PPO Dental Plan Definition
One form of dental insurance is the Preferred Provider Organization (PPO). PPO dental insurance involves managed care organizations that contract with networks of dentists to provide services.
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How It Works
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The insurance carrier contracts with dental offices to provide treatment to patients in specific areas. In turn, the dentists agree to charge a set (contracted) fee to the patients enrolled by the carrier; this fee, however, is usually lower than the practice's normal fees.
Cost Savings
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For patients using PPO insurance, the contracted fees offer significant savings over the dental office's "usual, customary, and reasonable" (UCR) fees. The percentage of coverage that a PPO offers ranges from 50 to 100 percent. When a patient is using a "preferred provider" (contracted), the insurance estimate will always be accurate.
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Going Outside the Network
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PPOs offer the option of leaving the network of providers to see a dentist of your choice. While insurance will cover services, the percentage it pays will be based on the carrier's UCR fees, not the dental office's actual fees. Therefore, your co-pay may be much higher than it would have been at a contracted dental office. For example, if the carrier pays 100 percent of cleanings at $50 but the dental office charges $95, you would pay $45 for what would have cost you nothing at a contracted office.
PPO Advantages
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Being able to choose a lower cost with a preferred provider but still having the freedom to receive treatment at another facility is one benefit of using a PPO. Most offices that accept insurance will also send the insurance claim for you, unlike indemnity plans, which require that you file the claim yourself.
PPO Disadvantages
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PPO plans have deductibles that must be met before the insurance payments go into effect. Compared with other dental plan options, such as dental health management organizations (DHMOs), PPO plans have higher monthly premiums. Coverage percentages are usually good, but a yearly maximum makes the PPO rather restrictive.
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