Position on Content of Explanation of Benefits (EOB) Statements
An EOB is a written statement to a beneficiary from a third-party payer, after a claim has been adjudicated. The EOB indicates which benefit(s)/charge(s) are covered or not covered by the dental benefits plan. EOB language should be written in a clear and concise fashion to clearly communicate the benefits determination and payments made to beneficiaries and providers alike.
Unfortunately, EOB language can create confusion between patients and providers which can interfere with the dentist/patient relationship. EOB language should provide information that clearly delineates the benefit limitations of the plan and any balance due to the provider by the patient. It should not contain language that may disparage the dentist or otherwise wrongfully interfere with the dentist/patient relationship.
The ADA urges dental benefit payers to consider the following principles when developing EOB statements sent to patients and dental offices.
1. Standards for Dental Benefit Plans (1988:478; 1989:547; 1993:696; 2000: 458; 2001:429) The extent of any benefits available under the plan should be clearly defined, limitations or exclusions described, and the application of deductibles, co-payments and coinsurance factors explained by the third-party payers to patients and employers using terms that a patient can easily understand. The patient should also be informed of his or her financial responsibility to the dentist for payment, as appropriate. In those instances where the plan makes partial payment directly to the dentist, the remaining portion for which the patient is responsible should be prominently noted in the EOB provided to the patient.
2. Explanation of Benefits Statement and Identification of Claims Reviewers (1985:584; 1990:536; 1995:610) The following or similar statement should be included in communications from a third-party payer or other benefits administrator which attempt to explain the reason(s) for a benefit reduction or denial to beneficiaries of a dental benefits plan, “Any difference between the fee charged and the benefit paid is due to limitations in your dental benefits contract. Please refer to the pertinent provisions of your summary plan description for an explanation of the specific policy provisions which limited or excluded coverage for the claim submitted.”
3. Explanation of Benefits Statement and Identification of Claims Reviewers (1985:584; 1990:536; 1995:610) The following information should be reported on the EOB reporting the benefit determination to the beneficiary,
a. the treatment reported on the submitted claim by ADA procedure code numbers and nomenclature; and
b. the ADA procedure code numbers and nomenclature on which benefits were determined.
Dental Procedure Code Changes (2001:433) When a third-party payer, or any other entity adjudicating a dental claim, changes the submitted dental procedure code for internal processing purposes, all outgoing transactions, including EOBs, should show the originally submitted dental procedure code to prevent the dentist and the dental plan from having inconsistent records of the treatment rendered.
4. Identifying Dental Consultants (2002:000) The carrier can facilitate the claims process for all involved by providing the name and toll-free telephone number of the individual who is acting on behalf of the carrier in all correspondence between a third-party carrier and the patient regarding the patient’s dental claims. This may include the degree and license number of the licensed dentist or the identification of any other individual who makes the final decision involved in accepting or rejecting the dental claim.
5. All EOBs should include information on whether the dental benefits plan is self-funded or fully insured. This information is necessary so that beneficiaries can distinguish that state insurance laws may apply for fully insured plans and that ERISA laws may apply to self-funded plans.
6. Limitations in Benefits by Dental Insurance Companies (1997:680) Since the term “usual, customary and reasonable” is often misunderstood by patients and tends to raise distrust of the dentist in the patient’s mind by suggesting the dentist’s fees are excessive, the American Dental Association urges third-party payers employing this terminology to substitute the term “maximum plan allowance” in patient communications and EOB statements.
In addition to stating the maximum plan allowance, it is recommended that the following language or similar language can be used to indicate usual, customary and reasonable (UCR) fees have been applied.
“Your plan provides benefits for covered services at the prevailing charge level, as determined by (name of carrier) pursuant to the terms of your contract. (Carrier’s) determination of the prevailing charge does not suggest that your provider's fee is not reasonable or proper."
7. Statement on Determination of Usual, Customary and Reasonable Fees (1991:633) The legitimate interests of insured patients are best served by use of precise, accurate and publicly announced methodologies for determining ranges of fees for all dental services. It is recommended that carriers:
- establish standard terminology for identifying benefits in policies, Explanation of Benefits and other descriptive materials
- establish a standard screen setting method (such as percentile) and/or require a policy statement, which describes the overall percentage of services (percentile) the policy should allow in full
- provide a description of the frequency of updates and/or the basis for screen development
- provide a description of how region and specialty were considered in setting the Customary Fee Screens
- use sufficient data when determining Customary Fee Screens (whether from claims experience or other sources)
- demonstrate how they have set their screens and how they have determined if sufficient data were employed
9. All EOB statements must include an American Dental Association copyright notice for the dental procedure codes published in Current Dental Terminology. Pursuant to the CDT License, all third party payers are required to use one of the copyright notices printed below on all Explanation of Benefits statements:
- The Code on Dental Procedures and Nomenclature is published in Current Dental Terminology (CDT), Copyright © American Dental Association (ADA). All rights reserved.
- Current Dental Terminology (CDT) © American Dental Association (ADA). All rights reserved.
Clear and accurate communication between patients, providers and dental benefit payers is essential to the delivery of oral health care. Explanation of benefits statements written in this fashion can help to strengthen and support that message.