Methods of calculating UCR benefits. Council on Dental Care Programs.
A total of 15 insurance firms and service plans responded with completed or partially completed questionnaires to a survey conducted by the Council in response to a directive of the 1981 House of Delegates. The survey to determine the various methods used in the calculation of UCR benefits asked that the firms and service plans provide the source of their fee data; the locality used in establishing customary fees; the frequency with which their maximum allowable benefits are updated; the age of the data used in the updates; the percentile used as the upper limit on the range of fees; the method of determining the percentile; and their definitions of "unusual fee," "customary fee," "reasonable fee," and "prevailing fee." In addition, the surveyed firms and plans were asked to supply their maximum allowable benefits for eight dental procedures provided in a given city on a given date. Most respondents advised that they use the 90th percentile as the upper limit on allowable fees. Most commonly, postal zip code (first three digits) or counties updated quarterly using fees from the previous six months are used for locality and fee updating. Among insurance firms, claim statistics normally are used to develop the fee base, but among service plans, prefiled fees predominate. Although most examples indicated that similar statistical calculations were used in determining the upper limit on benefits, some notable variations were reported, including a composite weighting of all fees filed by a dentist and individual dentist profiles for usual fees, which are used to calculate customary fees. Insufficient responses were received on maximum allowable benefits to permit statistically valid analysis. The Council recognizes that a free market encourages variety among competitors. To make sure that plan participants are not misled about the benefits provided, the Council urges that specific information concerning the method of calculating benefits be provided to plan participants and in the case of service plans, to participating dentists.
D003625:Data Collection; D005250:Fees, Dental; D006801:Humans; D007347:Insurance, Dental