Understanding and avoiding copayment waivers
Copayment waiver is when a dentist enters a fee on a claim that includes a copayment that the dentist never intends to collect, which makes the reported fee artificially higher than the dentist's actual fee charged. This causes the dental carrier to cover the patient's share of the fee. Copayment waivers are a form of overbilling the dental carrier.
Example: If a dentist reports a fee for a service as $100, we calculate our payment based on the patient’s dental benefits contract and, for this example, pay $80 (80 percent benefit, with 20 percent patient copayment). If the dentist makes no effort to collect the remaining $20 from the patient, then the dentist’s actual fee for the service is $80, not $100. And Delta Dental has overpaid – we’ve paid 100 percent of $80 instead of 80 percent of $80.
Waiving copayments violates the contracted dentist’s participation agreement with Delta Dental as well as the patient’s dental benefits contract. This can jeopardize the stability of the patient’s dental coverage by driving up costs, because we assume the overbilled fee to be accurate and then base our premiums on inflated dental costs. When premiums increase, groups may consider dropping dental benefits altogether. Delta Dental may also terminate the dentist’s participation agreement if a dentist regularly waives patient copayments.
To avoid overbilling, always make reasonable efforts to collect patient coinsurance/copayments. Reasonable efforts include:
- Payment plans: Making arrangements with patients for monthly payments, for example, or offering the option to pay by credit card.
- Billing statements: Mailing monthly reminders of the balance and the minimum amount due.
- Collections: Forwarding large, uncollectable balances to a professional collection agency.
- Discontinuing the relationship with a patient who will not make reasonable efforts to pay his or her portion.