Lie #3: Insurance Companies Have All the Power

This is our third post in the Biggest Lies in Dentistry series. Things the dental industry repeats to itself until they sound true. See the full series here.

One of the biggest myths in dentistry is that insurance companies have all the power.

Why It Feels True

I understand why people believe it. On a daily basis, insurance companies tell you what they’ll pay, what they won’t pay, that the claim is too old, that they never received it, that they need more information, that they aren’t negotiating fees this year or that the appeal period has expired. After hearing “no” enough times, most offices simply stop asking questions. They accept that whatever the insurance company says must be true.

It isn’t.

They Know the Rules Better. That Is Different.

Insurance companies don’t have all the power. They simply know the rules better than you do. That’s a different problem because it has a different solution.

A Heavily Regulated Industry

Insurance companies don’t operate somewhere off the coast of international waters where no laws apply. They’re one of the most heavily regulated industries in the United States. They have contracts with employers. They have contracts with patients. They have contracts with you. They answer to state insurance regulators and, depending on the type of plan, sometimes federal regulators as well. There are laws governing how they process claims, how they communicate with providers and, in many states, how long they have to pay, deny or request additional information on a claim.

Funny how they always seem to know your deadlines. Somehow they rarely bring up their own.

Before anyone starts sharpening their pencils to write me a letter, every state is different. Some have stronger Prompt Pay laws than others. Some employer-sponsored plans are governed by federal law instead of state law. This isn’t legal advice. It’s something much simpler.

Stop assuming insurance companies are right just because they said it with confidence. That’s really the point of this article. Knowing the rules changes the conversation.

“The Claim Is Over a Year Old”

Take one of the most common examples I hear. “The claim is over a year old. We have to write it off.” Really? According to whom? The contract? Your state’s insurance laws? Something everyone knows?

Timely Filing Is Not Everything After Filing

One of the biggest misunderstandings I see is offices confusing timely filing with everything that happens after the claim has already been filed. Those are two completely different things.

Timely filing tells you how long you have to get the original claim to the insurance company. Once you’ve done that, you may be dealing with payment deadlines, requests for additional information, appeals, reconsiderations or contractual obligations. Those aren’t timely filing issues anymore. They’re different issues with different rules. That’s exactly what I mean when I say insurance companies often know the rules better than you do.

“We Never Received the Claim”

Here’s another example. “The insurance company says they never received the claim.” Maybe they didn’t. Or maybe they did. The question isn’t what they said. The question is whether you have the documentation to prove otherwise.

Sending a claim electronically and having the claim accepted are not the same thing. If the clearinghouse rejected the claim and nobody noticed, that’s on the office. If the clearinghouse accepted the claim and the insurance company later says they never received it, now we’re having a very different conversation because one of us has documentation.

And guess which one I’d rather be?

“We’re Not Negotiating Fees This Year”

Then there’s one of my personal favorites. “We’re not negotiating fees this year.” Wonderful. I’m happy they shared their opinion. Now what does your contract say? Because that’s the part I’m interested in.

Dentists sign PPO agreements worth hundreds of thousands of dollars over the life of the relationship and never actually read them. The insurance company has. In fact, they most likely wrote it. Why are we surprised they know it better than we do?

The Thirty-Seven Dollar Problem

Knowing the rules also changes the way you look at underpayments. Let’s say an insurance company underpays one of your claims by thirty-seven dollars. Are you going to pay someone twenty-five dollars an hour to sit on hold for forty-five minutes arguing over thirty-seven dollars? Most offices won’t. Not because the insurance company is right. Because they’re busy. So, they write it off. Tomorrow another claim is underpaid. Then another. Then another. By the end of the year the office hasn’t written off thirty-seven dollars. They’ve written off thousands.

Now multiply that by thousands of dental offices across the country.

Enough small underpayments eventually become very large savings, because providers simply don’t have time to fight every one of them. That’s not a dental problem. That’s basic economics.

Questions Worth Answering Honestly

Now ask yourself a few questions. Do you compare every payment to your contracted fee schedule, or do you simply assume the insurance company paid correctly? Do you know if, or when, your state allows interest to accrue on late payments? Do you know the difference between a filing deadline and an appeal deadline? Do you know what rights your provider agreement gives you? Do you know when it’s appropriate to file a complaint with your state’s Department of Insurance or Insurance Commissioner? Have you ever done it? Have you ever had an attorney file suit against an insurance company on your behalf? I have. They paid.

Not because I enjoy fighting with insurance companies. I’d much rather spend my day doing something more exciting. Watching paint dry comes to mind. I did it because contracts matter. Laws matter. Accountability matters.

They Are Not Untouchable

The biggest mistake I see dentists make isn’t believing insurance companies are powerful. They are. The biggest mistake is believing they’re untouchable. They’re not. They have contracts. They have laws. They have deadlines. They have regulators. They have consequences.

The insurance company didn’t take your power. You handed it over the moment you stopped learning the rules they have to play by.

Learn your contracts. Learn your state’s insurance laws. Learn your rights. Once you do, the conversation changes. You’re no longer asking the insurance company for permission. You’re asking them to honor the agreement they signed. That’s a very different conversation.

Part of The Biggest Lies in Dentistry. Read the full series here.

Smile Care Claims handles billing, insurance verification, and A/R management so your team doesn’t have to. If you’d like to find out whether we can help, book a consult with one of our billing specialists.