Direct Reimbursement

Direct reimbursement is a self-funded dental benefit model in which employers reimburse their employees a predetermined percentage of the dollars spent on dental care, without regard to the type of procedure performed. Unlike traditional dental insurance or managed care plans, direct reimbursement does not involve a third-party carrier adjudicating claims or making coverage decisions. The employee pays the dentist directly, obtains a receipt, submits it to the employer or a plan administrator, and receives reimbursement based on the plan's percentage schedule.

For dental practices, direct reimbursement is one of the most billing-friendly plan types. Because there is no insurance company involved in the payment process, practices do not need to submit claims electronically, wait for adjudication, deal with downcoding, or navigate pre-authorization requirements. The patient is responsible for paying the practice at the time of service, and the reimbursement transaction occurs between the employee and the employer. This means the practice's accounts receivable for direct reimbursement patients is effectively zero, since full payment is collected at the point of care.

In day-to-day revenue cycle work, direct reimbursement plans also preserve the dentist's freedom to treatment plan without restrictions imposed by insurance fee schedules or benefit limitations. Patients can choose any dentist and any procedure, and the employer reimburses a flat percentage regardless of whether the service was a cleaning, a filling, or an implant. This encourages patients to pursue optimal treatment rather than settling for the least expensive covered alternative. Dental billing teams should be aware of direct reimbursement plans so they can advise patients on how to obtain proper receipts and documentation to submit to their employers for reimbursement.