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11 Cards in this Set

  • Front
  • Back
Sources of Service Cost data, C
 historical experience (best)
 Dental cost databases (ADA surveys)
Advantage of using plan’s own experience data:
 Awareness of any problems with the data
 External data doesn’t reflect the same:
 demographics
 fee levels
 underwriting
 claims adjudication / UM
But plan’s own experience is not usable for:
 new plans
 small plans
 new geog. area or market segment
ASoP #23 requires making sure data is:
 appropriate (adjust it as necessary)
 reasonable
 complete
Sources of Utilization data, U
 national databases
 rate filings of other carriers
 third-party administrators or reinsurers
Characteristics Of The Plan That Affect Claim Cost
The Covered Benefits
 Exclusions (Missing tooth, Cosmetics)
 Is preventive care encouraged?
 In-network usage incentives
 Interaction with the medical plan

The Cost-Sharing Provisions
Cost-sharing reduces both cost per service (C) and utilization (U).
 Deductibles
 lower plan costs; no effect on utilization.
 stand-alone deductible lowers costs more than integrated deductible
 cause leveraging.
 Coinsurance; Copays
 lower plan costs and utilization.
 Type III services have much higher coins/copays than Type I or II.
 Maximum Coverage Limits
 Annual & lifetime
 lowest for orthodontics.
 Maximums dampen the impact of claim cost trend.

See numerical example in chapter notes
The Provider Reimbursement Method
Most expensive
 Fee-for-service
 Dentists can balance-bill
 This increases the effective cost-sharing %
 Fee schedule
 maximum reimbursable amount for each service type.
 No balance billing allowed.

Disadvantages to the Ins Cpy:
 dentists will raise their fees to the maximum. (limiting the cost savings)
 schedule has to be updated periodically
 causes spikes in cost trend
 doesn’t limit utilization; in fact, causes “churning”
 Capitation
Least expensive

See chapter notes for an example of computing a dental capitation rate
Capitation Adjustments
 Utilization will be lower under capitation than Ffs
 The Net capitation rate is adjusted for:
 Dentist’s patients’ ages/sex
 geog. area
The Care Management (UM) techniques used
 Make sure patients receive appropriate level of treatment at reasonable costs.
For Ffs dentists:
 Prevent overtreatment or overbilling
 Preauthorization
 must be enforced in order to save costs.
 Provider Profiling
 terminating overly expensive dentists

For Capitated dentists:
 Prevent undertreatment of patients.
 Capitated dentists control their own utilization.
 Enforce quality measures.
Characteristics of the Insureds That Affect Claim Cost
(Combined with the list entitled “Underwriting Features For Group Dental Insurance” in the notes to Chapter 8)
Additional Factors Affecting Claim Cost
Antiselection Controls In Use
(See the list entitled “Antiselection Controls For Dental Insurance” in the notes to Chapter 8)

Multiple Option Settings
 Multiple Options cause antiselection  higher costs.

Key drivers of Selection in a multiple option environment
 Differences in the benefit richness
 Differences in Costs to ee
 Orthodontics covered under only one option
 access to the ph’s current dentists

To reduce the antiselection in a multiple option environment, use:
 Underwriting loads
 Min. Participation requirements
 “Sole Carrier” requirement

The Rating Method (Experience rating vs. Pooling)
 Exp rating more common for Dental than for Medical
 b/c claim costs lower and more credible
 Partial pooling is still needed if:
 high turnover
 low participation rate