Dental Clinics and the UCR
The Usual Customary and Reasonable (UCR) charge determines “the amount both [the patient] and [his or her] plan will contribute” within an out-of-network clinic (Ellis 2017). Dental insurance companies can determine the UCR within an area by “[recording] the fee numbers submitted by the practitioners on dental claims. They then ‘sell the numbers’ to a company, such as the Health Insurance Association of America (HIAA),” which “[compares] and [analyzes] fees… collects millions of claims, collates the data, and breaks it down into zip code areas… breaks the data into percentiles and then ‘sells’ the data back to the insurance companies” (Webb 2002). They then “sell policies with premiums based upon the scope of coverage purchased, including the percentile ranking of fees charged” (Webb 2002). UCR percentiles inform dentists on the patients’ coverage, but they should not restrict the clinics’ fees.
The UCR percentiles determine the patients’ coverage, depending on which out-of-network clinic they go to. For example, at the 80th percentile, the UCR fee for root canals, which are 50% covered, is $1,500 (Ellis 2017). If a “dental office charges $1,000 for the root canal,” then the “plan will pay 50% ($500), and [the patient’s] coinsurance payment will be the remaining $500, if [the patient has] met [his or her] plan deductible” (Ellis 2017). If a clinic provides $2,000 root canals, the patient would pay a “coinsurance of $750 [which is 50% of the $1,500 UCR rate], and the remaining $500 balance—a total of $1,250” (Ellis 2017). Employers that provide dental insurance could choose from many insurance policies at different UCR percentile levels (Webb 2002).
However, clinics should not structure their fees too closely to certain percentiles. For instance, according to Udell Webb, “a nationally recognized expert in the area of dental insurance management,” based on a “UCR table for a Southern California zip code area” in the year 2000, “[for] a group number that pays at the 70th percentile [for a crown-full cast, hi noble metal], [the insurance companies] would reimburse based upon 50% (typically) of $699.95. If [the dentist] took this to be ‘the’ UCR and set [his or her] fees based upon this number, [he or she] would lose $53 per crown for any policy that paid at the 90th percentile and $79 for all crowns done for the lower fee that could have been paid at the 95th percentile [i.e. $778.73]” (2002). Webb claims that fees above a certain UCR charge means that “[dentists] are not charging more than all the other doctors in [their] area but [they] are charging more than one cheap employer’s percentile level” (2002). So, dentists could raise their fees to an optimal UCR percentile for more revenue (Webb 2002).
The UCR percentiles let patients know how much coverage they will receive from an out-of-network clinic. For clinics, setting fees towards a UCR charge would attract certain types of patients, depending on their insurance plans, but these fees should lead to profit in the long run.