Accidental Insurance Fraud?

It’s Easier Than You Think. Another Reason to Know What’s in Your PPO Contract.


By Shelley DeGroff, Founder of PPO Advisors

It’s easier than ever for a well-intentioned dental practice owner to inadvertently commit insurance fraud. To avoid the problem, practice owners must know what’s in their PPO contract, or risk the repercussions. Learn more here.

Too many practice owners these days don’t know what’s in their PPO contract. The complexity of the agreements makes it hard to understand the basic terms you’ve agreed to when signing your PPO contract. But a lack of knowledge can lead to serious consequences, such as inadvertently committing insurance fraud. How could someone not know they committed insurance fraud? It’s easier than you think.

The problem is that insurance companies don’t do a good job of making the rules clear to practice owners, and most dental owners don’t take the time to learn them. Here are the most common ways dentist can commit fraud without realizing it.

Co-pay Fraud

Let’s say you have a PPO patient who gets a crown; their insurance covers 50%, and the patient pays 50%. As the practice owner, you decide to give the patient a $100 discount on their share of the bill – maybe they’ve been a loyal customer, or maybe it’s a single mom who doesn’t have much money – the reason is irrelevant. By giving your patient a discount, you have committed co-pay fraud unless you also give the same discount to the insurance company.

In this situation, your patient would also be guilty of fraud. When they signed up for dental insurance coverage they agreed to certain terms as well. If they accept a discount, they are not fulfilling their agreement to pay 50% of the costs.

Discount Fraud

Discount fraud is similar to co-pay fraud. In this scenario, we’ll say you are part of a PPO network but are seeing a patient without dental insurance who needs to be treated for periodontal disease. The treatment will cost the patient several thousand dollars. Since the patient doesn’t have insurance, you consult with your office manager and decide to give them a 10% discount. You might think the decision is within your rights, but you would be wrong. This action constitutes discount fraud unless you also give your insured patients the same discount. Your PPO contract states that you have to offer discounts to your patients equally, not discriminating against patients with insurance.

NPI Fraud

In this scenario, your practice is part of a PPO and you’ve just hired a new associate dentist. The new associate must be credentialed by the insurance company before they are considered part of the PPO network, a process which can easily take four to six months. Until the process is complete, the new associate dentist can see PPO patients during this time but all insurance claims for the new associate dentist must be submitted as out-of-network, even though the practice is part of the PPO network and the patients are paying their premiums. The practice needs to inform the patients they won’t receive in-network benefits when the associate treats them, usually causing higher co-pays for the patient. So far, not fraud has been committed.

Fraud occurs when a practice tries to get around the rule by submitting the new associate dentist’s claims under another credentialed dentist’s NPI number. If they do that, they’ve committed NPI fraud.

Know the Rules

All of these rules are geared towards protecting the interests of the insurer at the expense of the practice owner. It’s up to the dental practice owner to know them or risk the repercussions, which could include getting audited, losing their license, or in the worst-case scenario, going to prison.

Since insurance companies don’t volunteer the information, I strongly encourage you request the processing manual from the insurer. The manual includes everything you need to know about the rules for submitting claims. Insurers won’t send it to you automatically, so you need to ask for it.

PPO Advisors can’t change the rules for what constitutes fraud, but we can make sure you understand what’s in your PPO contract. If you have questions about your PPO agreement, contact us today.