Nonscheduled Plans | Dental Plan Design

Sometimes referred to as comprehensive plans, nonscheduled plans are written to cover some percentage of the "reasonable and customary" charges, or the charges most commonly made by dentists in the community. For any single procedure, the usual and customary charge typically is set at between the 75th and 90th percentiles depending on the administrator. (The trend is toward the lower number.) This means that the usual and customary charge level will cover the full cost of the procedure for 75 percent to 90 percent of the claims submitted in that geographical area.

Nonscheduled plans generally include a deductible, typically a calendar-year deductible of $50 or $75, and they reimburse at different levels for different classes of procedures. Preventive and diagnostic expenses typically are covered in full or at very high reimbursement levels. Reimbursement levels for other procedures usually are then scaled down from the preventive and diagnostic level, based on the design objectives of the employer.

There are two major advantages to nonscheduled plans:

1. Uniform reimbursement level. While the dollar payment may vary by area and dentist, the percent of the total cost reimbursed by the plan is uniform.
2. Adjusts automatically for change. The nonscheduled plan adjusts automatically, not only for inflation, but also for variations in the relative value of specific procedures.

This approach also has disadvantages. First, because benefit levels adjust automatically for increases in the cost of care, in periods of rapidly escalating prices cost control can be a problem. Second, once a plan is installed on this basis, the opportunities for modest benefit improvements, made primarily for employee-relations purposes are limited, at least relative to the scheduled approach. Third, except for claims for which predetermination of benefits is appropriate, it rarely is clear in advance what the specific payment for a particular service will be, either to the patient or the dentist.

Preferred provider benefits are usually provided on an unscheduled basis. Reimbursement for services provided, however, is based on an agreed-upon discounted charge level, rather than the reasonable and customary charge. Deductible, coinsurance, percentage copayment, and other benefit provisions are generally applied to the discounted charge level, not the reasonable and customary amount.

Other approaches are, for the most part, merely variations of the two basic plans. Included in this list are combination plans, incentive plans, and dental combined with major medical plans.