Every year, provincial and territorial dental associations publish their fee guide for the upcoming year.
What is a dental fee guide?
The dental fee guide outlines the suggested fees for most dental procedures.
The fee guide is meant to be a tool to increase transparency and create an open dialogue between patients and dentists in respect to treatment options and their pricing. However, dentists are not required to follow the guide and are free to set their own fee schedule.
How do insurers use dental fee guides?
Insurers use fee guides as a way to determine whether dental providers are charging reasonable and customary fees. When plan members submit claims in excess of these limits, insurers generally base their reimbursement on the amount listed in the fee guide.
In the absence of a fee guide, insurers refer to aggregate provincial claims data across their block of business (ex. Alberta did not have a dental fee guide for many years prior to 2017).
This approach is meant to protect group insurance plans against excessive claims.
Higher than normal increases for 2021
While we have grown to expect inflationary adjustments year over year, 2021 fee guide increases are generally higher than we have seen in the past. Many fee guides are increasing over 4%, with Prince Edward Island experiencing the largest increase at 5%.
To the extent that dental providers follow the fee guide, this translates into higher amounts reimbursed by group insurance plans, leading to increased premium at renewal.
At least part of this increase may be a consequence of COVID-19 which has forced dental clinics to invest in additional protective equipment and increase sanitary measures.
Fee guide adjustments take effect on January 1st (except in the case of British Columbia and New Brunswick fee guides which are updated February 1st). Not all dental codes fees increase at the same rate. Below are the overall average dental fee guide adjustments for 2021 (announced to date):
Alberta: no change
Newfoundland & Labrador
Prince Edward Island
How can plan sponsors (employers) use the fee guide to control plan costs?
Most group insurance plans reimburse dental claims based on the fee guide of the current year in the claimant’s province of residence.
Some plan sponsors choose to base reimbursement on:
- The dental fee guide of the previous year. In this scenario, the plan allows for adjustments year to year but the maximum eligible for reimbursement is always lagging one year behind the fee guide in effect.
- The dental fee guide of a specific year. In this scenario, the fee schedule is fixed in time and the plan members fully absorbs costs increases after that date.
- This strategy effectively allows employers to control costs and limit premiums increases over time. Because employees and employers typically share in the cost of the benefits plan, this is advantageous to all parties.
- It can encourage employees and their family members to shop around for better cost alternatives or negotiate better pricing with their current dentist.
- If not properly communicated, this strategy can cause confusion and dissatisfaction as employees may be left with higher out of pocket expenses.
To discuss how dental fee guides affect your benefits plan, contact a group insurance advisor.