Dental insurance companies reimburse patients for dental procedures. But, if you have dental insurance, you know that the amount the insurance company reimburses you for is usually less than what your dentist charges. This is because dental insurance companies consider what is "reasonable and customary."
According to the Michigan Dental Association's online report "How Dental Fees are Set," a reasonable fee is the amount charged by a dentist if the procedure has special circumstances that justify a higher fee. For example, a cavity that is more severe than expected may cost more to treat because the dentist spends more time or uses special equipment.
A customary charge is the highest amount of money an insurance company usually pays for a procedure, according to the Michigan Dental Association's online report "How Dental Fees are Set." If you have dental insurance through work, the limit is set by your employer's contract with the insurance company.
In its online publication, "Your Dental Insurance, What You Should Know," the American Dental Association warns patients that reimbursement is not based on what dentists actually charge. No laws regulate the amount of money insurance companies pay and they are not required to reveal to the public how they determine reasonable and customary charges.