Why insurance paid for a cheaper procedure: downgrades, bundling and alternate benefits

The short version

• A plan may pay using a lower-cost code than the one you sent. The rules for this are usually in the provider manual or the payer's online portal, not in the contract itself.¹
• Under an alternate benefit (LEAT) clause, the payers' side of an ADA article says the dentist "is then able to charge the patient the difference" between the two procedures.³ Some plans allow this and some don't.²
• Always code what you did. The ADA says that is "the only proper action."¹
• If you think the claim was handled wrong, appeal in writing.¹

Three reasons a plan pays less

On the EOB they can look the same. They are not.

• Downcoding (a downgrade)

  The plan pays using a different code than the one you sent, so the benefit is lower.¹

  Example: A posterior composite is paid as an amalgam. Or an adult cleaning for a 12-year-old is paid as a child cleaning because the plan counts anyone under 14 as a child.

• Bundling

  The plan combines separate procedures into one, which lowers the benefit.²

  Example: Several X-rays taken the same day are paid as one full mouth series.

• Alternate benefit (LEAT)

  When more than one treatment would work, the plan pays only for the least expensive one. LEAT stands for “least expensive alternative treatment.”³

  Example: A composite filling is paid at the amalgam rate. A crown is paid as a large filling.

Some bundling follows the code set. The payers' side, in the same ADA article, says many "bundled" items are already part of the main code. Their examples: pins with a core buildup, liners or bases with a filling, and suture removal with an extraction.² Before you fight a bundle, check the current CDT descriptor for the main code.²

An alternate benefit is not a judgment on your care. In the same series, the payers say a LEAT clause is "not meant to dictate treatment" or question your judgment. It pays toward the treatment you chose, up to the cheaper option's amount.³ The payers add that these clauses apply to indemnity and PPO plans, not dental HMOs.³

Can the patient pay the difference?

It depends on the plan, your contract and whether you are in network. Here is what the ADA says:

• Out of network, downcoded claim: The plan still pays based on the cheaper code, but "the dentist can bill the patient up to their full fee" for the procedure you did.¹
• Alternate benefit (LEAT): The plan pays the allowed amount for the cheaper treatment. Payers say the dentist can then charge the patient the difference.³ The payers' side of the ADA article also says only "some dental benefit plans" allow this.²
• In network, bundled or downcoded claim: You may have to write off more than you expected.² If you are not in network, the patient's share may be higher than they expected.²

When you sign a participating contract, you agree to follow the plan's processing policies.¹ So check the provider manual for each plan before you bill a patient for the difference. If you are unsure, ask the plan or your attorney.

An alternate benefit, in dollars

This example comes from the payers' side of the same ADA article. A dentist places a composite on a back tooth. The plan covers only amalgam on back teeth and has an alternate benefit clause.³

1. The plan's allowed fee for the amalgam is $60. The plan pays 80%, which is $48.
2. The patient pays the 20% copay on the amalgam, which is $12.
3. The allowed fee for the composite is $90. The patient also pays the $30 difference.
4. The office gets $90 in total, the full composite fee.

Notice the patient's share is $42, not $12. That is why telling them early matters.³

How to respond to a downgrade

1. Read the EOB note. Did the plan apply an alternate benefit, bundle codes or change a code? Payers say a LEAT payment should be "clearly noted" on the EOB.²
2. Check your own coding. Make sure each code matches the current CDT descriptor. Old code versions get updated by payers.²
3. Look up the plan's policy. Processing policies are usually in the provider manual or online portal.¹ You can also ask the payer for its coding method. The ADA says these should be "readily available."²
4. Call the plan with questions, using the phone number on the patient's ID card.¹
5. Appeal in writing if you believe the claim was not handled correctly.¹ See our guide to dental insurance appeals.
6. Appeal even if the money may not change. The ADA says an appeal "may not always result in greater reimbursement" but can keep the patient from thinking you coded wrong.¹
7. Review your contracts. ADA members can send an unsigned contract to their state or local dental society for a free review by the ADA Contract Analysis Service. It explains terms in plain language but is not legal advice.¹

How to tell patients before treatment

A downgrade can make patients think the plan decided they needed less care. The ADA says the plan simply pays for a lower level of service, "with no judgment made" about the care you gave.¹ A few steps help:

• Say it up front. When there is more than one way to treat a tooth, tell the patient a LEAT clause may change what they pay.³
• Send a pre-estimate to show the patient's cost when you need to.³
• Put cost in the consent. Include the procedure cost and the patient's estimated share.³
• Talk through the options. Cover the risks and benefits of each choice so the patient can decide.³ The treatment plan should be based on what you and the patient decide is right, not on what the plan pays.²
• Explain the EOB wording. Patients sometimes read "could have been performed" as "should have been performed."³ It means the plan paid a set amount, not that your care was wrong.
• Point them to their benefits. The ADA suggests patients check with their HR department about their level of benefit before treatment.¹

Checklist

• Code what you did, using current CDT.
• Before treatment, flag procedures that often get an alternate benefit, like back-tooth composites and crowns.
• Give the patient a written estimate that shows the possible difference.
• When the EOB arrives, sort the cut: downgrade, bundle or alternate benefit.
• Check the plan's provider manual and your contract before you bill the patient the difference.
• Appeal in writing when you believe the plan got it wrong, and keep a copy.
• Track which plans downgrade which codes, so next time your estimate is closer.