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Fee capping: Why some PPO dentists can charge their full fee for non-covered services

October 28th, 2021 | 5 min. read

Fee capping: Why some PPO dentists can charge their full fee for non-covered services Blog Feature

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When it comes to insurance rules, the details, fine print, and stipulations that impact your practice are never-ending. It’s important to keep up with these terms. One of those confusing terms is fee capping.

Fee capping is an important term to know so that you can bill patients accurately and charge your full fee whenever it is permissible.  Fee capping comes into play if your patient’s insurance does not cover the procedure your dentist is performing as an in-network provider. At Dental ClaimSupport, we’ve talked to several dentists through the years who don’t understand fee capping and how it applies to their own practice.

In this article, you will learn why it’s important to know what fee capping is and how, or if, it can apply to your patients’ insurance plans. Knowing this information will help you know the correct fee to charge and remain compliant with insurance laws. 

What is fee capping?

Fee capping refers to a Preferred Provider Organization (PPO) being able to control your fee that you're allowed to charge a patient for a non-covered service. 

When a patient comes in for a dental procedure and their insurance plan does not cover it, fee capping places a limit on how much you can charge that patient.

How fee capping applies to PPO dentists

In a PPO contract, you agree to not bill the patient above the agreed-upon maximum allowable negotiated fee schedule. Whether you, the PPO dentist, are subject to fee capping depends on what type of plan and any state laws that may or may not apply. 

We will discuss these laws in the next section of this article.

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Why does fee capping exist in dental insurance?

Fee capping exists to give insurance companies a way to offer savings to make their dental plans more appealing to patients. Fee capping allows insurance companies to claim that their insurance plan will save the patient money. 

However, it's the dentist who bears the financial impact of the patient's savings, while the insurance payer or employer assumes none of the financial downsides.  

When does fee capping apply? Some states have passed laws to stop insurance companies from limiting what dentists can charge. 40 states have passed legislation to prevent insurance companies from imposing fee capping for non-covered services.  

Not all plans are subject to state laws that prohibit fee capping. State fee-capping laws apply only to fully insured plans sold in that state. About 35% of plans in the average dental practice fall under state laws. Self-funded insurance plans and federal plans follow ERISA rules, which is federal law instead of state law.

For example, if you’re in a state that has the fee capping law, and your patient has a self-funded plan, your office may be subject to any insurance company fee capping that limits how much you can charge the patient for a non-covered service. 


Learn more about the difference between self-funded and fully-insured dental plans in our Learning Center.


What is the non-covered services legislation and how does it apply to the dental practice?

Let us further explain.  

As we said, there are currently 40 states with fee capping legislation. Fee capping legislation prevents a dental PPO plan from controlling your fee for non-covered services, allowing you to charge your full fee, right? If your state has a fee capping (non-covered services) law, this law applies only to fully insured plans sold in your state. 

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For states with fee capping laws, the fee may be controlled depending on if and how the state defines a covered service.  If your state has a fee capping law (non-covered benefit legislation) but defines a covered service as “a service in which benefit would be available,” but a limitation of the plan was applied resulting in no payment or payment of an alternative benefit, then the PPO can control your fee because the service is considered a covered service, it was just not reimbursed. 

A few examples are: 

  • A waiting period limitation applies to the claim, resulting in no payment
  • The patient has met their annual benefit maximum resulting in no payment.  
  • A patient receives three prophylaxis treatments in one benefit year, but the plan only pays for two. The frequency limitation is applied to the third prophylaxis since it is a covered service.

For each of the above examples, a plan will control your fee in these instances. The patient’s financial responsibility is that of the contracted fee, not your full fee submitted or standard fee.

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Want to learn more about how dental insurance laws can affect your practice?

Read each patient’s explanation of benefits carefully to ensure you are charging your PPO patient the correct fee. 

Do not assume with your state’s fee capping legislation that you can always charge the patient the full fee for a service. 

These laws can be confusing. And they change! So stay up to date with dental insurance laws and regulations by enrolling in our dental insurance billing courses at Dental Claims Academy, where experts on these matters are just a phone call or message away to answer any questions you might have.

Schedule a call with one of our RCM experts.

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