How To Avoid Falling Victim to These 5 Illegal Dental Benefit Plan Billing Practices

Conservative estimates suggest that 3% of annual health and dental care expenditures result from fraud. Government and law enforcement agencies, however, place potential losses as high as 10%. While precise figures are challenging to pin down, the National Health Care Anti-Fraud Association places costs in the tens of billions — a burden shared by both practitioners and patients.

With dental care expenditures hitting about $165 billion in 2022, these percentages translate to staggering losses, ranging between $4.86 billion and $16.5 billion each year in billing fraud.

That’s not to suggest dentists are purposefully engaging in fraudulent practices. It’s quite the opposite; most providers uphold high ethical standards when treating and billing patients. However, practitioners often receive limited training in billing and coding, instead relying heavily on their staff to ensure compliance with insurance claim protocols and self-pay patient handling. This lack of training may increase the likelihood of unintentionally committing an illegal billing practice.

With an understanding of the 5 practices below, dental teams can avoid pitfalls in benefit plan billing.

1. Waiving Copays

Waiving benefit plan copays may appear to be an innocent, patient-friendly practice that can encourage patients to undergo treatment. However, patients and dentists are subject to contractual agreements with benefit providers. According to American Dental Association (ADA) guidance, accepting a third-party payment under a copayment plan as full payment without informing the insurer the patient’s portion won’t be collected constitutes overbilling — an illegal practice.

Simply disclosing the copay waiver isn’t a solution for this situation. Routine copay waivers could raise more red flags; dentists may be not only engaging in overbilling but also misrepresenting the cost of services and engaging in discriminatory preferential treatment. To avoid ethical and legal pitfalls, waivers should align with charitable or free aid programs.

2. Unbundling Dental Services

Unbundling is the act of separately billing services that are typically grouped together as part of a comprehensive treatment plan. While itemization for certain services is sometimes necessary, improper separation of services can raise ethical billing and insurance fraud concerns.

There’s a caveat here: With hundreds of billing codes, it can be challenging to distinguish what’s considered unbundling and what’s actually required by benefit providers. Dental practices often mistakenly bill separately for component services covered in a main procedure’s code. Examples from the ADA include billing separately for:

• Pins in a core build-up
• Adhesives, bases, or liners in a restoration
• Occlusal and minor adjustments to prostheses
• Suture removal from extractions
• X-rays taken during root canal therapy

By exercising caution and staying informed on industry guidelines, providers can ensure any unbundling practices comply with regulations and maintain integrity in how they bill benefit providers.

3. Providing Bad Faith Estimates

The No Surprises Act safeguards patients against surprise medical bills for emergency and certain out-of-network services. It also includes a dispute resolution process for billing conflicts and protections for uninsured patients facing bills notably higher than their good faith estimate, as mandated under federal law for providers to supply to uninsured and self-pay patients.

Limited-scope dental plans exempt certain patients from this requirement, but there are exemptions, making it vital for practices to understand the nuances.

The Centers for Medicare & Medicaid has laid out 2 exemptions:

• If a benefit plan doesn’t cover a scheduled or requested item or service
• If a patient isn’t submitting a claim to their expected benefit plan

In these situations, patients are considered uninsured or self-pay for that specific item or service and require a good-faith estimate. Moreover, if their bill surpasses the estimate by at least $400, they can initiate a dispute resolution process.

Practices can avoid surprises by adhering to regulatory requirements and clearly communicating expected costs to patients.

4. Giving Kickbacks

When practices engage in benefit plan billing kickbacks through either financial incentives for referrals or patient visits, they prioritize their financial health over that of their patients. Such acts can undermine trust, compromise medical decisions, and even lead to unnecessary treatments.

Both regulatory and healthcare organizations prohibit such practices to ensure patient-first care is prioritized over financial gain. To safeguard patient welfare and uphold trust, practices must adhere to established guidelines and federal laws relating to kickback and referral practices.

5. Engaging in Miscoding

“Upcoding” is a widely known illegal billing practice in which a provider overcharges for a procedure to receive a larger reimbursement. It may come as a surprise, but the lesser-known practice of downcoding — billing for less costly services to avoid audits or secure insurance approval or reimbursement — is also illegal.

To be fair, coding errors can be unintentional, occurring because of coding system changes, benefit plan expectations, or a lack of familiarity with proper codes. Accurate coding practices are key to staying legally compliant and ensuring fair reimbursement. To reduce such errors, practice leaders and staff can subscribe to ADA updates, take continuing education courses, and use electronic health record and practice management solutions for billing.

Final Thoughts

When illegal benefit plan billing practices stem from unintentional errors or well-intentioned efforts to alleviate high patient costs, they can be easily overlooked. To avoid falling victim to these illegal billing tactics, however, practices should educate their staff, conduct periodic audits, engage in transparent patient communications, implement internal controls, and seek expert legal counsel.

Taking a proactive approach to billing practices will help practices uphold ethical standards, promote accuracy, and mitigate unintentional violations.