Are there "caps" on what a dentist can charge for various services?

Question

I'm not asking about insurance coverages or anything like that. What I want to know is does the dental associaiton limit the amount a dentist can charge for particular services or have a guideline for dentists to go by when pricing or is it up to the particular dentists' overhead? Also, is it ethical for cash buyers to be charged 4 times more than what an insurance company would be charged for the same service? I realize when a dentist accepts an insurance they're obligated to accept negotiated reduced fees in exchange for the business and experience. But then is it right for them to charge non-insured patients who are coming out of pocket for the whole thing (hence, no claim forms for them or waiting to get paid, or any of that hassle), 4-6 times more for the same service?

Answer 1

I'm a dentist.

My friend, there's a lot you don't understand.

Dentists (and physicians) have a fee schedule for every service they offer. This fee schedule is set for the year, and doesn't change. Each year, it goes up slightly.

When a patient comes to the office with an insurance policy with whom the doctor participates, they are obligated to ask from the patient for the "allowable" fee. Sometimes that allowable fee is as low as 50 or 60% of the actual fee listed on the doctor's fee schedule. For example, a dentist may ordinarily charge $1000 for a crown. Many insurance plans require that the doctor accept only $700 for the crown ($500 of which may come form insurance, and the rest of which comes from the patient "out of pocket"). That $300 is called an "insurance write-off". $700 out of $1000 isn't bad. Often times, the allowable fees dictated by most insurance plans for major work (e.g. crowns, bridges, root canals, 3rd molar extractions, etc.) is fairly reasonable. Why? Because if it wasn't, doctors wouldn't participate with these plans. And if doctors don't participate and the patient cannot make use the insurance policy, they find another policy. So, it's in the insurance company's best interest to make the doctor semi-happy when it comes to major work.

But what about routine dental work? The allowable fees range from mediocre to atrocious. We tend to get ripped off by insurance companies setting allowable fees as low as 20 or 30% for routine work like check-ups, cleanings, and fillings. And what kind of work do dentists spend the majority of their time doing? Routine work like check-ups and fillings.

So why would any doctor in his right mind participate with these insurance companies when they rip us off like this? Because they send us patients who MIGHT end up needing the more profitable major work. Every doctor's dream is to have a practice where all of its patients are fee-for-service, i.e. no insurance participation. But the reality is that such practices are relatively few and far between, because we need insurance companies to refer us patients more than we need to get paid what we'd like to charge for our work.

The upshot is that, when you don't have insurance (or don't have access to a dentist who participates with your insurance), you are subject to the fee listed on the doctor's fee schedule. Your insurance will pay whatever it's going to pay for the crown, and you're responsible for the rest.

We're not overcharging you by doing this. We're simply not undercharging you the way we do with patients on insurance plans with whom we participate.