Question: I have had several colleagues describe their experience with dental plan audits. All of them have had to pay something back. Sometimes they say this is due to a service being deemed a “noncovered service.” Other times I hear that the refund is due to a service being “disallowed.” Are they talking about the same thing? If not, what is the difference?
Answer: These terms may be used interchangeably by some, but should not be. They describe different reasons for why a dental plan is asking for money back or denying payment of a claim.
Non-covered services (as the name implies) refer to services that are not covered by the patient’s dental plan. It could be that the service was once covered by the patient’s dental plan but is no longer covered due to a dental plan limitation. For example, the dental plan may contain a limit on the number of cleanings, X-rays, crowns, etc., that are covered each plan year, or there may be a maximum dollar amount (per family, per family enrollee, or both) the dental plan will pay each plan year that has been reached. Or there may be maximums the plan will cover for particular procedures (e.g., $1,000 per plan year for orthodontics) that have been met, etc. Other examples of non-covered services are those that the patient’s dental plan does not cover under any circumstances (such as cosmetic procedures and sleep apnea services).
The issue with non-covered services typically is whether the dentist’s contract with the dental plan applies when these non-covered services are provided. Do you have to file a claim with the patient’s dental plan, and can you bill the patient what you want, or are you limited to the dental plan’s fee schedule amount? Dentists (especially new dentists) are often surprised to learn that when you participate with a dental plan your contract requires you limit your fee to the fee-schedule amount, and that you are required to file a claim even though the service provided is non-covered. Most do not understand why a dental plan fixes a fee for a service it is not paying for. This is a question that only the dental plan can answer. You must review all your contracts with the dental plans you participate with and determine what you are required to do when providing a non-covered service.
Note that HIPAA contains a provision prohibiting you from filing a claim with a dental plan when the patient instructs you not to do so and pays in full for the service out of pocket. It is therefore possible for you to provide a non-covered or other service to a patient without filing a claim with the patient’s dental plan. The patient’s request must be documented properly in writing and should be retained in the patient’s dental record.
“Disallowed” services refers to those services that are covered but the dental plan says should not be paid for. Unlike a non-covered service, a service is disallowed for cause. The causes typically include a deficiency in the claim form submitted (such as missing or inaccurate information) or the dental plan has made a determination that the service was inappropriate, performed below the standard of care, was never performed (this is usually due to lack of documentation or poor documentation in the dental record), or the dental plan believes the payment requested was included in another claim submitted by the dentist.
When a service is disallowed, the dentist is not allowed to bill and collect for it at all or keep what has been paid for the service. You should review your participation agreements to determine what rights you have to contest the findings causing your services to be deemed disallowed.
This article originally appeared in the January 2025 edition of the Journal of the Michigan Dental Association.
