FUTURE OFDENTISTRYcontribution to purchase more extensive insurance
coverage. The employees are the owners of the poli-
cies they purchase. To be workable, the employer
contribution would not be taxed as employee
income. Several defined contribution models, rang-
ing from individual plans to managed competition
have been described.
Direct Reimbursement:
Direct reimbursement is a funded program in
which the individual is reimbursed based on a per-
centage of dollars spent for dental care provided,
and which allows beneficiaries to seek treatment
from the dentist of their choice.
Flexible Spending Account:
Flexible Spending Accounts allow employers and
employees to use pretax dollars to pay for certain
personal health care expenses that are not covered
by medical or dental insurance. Funds are reim-
bursed to the employee for health care (medical
and/or dental), dependent care, and/or legal expens-
es, and are considered a nontaxable benefit. This
includes insurance cost-sharing expenses associated
with deductibles and co-insurance. Employee reim-
bursement accounts are primarily funded with
employee-designated salary reductions.
Indemnity Plan:
An indemnity plan is a dental plan where a third
party payer provides payment of an amount for spe-
cific services, regardless of the actual charges made
by the provider. Payment may be made either to
enrollees or, by assignment, directly to dentists.
Schedule of allowances, table of allowances, or rea-
sonable and customary plans are examples of
indemnity plans.
Managed Care:
Refers to a cost containment system that directs
the utilization of health benefits by:
a. Restricting the type, level and frequency of treatment;
b. Limiting the access to care; and
c. Controlling the level of reimbursement for services.
There are two general forms of managed care.
Preferred Provider Organizations and Dental Health
Maintenance Organizations. Some plans are hybrids
of the two forms.Preferred Provider Organization (PPO):A PPO is a formal agreement between a purchas-
er of a dental benefit program and a defined group
of dentists for the delivery of dental services to a
specific patient population, as an adjunct to a tradi-
tional plan, using discounted fees for cost savings.
The panel or network of providers is limited in size
and usually has some type of utilization review sys-
tem associated with it. The discounts from usual
and customary fees vary greatly usually ranging
from 15% to 30%. In this paper discount programs
of 5% common to some Delta Dental and Blue
Cross "participating" provider plans are not consid-
ered preferred provider organizations.Dental Health Maintenance Organization
(Capitation):A capitation program is one in which a dentist
or dentists contract with the program’s sponsor or
administrator to provide all or most of the dental
services covered under the program to subscribers in
return for payment on a per-capita basis. These
plans place providers at risk for some medical (den-
tal) expenses. In dentistry, the risk is usually for
basic services (e.g., diagnostic and simple restora-
tions). More expensive elective services are usually
provided under a discounted fee-for-service arrange-
ment with substantial patient cost sharing.Medical Savings Accounts (MSA):The MSA is a tax-exempt account, similar to an
Individual Retirement Account (IRA) that is used to
pay for routine eligible medical expenses. Moneys
not spent in the account can be rolled over to the
next year’s account or put into an IRA. It is a form
of defined contribution in which contribution may
come from employers, employees or public funds.
In addition to the MSA, a catastrophic health insur-
ance policy is required as a safety net to protect
against very high costs.Out-of-Pocket:This refers to the payment for dental services by
patients with their own funds. For individuals with-Financing of and Access to Dental Services