defined dental benefit plans figure 1

Dental benefit plans1 seeking to limit the fees professionals are permitted to ask for and collect is not really very surprising when one thinks like a business person.

The companies that build these plans and sell them are businesses, and just like your dental business might decide to join a buyer’s club to lower the cost of an essential “supply” and increase profit, they seek to find dentists and corporations owning dental practices that will sell them the essential item they then re-sell – professional services – at a lower rate and raise profits. Being angry because they do this is not productive since it flies in the face of what each of us do everyday if we own a business. It’s just business. The issues created are business issues when one takes that viewpoint.

Because this is healthcare, I must state for the record that there are also professional and ethical issues created. Still, given fair consideration of these professional and ethical issues, casting defined dental benefit plans as evil simply because they do what businesses do and have always done is, in my humble opinion, a bit disingenuous of us as business owners.

Limiting fees

The professional and ethical dilemma that I encountered when I was involved with a defined benefit plan several years ago – the right of the patient to select the care they would like to have and choose to pay for willingly regardless of what their defined benefit plan has negotiated with the “providers” to give them – is an issue that eventually drove me away from a relationship with defined dental benefit plans beyond sending in a report of what transpired in my office and the fees associated with that.

If you decide to participate (be contracted) with a defined dental plan, you have already agreed to a preset fee for every service the defined benefit plan lists as a covered service. This was a business decision and drives what you are able to offer the patients in that defined plan. In some states you have also agreed to a preset fee for services that are not covered by the defined benefit plan if the plan elects to limit those fees also. In that case, you have agreed to ask and collect for preset fees for all of those non-covered services, too. 

In a July 2013 listing from the ADA, 33 states had laws in place that prevent dental defined benefit plans from limiting the fees you may ask for and collect for non-covered services. There are an additional two states that have added legislation since then for a toal of 35:

  • Alaska
  • Arizona
  • Arkansas
  • California
  • Connecticut
  • Georgia
  • Hawaii
  • Idaho
  • Illinois
  • Iowa
  • Kansas
  • Kentucky
  • Louisiana
  • Maryland
  • Massachusetts
  • Minnesota
  • Mississippi
  • Missouri
  • Montana
  • Nebraska
  • Nevada
  • New Mexico
  • North Carolina
  • North Dakota
  • Oklahoma
  • Oregon
  • Pennsylvania
  • Rhode Island
  • South Dakota
  • Tennessee
  • Texas
  • Virginia
  • Washington
  • Wisconsin
  • Wyoming

If you practice in one of these states and you are contracted in a PPO plan, that plan may not limit the fees you ask or receive for non-covered services. If you want to see the details, download this PDF from the ADA 2013 report, "State Laws - Prevent Capping of Non-covered Services." 2

That means that if you practice in Alabama, Colorado, Delaware, Florida, Indiana, Maine, Michigan, New Hampshire, New Jersey, New York, Ohio, South Carolina, Utah, Vermont or West Virginia, and are contracted with any defined dental benefit plans as a PPO “provider,” you may be limited on the fees you can ask and receive for services that are not covered by the defined benefit plan. (If you are aware of any difference between the information the ADA currently has and the law in your state, I would be very grateful for that information so I can pass it on.)

Reduction of choice

One of the professional and ethical dilemmas created by defined dental benefit plans is a reduction of the choices available to the patient and the doctor. If you, the patient, wanted to choose a different type of service and pay for it, the doctor could be in violation of the contract with the defined benefit plan by accepting that payment for the different level of service.

This dilemma could also arise even if you expected and wanted no benefit for the service provided. If you chose to opt out of your defined benefit and just get what you want for yourself, it could place the doctor in violation of the contract as he/she might be obligated to inform the plan of all services provided for you.

In 2013, HIPPA changed that. According to the ADA, patients can choose to opt out of a benefit, direct the doctor not to inform their benefit plan, and pay in full for the services themselves. Even if the PPO contract obligates the doctor to inform the plan of all services, that contract cannot require you to violate applicable law. 3

If you live in a state where patients are not free to exercise their right to have something different than what a defined plan allows, know that the ADA is actively working to educate legislators to enact laws that give choice to the patient. Write or speak with your representative to show them that adding such freedom can only improve the impact of any assistance received through a dental defined benefit plan. We do not need to work against these plans, but we need not be shackled by their choices regarding what our patients need and what our patients want.


  1. Some would call these plans “dental insurance,” but they are not dental insurance – as most of you know that is a topic near and dear to my heart. For more on this, read my article on why dental insurance does not exist.
  2. ADA sheet “State Laws – Prevent Capping of Non-Covered Services”  July 10, 2013
  3. ADA response to inquiry:  Patients can opt out of coverage and pay themselves, rec’d 5.9.16


Commenter's Profile Image Paul L.
December 8th, 2016
Excellent article as well as the linked article on Why dental insurance does not exist. It is great to see what I would consider progress, thanks for keeping us informed. The question I have is how can companies selling benefit plans get away with calling themselves insurance companies? I can understand why they would want to label their services as insurance. The name implies a wealth of implications on how a service will behave. I just don’t know how they get away with it since the service does not behave in that way. If I went and bought a V8 super charged sports car and then was given a flat 2 cylinder with clogged fuel lines how would the dealer who sold me the vehicle under a false label not be held accountable. Yet this is what we see happening with millions of dental benefits plan being sold. Benefit packages are advertised, sold and referenced as insurance plans. Done in such a way that has almost all patients, businesses and even Dentists convinced that they have a V8 and almost everyone is frustrated by the 2 cylinder performance, except those packaging and selling the service. As a businessman I agree, don’t bash the service, and try to inform patients of what they actually have. I am sure I there are a list of things I could be doing better to communicate this, in fact I have a list I continue to work on. As a business owner I fell it is in my best interest to try to communicate this to patients. As an ADA due paying Dentist I wonder why it is that we let dental benefit providers get away with what seems like a national bait and switch. I’m sure for many a benefits package would be a great thing and in no way evil. I’m also sure there would be a large portion when they saw what it was they would choose to spend their healthcare dollars differently and those who did decided to purchase the benefits package would then know what they had.
Commenter's Profile Image Gary D.
December 9th, 2016
Thanks Paul. I agree that the ADA could do more to help employers and consumers understand the product they are purchasing. It is not a slam to dental benefits to clearly illustrate what they are, which is assistance (a defined benefit) rather than insurance. Thanks for reading.
Commenter's Profile Image Paul L.
December 9th, 2016
It's great to see some forward thinking, not just getting mad and making dental benefit companies a scapegoat for all our problems. Good job on putting down some objective thoughts on a difficult and well needed topic to be addressed. I know I took away from it.
Commenter's Profile Image Mike D.
June 28th, 2018
Nice article Gary. What about a scenario where a contracted "insurer" deems a covered procedure medically not necessary, and then stipulates that you can't charge a patient for that procedure? Is this not also a reduction of choice to the patient?
Commenter's Profile Image Gary D.
June 29th, 2018
I do not believe any "insurer" is permitted by law or contract to do that. Almost all Veneers are medically not necessary and therefore denied or not covered so the patient pays for them. If they do not cover a service or have a zero benefit they can't dictate a fee (or NO fee) in most states even if they have a set fee quoted for the service, and then they can't tell you you may not collect THAT fee. BUT it's really important for all of us to remember that NONE of this reduces ANY choice the patient has - they can ALWAYS opt out and have you provide anything they want. We need to change their mindset by changing our own about what a benefit plan SHOULD do. If we can help patients see they always have choice - it's a COUPON not an insurance policy - they can use it as they wish, or choose something else. Thanks for posting Mike!
Commenter's Profile Image Deidra M.
September 19th, 2018
Hey, Gary - great article! I believe what Mike is referring to is the concept of a "disallowed" procedure. This is a hot button issue at the moment, as some insurers will stipulate in the dentist's contract that certain procedures may be disallowed, and the insurance will provide no benefits AND the dentist cannot charge the patient for the procedure. United Concordia recently issued a statement backing off from their disallowed procedures clause, as long as the dentist gains informed consent from the patient prior to the procedure that it will not be covered. This was documented in the Sept 17th, 2018 ADA News. A related clause (which may or may not fall under the same "disallowed" terminology, though I believe it's technically "bundling") is a circumstance where the insurance considers one procedure as part of another procedure if billed on the same day. For instance, it's my understanding that Cigna disallows charging for a buildup if a crown is prepared at the same time, and Delta disallows charging for an indirect pulp cap if placed the same day as a restoration.
Commenter's Profile Image Gary D.
September 19th, 2018
Thanks for the comment Dierda. Since any patient can opt out of their plan to get whatever they want, having a disallowed service for which you cannot charge a fee is a moot point. If the patient wants the service, you simply have them opt out of their benefit plan for that service - there is no available benefit anyway - and the company cannot stop you from receiving any compensation you and the patient agree on. This is true in ALL states regardless of any contract you have signed with the benefit carrier. Bundling IS something they can choose to dictate to you if you are submitting for the services. That being said, if the patient told you they wanted to opt out for the service "buildup" when you were providing the service "crown", they could pay you any fee for that service regardless of the services for which you submitted to their benefit plan. You are bound by law NOT to submit for the "buildup", but you do have to include the opt out as part of the chart in the event you are audited by the carrier who sees services provided for which you did not file a report (insurance form) and thinks you are in breech of contract.