Welcome to the new world of dental insurance. The days of
being able to contract only with the insurance company directly
are gone. With the exception of Delta, every major insurance
company now has some sort of shared network agreement for at
least a portion of their networks. Some offices may find third
parties a good fit, others are being blindsided by them. One area
of the country may find superior fee schedules with a third party
while direct contracts may come in higher in others and different
business models within dentistry vary in how useful or
harmful a third party administrator could be.
As the insurance landscape continues to change rapidly, you
and your staff must have clarity and predictability with your contracts
so that you have control over what you accept. When
patients call to ask if you are in-network, your staff must have a
clear “yes or no” answer to give and that is becoming an increasingly
challenging, if not impossible, task.
What are Third Party Administrators and How Do They Work?
There are multiple national and regional third–party administrators,
repricers, hybrids. Some of the more recognizable national
names are DenteMax, Connection Dental and Maverest, with
smaller networks like Premier Group and First Dental Health
being found in certain parts of the country, but not necessarily all
states. A third party administrator is not an insurance company.
Insurance companies contract with third party admins so that their
company is also considered in-network under that third party’s
contracts. Dentists also contract with the third party to be participating providers for the companies falling under the third
party’s “umbrella.” This means that a dentist may sign a single
contract with a third party administrator and then be a participating
provider for dozens of different insurance companies all
with that single contract.
If you are seeking extensive PPO participation and the third
party rates are higher than you can obtain with a direct contract,
you may choose to accept a third party for more broad participation.
For offices contracted with most PPOs, the goal is to be innetwork
with most companies anyway. If a third party provides
higher rates, then it’s an option that may fit well assuming the
third party admin’s fee schedules are higher than you could get
with a direct, negotiated contract. Participation can make sense
if it’s being done strategically, but it’s important to understand
exactly how they work and there are some major downsides.
A direct contract with an insurance company takes priority in
terms of what fees your office is paid. This means that if you are
contracted directly with a particular company and that same company
shows up on the third party administrator list that you are
also contracted with, then the direct contract fees are the ones that
apply. The third party administrator then picks up companies on
its list that you do not already have a direct contract in place with.
Example: To keep it simple, let’s say you add “ABC” as a third
party admin and they have a list of six companies that fall under
In this case, let’s also say you have a contract with Aetna already
in place. By adding “ABC” as a third party administrator, you
would then become in-network with the companies listed under
their umbrella; but because you already have a contract in place
with Aetna, then that direct contract would override the ABC fees.
The rates you signed directly with Aetna would still be the fees you
would be paid for your Aetna patients, ABC would pay their rates
on the other companies listed. Our example shows only six companies,
yet you could be getting pulled in with 100 or more with
a single third party contract. Confused yet?
What are the Cons of Third Party Admins?
If an office is fee-for-service or has had lower PPO participation
and is adding PPOs, then the addition of a third party admin
pulls in massive PPO participation with a single contract. The list
of participation on third party administrators is not as clear as the
listings may lead you to believe. Be aware that just because a company
is listed on a third party administrator list does not mean all
patients with that insurance are going to be considered in-network.
Let’s use Connection Dental and MetLife just as an example.
You may have a MetLife fee schedule that you are unhappy with
and a Connection Dental fee schedule that’s higher than your
MetLife fee schedule. You look at your Connection Dental listing
and see that Metlife is on it. The logical assumption would be to
question if you can drop your MetLife contract and instead funnel
those patients to your higher paying Connection Dental fee schedule
instead. What’s not clear on third party listings is that not all
networks with that company are included. In the above example,
MetLife’s newer PDP+ network is included but not the full PDP
network (which you must contract with directly with MetLife to
obtain). You wouldn’t know that based on the list of participating
companies that are being distributed by third party administrators
with their contracts. Cigna is listed on the third party administrators
listing too but it’s Cigna Radius network, not Core, and that
difference is not specified. Connection Dental and DenteMax are
both clear on their publications that they cannot guarantee that an
individual carrier will pick the doctor up. Each carrier makes their
own individual decision, so a doctor could sign up for a third party
because they want to reach a particular carrier group but find out
that the carrier doesn’t add them (and doesn’t have to). Just because
it’s on the list doesn’t mean you’re guaranteed to get them.
Be aware that these third party agreements can now harm your
ability to negotiate directly with the insurance companies as well.
For example, let’s say you are contracted with Cigna and you are
also contracted with Connection Dental. Cigna may then limit
their increases to you when negotiating new fees because they
know if you drop your Cigna contract you’ll get picked right back
up again by Connection Dental and still be in-network anyway.
Whenever possible we prefer to recommend direct contracts for
this reason. There are many insurance company reps who are
working hard to keep that direct contract option attractive and are
as frustrated by what they are seeing with the third party influence
as we are. If we can get a good relationship for our clients directly
with that insurance company rep and keep that direct contract in
place with fee schedules that are as good if not better than the third
party has in that area, it’s always our preference.
Even more confusing is that many contracts between the insurance
companies and the third party administrators are not national
and that is not being accurately communicated to dentists. What
should be causing a huge uproar with dentists is that there are
some agreements where the dentist does not get listed on the insurance
company’s website and the patient is not even considered in network yet the dentist is being required to give a discount. For
example, if your office was contracted with Maverest you’d see on
the list that Stratose was included and listed Humana as one of the
companies being utilized. But guess what? Humana patients are
not considered in-network, the dentist is not on the Humana website
and to top it off, some Humana plans have zero out-of-network
There are many contracts where dentists are giving a discount
to an entire network of patients who are not even considered innetwork
with their benefits and the dentist is getting no marketing
benefit back in return. Dentists who understand this are left
scratching their heads as to why they would sign up for a contract
where they give a write-off with absolutely no benefit to the dentist,
yet it’s happening on a very broad scale. Even companies that
allow an opt-out process with some of the carriers were getting
very poor feedback about how it can take months to get pulled out
after the request is put in. It’s up to dentists to demand some
accountability so that the contract is transparent in what is being
provided by both parties.
What Needs to Happen and What Do Dentists
Need to Demand?
1. Third party administrators need to require the insurance
companies who are utilizing them to list on a state-bystate
basis which companies will be picked up and exactly
which networks are included. In other words, if you are in the
state of Washington and sign up with a third party administrator,
that administrator should be required to have a list specific
to that state that the dentist can print out, hang at the front
desk and know exactly who is included. If a patient calls your
office and says “I have “X” insurance, do you take it?” your
staff should be able to respond with a clear “Yes” or “No”
answer, not scratch their heads wondering if the third party
picks up all companies in that state and if so, if it’s even that
patients particular network. Some third party administrators
are publishing a list of companies that are participating that is
misleading. If they’re going to list MetLife then they need to
specify it’s PDP+ only. If they’re going to list Cigna they need
to specify it’s Radius network only, not the Core network.
Dentists have a right to know exactly what they are signing up
for with an accurate listing with any contract they sign, and
right now that is not the case.
2. The agreements with the third party administrators need
to come with a guarantee that the dentists will also be listed on
every insurance company’s website as a participating provider.
Although many of them are, there are exceptions which means
the dentist is giving a PPO discount to the patient with
absolutely no marketing benefit being provided by the insurance
company. Imagine signing a contract, giving a discount to a new
patient and it turns out they couldn’t have possibly found your
office from being listed as a PPO provider because you’re not
even listed on their website. You’re getting all the downside of
PPO participation without any of the supposed benefit.
3. Third party agreements may or may not be a good fit for a
practice but dentists need to base their decision by being able to
look at a contract that’s being clearly represented and has transparency.
There are agreements that benefit the insurance company,
the third party and employers but are of absolutely no benefit to
the dentist, and that’s the part that’s not being clearly represented.
Insurance companies want to show that they have a huge network
of dentists available as they market their policies to employers and
third parties are a way to do that, but dentists need to ensure that
they are getting marketing benefit back. Some of these agreements
are just smoke screens to sell more policies without any benefit to
Dentists need to understand that there are now multiple ways
to contract for the same patients. You can be paid differently on
the exact same production with the exact same patient depending
on what contracted rate you agreed to. The days of haphazardly
signing up for plans with the assumption that you are simply either
in or out of network are gone. This is now a part of practice ownership
that needs to be handled strategically and with a clear
understanding of knowing exactly what you are getting back out
of any contract that is signed. This is even more important if
you’ve been a fee-for-service oriented practice and are looking at
adding participation for the first time with new contracts.
If you have questions about a particular contract relationship
we strongly recommend you contact the carrier in question directly,
as well as any third party administrator and obtain their direct representation
of their plan. There are many knowledgeable reps who
will take the time to explain their program in detail but dentists
must begin asking questions to ensure a contract fits their business
model. Approach your contracts remembering that you, as the dentist,
need to be the one in control of what you agree to for your
practice. Don’t get swept away with lower rates and ambiguous
contracting that puts someone else’s benefit over yours!