You see two long words with the same prefix and think “probably is close to the same thing!” In this case, they actually have different meanings. In the dental world, many people use the terms predetermination and preauthorization interchangeably. However, there can be some differences in the meaning depending on its purpose. Confused? We get it. Not everyone’s an expert on insurance terms, and they can get really complicated.
Our team of experienced dental billers at Dental ClaimSupport have submitted many predeterminations and preauthorizations over a number of years. We know the pros and cons of this practice and understand the meaning of these terms and the payer’s views. We value education and learning as much as we can about dental billing terms so that we can move through the process seamlessly.
In this article, we’re going to look at how these terms are defined, understand where they are properly applied, and show you how to submit a written request using predetermination and preauthorization.
What does predetermination and preauthorization mean for a dental office?
According to the Dental Benefits A Guide to Managed Plans Third Edition by Cathye L. Smithwick Predetermination and Preauthorization are defined as the following:
- “preauthorization – see predetermination.”
- “predetermination – Process that is often recommended but not required for dental services that are expected to exceed some financial threshold, for example, greater than $500. Predetermination or estimates occur when the dentist submits a claim form for proposed services not yet provided. In turn, the administrator provides an estimate of the amount the plan will pay and the amount that will be the patient’s responsibility. Though not a guarantee, predeterminations are valuable for both dentists and patients for aiding in treatment planning and financing. Also known as a pretreatment estimate.”
The ADA Glossary of administrative terms defines the following:
- “preauthorization: Statement by a third-party payer indicating that proposed treatment will be covered under the terms of the benefit contract. See also precertification, predetermination.”
- “precertification: Confirmation by a third-party payer of a patient’s eligibility for coverage under a dental benefit program. See preauthorization, predetermination.”
- “predetermination: A process where a dentist submits a treatment plan to the payer before treatment begins. The payer reviews the treatment plan and notifies the dentist and patient of one or more of the following: patient’s eligibility, covered services, amounts payable, co-payment and deductibles and plan maximums.”
Why is it important to differentiate dental Predeterminations versus Preauthorizations?
What’s important to understand is that none of these payer plan estimates are a guarantee of payment, regardless of the language used by the payer.
When we receive the Dental Benefits Estimate or a Pre-Treatment Estimate (varies depending on payer), the benefits of the patient’s plan and eligibility of coverage on the date the request was processed are indicated. As you know, all dental plans include limitations and exclusions. All limitations and exclusions may not be applied to the estimate. Additionally, if the patient is not eligible on the date of service, then the service will be denied.
In rare cases, some plans may request a predetermination be submitted when the service(s) are expected to be above a defined amount. If this isn’t submitted as the plan instructs, the claim could result in a denial. Again, this is rare, but it’s a reminder to always be aware of all plan guidelines.
Prior Approvals and Prior Authorizations
Let’s talk about prior approvals and prior authorizations. As a contracted provider with Medicaid or some PPO or other plans, you may be required to obtain a prior authorization for certain services. If so, then this takes on a different meaning.
This means that you must submit a request for prior authorization when required by the contract. Otherwise, the treatment may be subject to a full fee contract write off for the provider.
Understand what you have agreed to. Review all your provider manuals, especially your Medicaid manuals as this is a common provision. Some Medicaid payers may provide a prior authorization via phone or an online portal. Always follow the payer instructions to obtain a prior authorization.
How do predeterminations and preauthorizations look on the 2019 ADA dental claim form?
The illustrations below demonstrate how to properly submit a predetermination, preauthorization, etc. Note that these illustrations are based on the official claim form instructions provided by the ADA, however each payer, for instance Medicaid, may have a specific process.
How to submit a written request for predetermination/preauthorization
Box 1 – Check the Box for Request for Pred-PreAuth
Box 1 and box 2 are completed as illustrated when the actual claim is submitted. Note the number entered in box 2 may be an authorization number given by the payer, or it could be just the claim #retrieved from the predetermination of benefits EOB.
Box 24 is left blank when submitting a predetermination/preauthorization
Predetermination and preauthorization mean different things to different insurance payers
Terms discussed in this article are used interchangeably but may mean different things for different payers. For example, a payer may deem a pre authorization as a summary of benefits. Whereas, another payer may deem a pre authorization as an approval, such as Medicaid. Regardless, if the patient becomes ineligible for benefits on the date of service, then the claim will be denied.
Benefits available at the time the claim is processed will be applied. For example, if the patient has treatment with a date of service of 03/01/2021, the claim is processed on 03/15/2021 and the patient exhausted their annual maximum because another claim was processed first, then no benefit will be paid. Benefits are subject to plan limitations and benefits available, always.
A predetermination of benefits is a great tool for providers and patients to understand the benefits available and estimated out-of-pocket expenses. But always keep in mind that there is no guarantee of payment, and all provisions such as limitations and exclusions are not applied to the predetermination. Lastly, don’t let predeterminations dictate your dentistry. If a patient needs a procedure performed, make sure the patient receives the treatment
For example, the patient may have implant coverage and the predetermination may state the plan benefits for implants, but when the actual claim is processed, a limitation such as an alternate benefit of a removable partial denture may be applied to the implants.This results in a higher out of pocket expense for the patient. Patients and providers alike are surprised. Read the fine print/disclaimer on the predetermination carefully and make sure the patient understands this as well.
Thorough verification of benefits including asking specific plan limitations can help decrease alternate benefit surprises as in the example above.
Additionally, the patient can request a copy of the dental plan document which will outline such alternate benefit contract clauses of their plan. Only the patient can request the plan document. The plan document may be requested directly from the employer of a self-funded plan, or directly from the insurance payer for individual or other group plans purchased from the payer.
Learning and navigating the rules of dental billing
Some states have legislation and proposed legislation to require a plan to stand by their original estimate of benefits. Contact your state dental association for details regarding your state legislation. As you can tell, we love learning about all things dental codes, rules and regulations.
To continue your journey of learning, visit our Dental Claims Academy website to sign up for our webinars covering all things dental coding and billing. Knowing as much as you can about the rules of dental billing can help you avoid mistakes that will keep you from being paid and collecting what you’ve earned.