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Deciding Whether to Do This at All, lesson 2 of 3
Fee for Service or Managed Care, and Why It Changes Everything
Two practices can both say they take the program and be running completely different businesses. In fee for service you bill the state per procedure. In managed care a plan is paid per member and pays you out of that. The work is the same. The cash flow, the paperwork and the person you call when something goes wrong are not.
- Fee for service. You bill per procedure, the state pays the schedule
- Managed care. A plan holds the member and pays you under a contract
- What changes. Who approves work, who you chase, how fast money arrives
- Where to check. Your state program, because some counties run one and some run both
The Same Patient, Paid for Two Different Ways
Fee for service is the arrangement most dentists picture. A patient is eligible, you do a procedure, you send a claim to the state program, and the program pays its published rate for that procedure.
Managed care puts a health plan in the middle. The state pays the plan a set amount each month for each member assigned to it, and the plan contracts with practices to see those members. You are paid under your contract with the plan rather than off the state schedule.
In California both exist. Most of the state is fee for service, and dental managed care operates in some counties. Which one applies to a given patient is a fact about that patient, not about your office, and it is worth knowing before the appointment rather than after the claim.
What Actually Changes in the Office
Who approves the work changes. In fee for service you are asking the state program. In managed care you are asking the plan, under rules the plan sets inside the contract you signed.
Who you chase changes. A fee for service claim that has gone quiet is a conversation with the program. A managed care claim that has gone quiet is a conversation with the plan, and plans differ from each other as much as they differ from the state.
Patient assignment changes. In managed care a member is usually assigned to a practice, which means a stream of people who are yours by default. That is a real advantage and it comes with an obligation to see them.
Cash flow changes. Per procedure payment rises and falls with what you do. A contract may pay differently, and a practice that has budgeted for one and is being paid the other will feel it before it can explain it.
How to Find Out Which Applies to You
Start with your state program rather than with a forum. The programs publish which counties operate managed care, which plans hold contracts there, and how a provider joins each.
If both operate where you are, you can usually be enrolled in fee for service and contracted with one or more plans at the same time. That is common and it is not a conflict.
Read the contract before you sign it, and read the part about authorization and timely filing first. Those two clauses decide more of your year than the rate does.
Before You Spend a Dime
Is one of them better?
Neither is better in general. Fee for service gives you more control over volume. Managed care gives you assigned patients and a contract to point at. Which one suits you depends on whether your problem is finding patients or getting paid for the ones you have.
Can I take one and not the other?
Usually yes. Many practices are enrolled in fee for service and hold no plan contracts at all. Check with your state program, because the answer depends on where you are.
How do I know which one a patient is on?
Check eligibility before the visit. The eligibility response is what tells you, and it is the same check that tells you whether they are covered at all this month.
Next Problem to Solve
- Adults and Children Are Two Different BusinessesNext in the course. Why children's dental coverage is steady across the country and adult coverage is not, and what that means for how you plan a practice around it.
- Should Your Practice Take Medi-Cal PatientsRelated. A plain look at the economics of Medicaid dental for a private practice, and how some offices make it work.
- Check Eligibility at Every Single VisitRelated. Why Medicaid eligibility is a monthly fact rather than a standing one, and why checking it once is the most expensive habit a front desk can have.
- Enrolling as a Medi-Cal Dental ProviderRelated. What enrolling in Medi-Cal dental involves, what slows applications down, and what to sort out before you start.