Breakdowns and Estimates: Are You Using the Correct Fee Schedule? (INN, UCR, MAC)

Insurance can be complex and highly detailed on a good day, and therefore easy to get tripped up even for the most experienced dental insurance coordinators.  A pitfall we have seen of late occurs when offices are compiling their breakdowns and estimates and inadvertently use an incorrect “fee schedule.”  In this article, I want to talk about the various “Fee Schedules” and their relationships to each other, highlighting where there are sometimes points of confusion which can result in an inaccurate estimate.  Inaccurate estimates create surprise bills for patients and then no one is happy.

Let’s start by reviewing the purpose and makeup of each of these “rate schedules” and see if we can provide additional clarification that may be helpful:

Full Fee / Office Fee 

This is your dental office’s established fee structure, which details the rates you currently charge your patients for services rendered, regardless of insurance.

UCR (Usual, Customary, and Reasonable)

UCR is purely an insurance term, and it is very often misused.  UCR is the fee schedule an insurance company will apply to out of network (OON) claims.  The UCR is unique to each insurance company regionally, and often even by zip code.  

A common mistake is to confuse UCR and Full Fee.  Full Fee only applies to the office, and UCR only applies to insurance.

Note: 

If UCR and Office fees are the same number, the office should really think about raising their fees, as UCR is often derived from an average of submitted fees, minus a secret formula the insurance company uses.  To be equal, it usually means the office fees are well below average for the area.

If you want a non-biased fee comparison, use the free resource: https://www.fairhealthconsumer.org/

INN or In-Network 

If your office is “In-Network (INN) with a specific insurance carrier(s) it is because you have chosen to join their insurance network and signed a contract, agreeing to a discounted fee schedule for your patients who carry one of their insurance plans.    It is very important to save both the contract that was signed as well as the fee schedule that was negotiated for each insurance carrier you are “in-network” with.  INN offices will often need to reference back to that fee schedule.  It is also helpful to load the fee schedule into your practice management software for easier reference.

MAC (Maximum Allowable Charge or Maximum Approved Charge)

MAC is a fee schedule developed by each insurance carrier for a subset of their insurance policies, specifically plans with lower premiums.  MAC plans are developed and sold to employers who can’t afford (or choose not to provide) a higher level of dental benefit/premium payments for their business/employees.  The number of MAC policies across the US is currently growing.

A MAC fee schedule is therefore a lower-priced schedule that is below both UCR and the normal in-network (INN) fee schedules.  A MAC fee schedule will apply to both in and out of network situations.  By way of comparison, MAC for OON offices often results in insurance reimbursing around half of the UCR fee table.  Whereas with INN offices, the MAC fees are basically a downgrade across the board for all services, leaving the patient with a higher co-insurance. 

Common Mistake Involving EOBs

If your office is In-Network with a given insurance carrier, then their discounted fee schedule is the only one you collect on. If one of your patients holds a MAC plan with that carrier, it only means insurance is reimbursing a smaller amount of the INN fees for that claim and the patient therefore pays more.  It should not affect the amount that your office is to collect in total.

Unfortunately, many EOBs come through with errors and mistakes for both MAC and downgrades.  This is why it is so important to understand EOBs are not always perfect.

If you find EOB errors with either downgrades or MAC, remember you signed for a fee schedule, not the low-end reimbursement the patient’s policy is giving.  Follow the fees you know, and not the incorrect adjustments on the EOB.

Breakdowns and Estimates

The rates for MAC, UCR and INN fee schedules can vary widely, and as a result significantly affect estimates, for both in and out of network cases.  The breakdown of fees goes as follows:

Full Fee > UCR > INN > MAC

And because there are an increasing number of MAC plans being sold; it is particularly important when obtaining a breakdown of benefits to ask whether insurance will reimburse on MAC, UCR or INN fee schedule to help avoid any surprise bills for the patient later.  This should be always asked when reviewing an insurance verification form or when asking questions during a breakdown call with insurance.

Patient Concerns

If the correct fee schedule is utilized when preparing an estimate, and the EOB is carefully scrutinized after the insurance review & payment decision, then your office should have fewer problems with estimates.   If the estimate has been done properly, and then the patient has a concern/complaint with the lack of reimbursement; the best solution at that stage is to redirect their complaint to their employer’s HR department.  The HR department is the insurer’s true client and the only one that can clarify benefits and has a say in plan benefits for next year.