximum amount of eligible expense for a given dental procedure is the amount listed in the suggested fee guide (chosen by the plan sponsor) for general practitioners for the applicable year.

Plan sponsors with plan members located across Canada use the fee guides of the various jurisdictions where the services are performed. Some dental plans reimburse based on a specialist fee guide (e.g., for periodontists).

If the fee guide does not list a fee for a covered procedure under a group plan, the insurer determines the benefit amount payable based on the “reasonable and customary charge” for the procedure in that location.

Question 17

Define calendar year maximum, individual lifetime maximum and late entrant maximum.

Answer 17

A calendar year maximum limits the amount a benefits plan pays for basic and major restorative services per covered individual in a calendar year. Maximums for each individual typically range from $1,000 to $3,000 and can be applied either separately to each category of services or, more frequently, on a combined basis (e.g., a $2,000 calendar-year maximum for basic and major restorative services combined). A small number of plans may have higher maximums or unlimited coverage for basic services.

An individual lifetime maximum limits reimbursement for a course of treatment in a lifetime. Orthodontic services usually have a separate per individual lifetime maximum, generally ranging from $1,000 to $3,000 but sometimes as high as $6,000.

A late entrant maximum may apply to some or all categories of services if an individual applies for coverage in a nonmandatory plan more than 31 days after becoming eligible. For example, there may be a reduced benefit amount for basic and major restorative services in year one and a reduced amount for orthodontic services in the first three years.

Question 18

Identify frequency limitations that may be included in group dental plans.

Answer 18

Frequency limitations restrict the number of services or the number of units of service that the plan pays for. A plan may limit recall exams and the services associated with routine checkups, cleaning, scaling and bitewing x-rays as part of the recall exam to once every five months to a maximum of twice per year, once every nine months or once every calendar year. A plan may limit complete exams including a complete series of x-rays and one panoramic image to once every 36 months. Scaling may be limited to a specific number of 15-minute units of time in a particular time frame, e.g., between eight and 12 units per year.

Question 19

Describe major restorative services replacement limitations that may be included in group dental plans.

Answer 19

As major restorative services are expensive, dental plans often impose limits reflecting a reasonable replacement frequency of specific prosthodontics. Plans typically replace dentures, crowns or bridgework only in certain circumstances
(e.g., if necessary tooth extractions rendered the original prosthodontics unserviceable, the original is at least five years old, the original is damaged and cannot be repaired, or replacement is required because of an injury to the tooth or restoration). Plans normally cover replacement of temporary dentures with permanent dentures only if completed within a specified period, such as one year. Most plans exclude replacement of lost, misplaced or stolen appliances.

Question 20

Outline age limitations that may be included in group dental plans.

Answer 20

Age limits may apply to various plan services. Plans may provide recall exams twice a year for children but once a year for those over the age of 19. Plans may also limit topical application of fluoride to dependent children under a specified age, again typically under the age of 19. These limits are based on studies that show that these dental care procedures are most appropriate for certain age groups. While orthodontic services may be offered to all plan members and dependents, many plans limit orthodontic treatment to dependent children under a specified age, typically under age 19.

Question 21

Describe typical coinsurance levels that may be included in group dental plans.

Answer 21

Most dental plans are structured to encourage plan members to seek regular preventive care, as this helps minimize the need for extensive treatments such as root canals, crowns and bridgework. Plan members typically share a greater portion of the cost of major restorative dental treatment (crowns and bridgework) and orthodontic treatment than they do for routine preventive care. Therefore, coinsurance provisions vary by type of dental service. The coinsurance level is higher, i.e., the reimbursement level is higher for basic services than for major restorative or orthodontics. Most plan sponsors pay between 80% and 100% of the cost of basic services, 50% to 80% for major services and 50% to 60% for orthodontic services.

Question 22

Explain the predetermination of benefits provision in group dental plans.

Answer 22

Most dental plans include a predetermination (or preauthorization) provision that applies to procedures expected to cost more than a predetermined amount (e.g., $500). Prior to commencing the work, the dental care provider submits a pretreatment form describing the recommended treatment and the estimated costs. Evidence supporting the need for treatment (e.g., x-rays and study models) may also be submitted. The insurer (or third-party administrator) reviews, assesses and validates the necessity of the proposed dental treatment before the procedures are performed. Then it advises the plan member how much the plan will cover and explains the reasons for denying coverage of any proposed procedures or charges.

Authorization for treatment is usually valid for a specified period (e.g., up to 90 days). The amount payable when the actual treatment takes place is subject to the plan provisions as of the date of service. This means that if coverage, benefits limits or coinsurance change after the treatment plan is approved but before treatment takes place, the benefits payable reflect these changes.

Question 23

Explain the purpose of the alternative benefit provision (ABP) in group dental plans.

Answer 23

Under an ABP, a plan covers expenses up to the usual charge for the least expensive treatment option that will produce a professionally adequate result. The ABP does not require the insured individual to choose the less costly treatment. However, if the insured individual and dentist choose the more expensive treatment, the insured person is responsible for the additional charges beyond those the ABP allows.

Question 24

Describe the continuation of benefits to surviving dependents of a deceased plan member under group dental coverage.

Answer 24

Some group contracts allow dental care coverage to continue for a member’s dependents after the plan member’s death. Plans can extend survivor benefits, with or without premium payment, for a specified period beyond the death of the plan member, typically up to a maximum of two years. To qualify for continuation of coverage, dependents must continue to satisfy the definition of dependent in the group contract. If the spouse remarries, coverage for the spouse terminates, while coverage is maintained for dependent children who continue to meet the definition of a dependent.

Question 25

Outline typical exclusions found in group dental plans.

Answer 25

Dental plans typically contain many of the same exclusions as extended health care plans. Dental plans do not cover the following items and services:

(a) Services or supplies primarily for cosmetic purposes unless required due to an accident that occurred while a plan member or dependent had coverage under the plan

(b) Services or supplies not provided by legally qualified dentists or denturists acting within the scope of their licenses except x-rays a dentist orders from these individuals and services or supplies a dental hygienist furnishes under the supervision of a dentist

(c) Services or supplies required as a result of an accidental injury to natural teeth and fully covered under an extended health care plan

(d) Experimental dental treatment

(e) Replacement of lost or stolen prosthodontic artificial appliances and devices such as dentures (Plans also do not normally cover duplicate appliances.)

(f) Certain services relating to treatment that began before the effective date of coverage (E.g., plans will not cover implanting teeth to replace existing partial bridgework if the implant replaces a tooth removed before the individual had coverage under the plan.)

(g) Any services or supplies for which there would have been no charge in the absence of coverage

(h) Any services or supplies covered by any government-sponsored benefits program, such as workers’ compensation (WC)

(i) Dental exams required by a third party

(j) Miscellaneous items such as travel, counselling, communication costs, missed appointments and the completion of forms

(k) Services or supplies provided to personalize or characterize dentures

(l) Protective sport appliances (e.g., mouth guards)

(m) Services required for a full mouth reconstruction or vertical dimension correction

(n) Services or supplies resulting from intentional self-inflicted injury; voluntary participation in a war, insurrection or riot; or a criminal act performed by the covered individual.

Question 26

Contrast the use of deductibles to the use of coinsurance as a cost-containment approach in group dental plans.

Answer 26

In dental plans, the use of coinsurance is more prevalent than the use of deductibles. Some people argue that deductibles do not effectively manage plan costs because utilization varies among covered individuals. For example, assume two plan members (with no dependents) in a plan with 100% coinsurance are subject to the same deductible ($25); one goes to the dentist once a year for a recall examination, while the other goes every three months for deep scaling. The second plan member costs the plan sponsor more, and there is no ongoing cost sharing from that plan member once the initial deductible is satisfied. Because there is no ongoing cost sharing, this plan member is not deterred from higher utilization. Note that changing the coinsurance to anything less than 100% addresses the ongoing cost-sharing issue.

Unlike deductibles, coinsurance provisions keep up with inflation and the costs of increased utilization. As dental expenses increase, so does the plan member’s contribution to the costs.

Question 27

List traditional cost-containment measures, other than lowering coinsurance levels or introducing/increasing deductibles, that can be used in group dental plans.

Answer 27

Traditional cost-containment measures include:

(a) Limiting coverage for certain services within an overall dental treatment cost (e.g., limit reimbursement of lab fees to 50% of total dental procedure costs)

(b) Limiting the frequency of various routine procedures

(c) Limiting the frequency of emergency exams. If the limit were exceeded, the claim would be referred to the dental consultant to determine if it was truly an emergency exam.

(d) Limiting the number of units of scaling covered under the plan

(e) Limiting claims reimbursement to a fixed fee guide or lag-year fee guide

(f) Educating plan members about the plan to enable them to be better dental care consumers.

In addition to these traditional methods, costs are increasingly being managed by:

(a) Completing dental claims audits

(b) Monitoring utilization of component costs, such as lab fees, material costs and other outside professional services not included in the dentist’s fee

(c) Monitoring variances in treatment patterns among dentists.

Question 28

Explain how dental plan audits can assist plan sponsors whose dental plan costs are increasing significantly from year to year

Answer 28

If the cost of a dental plan increases significantly from year to year, a dental claims audit can provide insight into the cause of the increases. An audit may review, for example, adherence to member/dependent eligibility, therapeutic choice, procedure code eligibility and cost-containment measures. It also reviews policy provisions for inconsistencies, especially between any list of covered procedure codes and plan exclusions (e.g., cosmetic services). An audit can also verify application of an alternative benefit provision (ABP) to ensure that, for any major recommended procedure such as inlays, surgery or major prosthetic work, the claim administrator’s internal dental consultant reviewed the proposed treatment plan in advance.

Question 29

Identify the unique provisions in a group dental plan compared to group extended health care (EHC) plans that require special claims considerations.

Answer 29

Plan provisions found in dental plans that aren’t in EHC include predetermination, treatment plans, alternative benefit provisions and assignment of benefits.

Question 30

Identify the documentation required when filing a claim for routine dental procedures in group dental plans.

Answer 30

The claim administrator must receive written proof of loss/expense within 12 to 18 months after the date the expense was incurred and within the time period specified after the date on which coverage for a plan member terminates (ranges from no later than three to 12 months after the date a plan member’s coverage terminates). For routine dental procedures performed within Canada, the claims administrator must receive a completed claims submission (either paper or electronic, in a form approved by the Canadian or provincial/territorial dental association) and written evidence of:

(a) The treatment provided, along with the appropriate procedure code(s)

(b) The dentist or qualified practitioner who provided treatment

(c) The date on which treatment was provided.

Question 31

Describe assignment of benefits in group dental plans.

Answer 31

Some dentists and plan sponsors permit the assignment of benefits, in which case the plan member authorizes the claims administrator to remit payment directly to the dentist. Assignment of benefits is convenient for plan members because they do not have to pay the dentist up-front and then file a claim for reimbursement. Some dental associations discourage this practice. Their premise is that “nonassignment” dental plans require patients to be actively involved in paying for their dental care and that participating financially in their oral health care encourages them to use their dental plan wisely, thereby reducing overall plan costs.

Question 32

Describe electronic claims adjudication and its advantages.

Answer 32

Most dental claims are electronically adjudicated. Under the electronic data interchange (EDI) system, claims information is transmitted electronically at the point of service between the dentist and the claims administrator. It is not necessary to complete a paper form. The transmission alerts the claims administrator to verify coverage under the dental plan while the covered individual waits for confirmation of the amount covered. This system eliminates redundant data entry for the dentist since staff have to enter claims data only once. After that, the system automatically fills in the data each time a claim is sent. It also saves time for the claims administrator, as it does not have to reenter the claims data. Electronic adjudication can accommodate assignment of benefits to the dentist.

Most dental offices are also connected to CDAnet, an electronic network developed by the Canadian Dental Association (CDA). Information compiled from the data that dental associations exchange and collect is used to produce statistical analyses and update fee guides.

Question 33

Explain how group size influences the method of funding a group dental plan.

Answer 33

Smaller groups (e.g., up to 150 lives) are usually insured under a nonrefund accounting arrangement (either fully pooled or prospectively rated). The claims experience of these groups is not predictable. With such a small spread of risk, they are not suitable for risk sharing and/or for self-insurance, from either the plan sponsor’s or the insurer’s point of view.

For midsized groups (e.g., 150 to 500 lives), the plan sponsor and insurer are more likely to accept some form of risk sharing under a refund accounting arrangement, or the plan sponsor may self-insure under an administrative services only (ASO) arrangement.

With a sufficient spread of risk and more predictable claim experience results, larger groups (e.g., 500 lives and over) may be insured on a refund accounting basis or be self-insured, usually with an ASO arrangement.

Pooling is not required for refund accounted or self-insured plans due to the limits in place in dental plans.

Question 34

Describe how plan members are taxed on group dental plan premiums and benefits.

Answer 34

With the exception of Quebec, dental premiums paid by the plan sponsor are not taxable to the plan member. In all jurisdictions, benefits are not taxable to the plan member regardless of whether the plan sponsor or the plan member pays the premium.