It’s estimated that up to 3% of total healthcare expenditures per year – including for dental care — are a result of fraud. With national dental care expenditures reaching $162 billion per year, that amounts to a massive $4.86 billion in annual dental billing fraud. The majority of dentists do not engage in intentional misconduct. They're reputable, well-meaning providers who want to help people. However, there are some illegal dental billing practices that could lead to unintentional rule breaking.

There are illegal dental billing practices that can happen unintentionally
There are illegal dental billing practices that can happen unintentionally.

Before implementing any billing or patient policies, it's essential to consult with an attorney specializing in healthcare law. Legal guidance ensures that your practice adheres to regulations and avoids unintentional mistakes that could lead to legal consequences, jeopardizing patient trust and the reputation of your practice.

5 Illegal Dental Billing Practices That Can Happen Unintentionally

Most dentists don't get a lot of training in medical billing and coding, nor do they fully understand the ethical or legal repercussions. They typically have to rely on their staff to ensure that the practice follows approved protocols for submitting insurance claims and handling self-pay patients. That’s why it can be easy to unintentionally commit the five following illegal dental billing practices:

  1. Waving Co-pays

  2.  Unbundling

  3. Bad faith estimates 

  4. Kickbacks

  5. Downcoding

The above five illegal billing practices are particularly challenging because they’re not always intentionally done. By examining the purpose behind each, you can avoid these issues in your practice.

1. Why Waving Copays Can Cost You

Waiving copays may seem like a great way to encourage patients to accept treatment plans. However, there's a third party involved in the patient/dentist relationship: the insurance company. The patient has a contractual agreement with that company, as does the dentist. Under the American Dental Association’s guidance on copay waivers:

A dentist who accepts a third-party payment under a co-payment plan as payment in full without disclosing to the third party that the patient's payment portion will not be collected is engaged in overbilling.

Disclosing the waiver to the insurance company isn't an immediate fix for this situation either. A dentist who routinely waives copays may be overbilling, misrepresenting the cost of service, or favoring patients in a way that is discriminatory. For those reasons, it's best to complete any copay waivers in line with charitable or free aid programs rather than directly.

2. Understanding (and Avoiding) Unbundling

In dental care, unbundling typically refers to the separation of dental services that are commonly provided together or as part of a comprehensive treatment plan. This practice may involve billing for individual procedures or elements of care separately, rather than as a bundled package. While there may be legitimate reasons for itemizing certain services, unbundling in dental care can be a sensitive issue, especially if it raises concerns about ethical billing practices or potential insurance fraud.

Unfortunately, it can be quite confusing as to what would be considered unbundling and what is required by the insurance company. There are hundreds of different dental billing codes for even the smallest parts of treatment, so confusion exists as to why they are included if they’re not supposed to be used. The ADA outlines a few common issues including:

  • Billing for pins separately from a core buildup when pins are considered part of the buildup procedure.

  • Charging separately for adhesives, bases, or liners from restorations, as these are defined to be included in the restoration code.

  • Submitting occlusal adjustments and minor adjustments to prostheses as separate services when the prosthetic service includes routine post-delivery care.

  • Billing suture removal as a separate service from extractions, which already include suturing and postoperative care.

  • Treating X-rays taken during root canal therapy as a separate service from the root canal, which, by definition, includes intraoperative X-rays.

Those are just a few examples of unbundling issues that can have legal and ethical implications. Dentists need to be cautious to ensure that unbundling practices comply with industry standards and regulations to maintain transparency and uphold the integrity of the billing process.

3. How The No Surprises Act Affects Dental Estimates

Dental practices have typically enjoyed some protections against balance billing laws that prohibit other healthcare providers from collecting disallowed amounts on balances due. However, the No Surprises Act, passed in 2020, has established some new restrictions that may affect dental billing related to this.

The Centers for Medicare & Medicaid (CMS) recently clarified that dental providers are generally obligated to furnish uninsured or self-pay individuals with a good faith estimate of expected charges under federal regulation 45 CFR 149.610.

However, CMS outlined an exemption, stating that providers are generally not required to offer such estimates to individuals enrolled in excepted benefit plans or coverage, such as limited-scope dental plans. This exemption is based on the assumption that individuals with these plans fall outside of the definition of "uninsured."

However, there are exceptions to this exception as well. CMS has outlined two:

  1. if the excepted benefit plan does not cover a scheduled or requested item or service,

  2.  or if the individual does not seek to have a claim submitted to their excepted benefit plan,

In those cases, the individual is considered uninsured or self-pay for that specific service. In such cases, individuals with a good faith estimate have the option to initiate the Patient-Provider Dispute Resolution process if the bill surpasses the estimate by at least $400.

4. Keep Away from Kickbacks

A medical billing kickback occurs when a practice uses payments to encourage patients to visit their offices, whether directly or through referrals. This undermines the integrity of healthcare services by potentially prioritizing financial incentives over patient needs. Such kickbacks can lead to compromised medical decisions, unnecessary treatments, and a distortion of the patient-provider relationship.

Regulatory bodies and healthcare organizations prohibit these practices to maintain the trust and ethical standards essential in the medical profession. Upholding transparency, prioritizing patient welfare, and adhering to established guidelines are crucial in fostering a healthcare system that prioritizes quality care over financial gain.

5. Due Diligence to Avoid Downcoding

Upcoding is an obvious problem in dental billing – clearly, dental practices should not be billing for higher-cost, more complex procedures to inflate their billable amounts. However, it's also illegal to go the opposite way, known as downcoding. There are a few different reasons that this may happen:

  • Insurance Approval: Some providers may downcode to increase the likelihood of insurance approval, choosing codes that are more likely to be covered.

  • Lack of Familiarity: Unintentional downcoding may occur due to a lack of familiarity with coding guidelines or changes in coding systems.

  • Increased Reimbursement: Providers might downcode to ensure reimbursement, selecting codes that align with what insurance companies are more likely to approve.

  • Avoidance of Audits: Downcoding may be used to avoid scrutiny or audits from insurance companies or regulatory authorities.

  • Perceived Complexity: In some cases, providers might downcode because they perceive a procedure to be less complex than it is.

It's crucial for dental professionals to adhere to accurate coding practices, avoiding both upcoding and downcoding, to ensure fair reimbursement, maintain ethical standards, and comply with legal regulations. Intuitive dental billing software and an expert team can help make this easier.

Dental practices can mitigate unintentional mistakes and uphold ethical billing practices
Dental practices can mitigate unintentional mistakes and uphold ethical billing practices.

Overlooking these illegal dental billing practices is common because they often stem from unintentional errors rather than deliberate misconduct. In some cases, dental practices may aim to assist patients by alleviating financial burdens. The key to addressing these issues and maintaining ethical billing involves ongoing staff education, periodic audits, transparent patient communication, legal consultation, and the implementation of internal controls. Through such measures, dental practices can mitigate unintentional mistakes, promote accuracy, and uphold ethical standards in billing practices.