3 mistakes made when calculating dental patient’s out-of-pocket cost

When you’re giving dental patients an estimate of their out-of-pocket costs, it’s important to be accurate. This means you understand their full breakdown including deductibles, downgrades, and overall: insurance verification. 

Getting this number wrong can lead to patients losing their trust in you because you’re charging them a different number than the estimation you gave them. Money can be sensitive, and some people have to budget for their dental visits. 

At Dental ClaimSupport, we recommend that anyone handling patient billing is confident and educated when it comes to calculating patient estimated out-of-pocket costs. Through the years of being an outsourced dental billing tool, we’ve also seen offices improve their patient’s experience by taking the time to educate patients on their own insurance benefits.

By not being continuously educated on dental billing, mistakes are more likely to happen. And if you’re making mistakes on sensitive subjects like patient out-of-pocket cost estimates, you could lose your patients and in turn, lose valuable revenue.

In this article, we will walk you through the 3 most common mistakes made when handling and calculating dental patient estimated out-of-pocket costs. By understanding these mistakes, your dental office will know what to do in order to avoid sending patients a surprise bill in the mail.

Let’s dive into the 3 most common mistakes when calculating patient out-of-pocket costs.

1. Not understanding deductibles

Almost every patient’s insurance plan has a deductible. The deductible is a specified amount of money that the patient must pay before an insurance company will pay a claim. 

With this in mind, you as the dental practice have to know the deductible and the amount of the deductible remaining to collect the properly estimated amount due, and explain what this means to your patient. As you know, most patients do not understand their own insurance policies - so if they’re going to pay you a certain amount before their insurance benefits “kick in,” you need to let them know. 

We suggest you "inform before you perform" and educate the patient on their specific coverage and benefits.  

You also need to explain how the deductible is factored in.  Always start with the full fee, explain the deductible and percentage of coverage, and then their ESTIMATED portion. 

Here’s an example of how deductibles work: 

Deductibles don’t usually apply to preventive procedures, however, they typically apply to basic and major procedures such as fillings and crowns. So, let’s say a patient comes in who needs a filling. 

This filling costs $100 and is paid at 80% by insurance. If this patient had a $50 deductible that still needed to be satisfied, the insurance would immediately apply the $50 deductible to this filling, taking away from the total benefit to be paid. $50 would be subtracted from the $100 procedure before being paid at 80%. Here’s how it looks:   

$100 (filling) - $50 (deductible) = $50. 

Then insurance will pay 80% of the $50. 

80% x $50 = $40. 

So the insurance is going to pay $40. And the patient will be responsible for the remaining $60.

Keep in mind that the insurance might pay a different amount, and even with this calculation, always remember that it is an estimation of how much the insurance will pay.

If the patient doesn’t understand this, and they are told a wrong dollar amount, then get a surprise bill in the mail - you can pretty much bet they won’t be happy with your dental practice. 

2. Not understanding downgrades

Another common mistake dental teams make when handing patient billing is downgrades. Downgrades occur when the dental insurance elects to pay for a less expensive procedure if there is more than one acceptable option for the patient. 

This can affect the patient because if they elect for the more expensive option… insurance might not cover it. This is something you’d need to talk through with the patient for the same reason as the deductible. If they get a bill they weren’t expecting, they’re going to blame it on you.

Here’s an example of how downgrades work: 

Posterior downgrades are pretty common among patients when it comes to fillings. White tooth-colored or composite fillings are typically downgraded to amalgam fillings (which are silver filings, but they share the same purpose). 

If a one surface filling and a two surface filling are being done on the same tooth, the insurance can downgrade to a three surface filling. 

So although the filling is $100, and the fee associated with amalgam filling is $70. And the insurance will only pay 80% of the $70, then the patient is responsible for the rest. 

Insurance cost: $70 x 80% = $56 

Patient responsibility: $100 - $56 = $44

If your patient doesn’t understand how downgrades work, they might be under the impression that you were trying to upcharge them for your services. It might sound ridiculous, but that’s why you have to educate them on their own insurance benefits. It is also a good idea to explain why you use the tooth-colored (composite) filling over the amalgam (silver) filling. 

Dive deeper into how to calculate dental patient out-of-pocket cost in our Learning Center.

3. Lack of proper insurance verification 

Both of the previous errors we’ve gone through come right back to the over-arching importance of insurance verification. 

When you properly verify a patient’s benefits, you are getting a full breakdown of how their policy works, what types of deductibles, downgrades, waiting periods, maximums, limitations, exclusions, and any other notable rules. This also includes remaining maximum or deductible amounts you’ll need to explain to the patient. 

The patient may not know that their benefits are out of date, maxed out, or that the procedure they require is not covered by insurance. It’s your job to communicate this information to them before their procedure. 

This prevents any surprises when it comes to what the patient will pay you.

If you properly use your insurance verification software, you will see fewer mistakes on patient out-of-pocket costs

Calculating patient out-of-pocket costs might sound scary, especially with all the math we laid out above in this article. But your software can help you with this. And if you use it properly, you won’t have as much trouble with deductibles or downgrades. 

By properly verifying insurance you will build a healthy relationship with the patient. You’re letting them know the reality of their coverage, so they can decide if they want to proceed with the procedure or not. 

You’re also going to see fewer denials on your claims. When you properly verify insurance, you’re going to be able to confidently submit claims, knowing you’ve made sure all of the patient and insurance information is correct ahead of time. 

This will lead you to that ideal zero-balance system where the claim is clean. It’s submitted, reimbursed, and posted all in a timely manner with no hiccups. 

Ready to confidently collect from your dental patients and insurance companies?

When you properly calculate the patient’s estimated out-of-pocket cost, you’re giving your patient a better experience at your dental practice. The dentist isn’t always fun to go to, but because you’ve created this trust when it comes to their bill, they’re likely to return with a smile. 

Avoid these mistakes through education and training on insurance billing. It can help you feel confident when you give your patients an estimation of how much their procedure will cost.

Dental ClaimSupport is a great tool for improving the overall patient experience by giving your team more time in the day to do things like calculate patient costs, or talk to your patients about their benefits. 

To learn more about how outsourcing can create a better patient experience, visit our Learning Center.