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The Basics of Myth-Busting Practice Management

Medical Benefits for Dental Procedures

So tell me, what is the best way to make money in today’s economy? My father, Tom Limoli DDS (1924-2006), jokingly commented that if you wanted loyal patrons at the door each morning as well as disappointed customers when you were closed in the evening – that business was not a dental office but rather a liquor store. As politically incorrect as well as darkly insensitive his self-humorous observations were at the time, he was not far from the truth.

You see, in any type or retail establishment where widgets are marketed and sold, we face two separate and very distinct realities. These are “Cost of Goods Sold” and “Return on Investment.”

COGS – Cost of goods sold is the accumulated total of all costs used to create a product or service, which has been sold. These costs fall into the general sub-categories of direct labor, materials, and overhead. In a service business, the cost of goods sold is considered to be the labor, payroll taxes, and benefits of those people who generate billable hours (though the term may be changed to “cost of services”).

ROI – Return on investment, or ROI, is the most common profitability ratio. There are several ways to determine ROI, but the most frequently used method is to divide net profit by total assets. So if your net profit is $100,000 and your total assets are $300,000, your ROI would be .33 or 33 percent.

If dentistry merely involved the redistribution of previously manufactured widgets, we would have to purchase the widgets for far fewer dollars than would be its price when sold to the end line consumer. In addition, the cost of the actual transaction must include that of the person doing the transaction. Now consider the direct and indirect costs of having the widget available for the customer. All of this must be accounted for and controlled so that the elusive concept of “profit” is not misplaced or overlooked.

In their simplest of terms we must ask ourselves, with COGS and ROI, what does it cost us to do the business of dentistry? Remember, labor is not free. And, the most expensive of all labor is non-billable labor. What am I talking about? I’m talking about your administrative team.

Now let’s examine some of the facts and myths facing the administration of a traditional dental practice.

Myth #1

“With the Affordable Care Act (ACA), i.e. ObamaCare, dental offices are now being forced to learn the intricacies of medical coding and billing.”

Wrong! The fact of the matter is that the only people making money on the concept of billing dental procedures with medical codes are the ones who are teaching the classes. Dentists do what dentists do and that is simply defined as dentistry. When a dentist constructs a mandibular repositioning appliance to assist in keeping open the patient’s airway, that dentist is not treating sleep apnea. The dentist has merely filled the prescription of the physician who diagnosed the condition. This is no different than the pharmacist dispensing all the little pills to treat the patient’s heart condition. The pharmacist is not treating high blood pressure – the prescribing physician is. Now do you understand why the health plan wants the sleep study?

Let me share with you some pointers on how to tell the good guys from the bad guys when it comes to continuing education and the plethora of not so honest teachers flooding the marketplace and poisoning your administrative team.

  • The course, as well as subsequent reference materials, requires the attendee user to sign a non-disclosure agreement.
  • The material encourages the filing of medical claims to be under a separate Tax ID number and address than that of the dental office or entity.
  • Recommended diagnostic coding selectively avoids any reference to the hard or soft tissues of the oral cavity as well as tooth structure and degree of licensure of the treating physician.

Never, and under no condition ever, should a DDS or DMD (oral surgeon or not) ever directly generate a claim and bill a medical or health plan without first accurately submitting to the dental plan and following their direction as stated on the dental explanation of benefits or EOB. If and when the EOB states that the service needs first to be considered by the non-dental plan of benefits – send that supporting documentation along with your claim.

On the other side of the coin, yes, dentists can legitimately become a Medicare Durable Medical Equipment (DME) supplier and bill Medicare for oral appliance therapy. Now consider the global fee for the appliance, as set by Medicare, must include all components of the appliance and related services. The single payment by Medicare includes all time, labor, materials, professional services, radiology, and laboratory costs incurred in fabrication as well as dispensing the device, as well as fitting, adjustment and any additional professional services required during the 90 days following initial placement.

That $1300 from Medicare with CPT code E0486 did not get you very far. Like I said, you have to consider the cost. And the biggest cost outside of the operatory is that of unbillable administrative labor.

Myth #2

“But wait a minute, the dental plan told us we have to get the denial from the medical plan before they will consider dental benefits.”

This is a fact. But now the rest of the story as the same holds true for most surgical procedures…

When an employer group has both a dental and health component in its benefit package, the same or similar procedural services are never covered under both. Health plan administrators and insurance companies have recently, within the last few years, found out that they have unknowingly been in error paying for dental procedures with medical benefits. State and federal regulatory as well as law enforcement agencies are cracking down on the fraudulent submission of health care, including dental, claims.

Generally during the first quarter of each fiscal year either, or both, the health and dental plans will directly inquire of their subscribers about other coverages within the family household. Yes, I too got the letter from my individual health plan (BCBS) wanting to know of any additional coverage beyond their plan. As benefit plans continue to evolve within this changing demographic economy, I can confirm for you that traditional Coordination of Benefits is dead, gone, or in the process or breathing its last breaths. Multiple plans no longer cover the singular procedure. It’s one or the other – but never to rarely ever both.

When the dental plan wants the denial of coverage from the health plan, they are merely protecting themselves and the contracted employer from the double billing practitioner. In other words, the plan wants to confirm that no one else in the form of a plan is sharing in the overall cost of the procedure.

In Conclusion…

So in conclusion here we are. Right back where we started.

What is the best way for dentists to make additional revenues in today’s ever changing and uncharted economy? We surely cannot recreate the past in anticipation that one day we can go back to the good old days of annually raising fees 3% to 5%.

Do all the dentistry that you love – while streamlining and simplifying the overall reimbursement process. For when all is said and done – that is how we are all “making dentistry affordable for millions of people through education and information.”

See you on the road! Continued next month…

Tom Limoli

Tom Limoli

“The Nation’s Leading Reimbursement Expert”

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