What Is the Difference Between a Dental Insurance PPO & Indemnity Plan?
Two options for dental insurance are preferred provider organizations (PPO) or dental indemnity plans, also called fee for service plans. While both are popular, PPOs are more readily available for individuals and companies, whereas indemnity plans are usually geared to provide company coverage.
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Choosing a Dentist
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A PPO plan contracts with dentists who have agreed to provide dental treatment at specified costs. While you usually can see a provider outside the network, you usually will pay more if you do. With an indemnity plan, you can choose whatever dentist you want.
Indemnity Coverage
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With indemnity coverage, you are reimbursed a stated percentage, usually ranging from 50 percent to 100 percent of the what the insurance company considers "usual, customary, and reasonable" (UCR) costs or according to a "table of allowances" that states how much the insurer will pay for each covered procedure. Most insurance companies' UCR fees are lower than what dental offices normally charge.
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PPO Coverage
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If you go to a PPO-contracted dentist, the insurance company will pay the stated percentage of each procedure, ranging from 50 to 100 percent. If you go outside the network, the insurer will cover the same percentage based on their stated UCR, which is usually lower than the dental office charges, much like the indemnity plan.
Filing a Claim
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Usually the dentist office files a claim under PPO insurance, with the patient assigning benefits to the dentist. For indemnity plans, the patient is responsible for full payment to the office at the time of service and then must file directly with the insurance company for reimbursement.
The Catch
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When payment is denied by a PPO or indemnity plan, the patient is responsible for the full cost of treatment. Some reasons for denial of payment include violation of a waiting period, replacing a tooth extracted prior to coverage, or services that are deemed unwarranted by the insurance company. Whatever the reason, the patient becomes responsible for the full amount and must pay the dental office directly.
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- Photo Credit Image by Flickr.com, courtesy of Victor Keegan
