Dental Services: Information on Coverage, Payments, and Fee Variation
Released: 2013-09-12T00:00:00

Letter

Background

Dental Services

Dental services cover an array of procedures, from preventive services, such as cleanings, to more complex services, such as root canals (see table 1).

Most individuals with dental coverage have private dental insurance. Private dental insurance plans may be a stand-alone plan or be included as a part of medical insurance. Stand-alone dental plans require individuals to enroll separately; they are not a part of the individual’s medical insurance plan. The types of dental services covered by dental plans vary widely among private plans. For example, one plan may include “comprehensive” care such as routine diagnostic and preventive services, restorative services, and oral surgery, while another may cover more limited services such as emergency care only. Cost sharing for dental services usually involves an annual deductible—and according to a Bureau of Labor Statistics survey of employers, in 2008, the median deductible was $50 per person. After the individual meets the deductible, dental plans may pay a percentage of covered services up to a maximum annual benefit. In 2008, the reported median annual maximum was $1,500.

Individuals may also obtain dental coverage in other ways, such as through federal programs. Federal programs may cover dental services as a required benefit, support purchase of stand-alone dental coverage for eligible beneficiaries, or support coverage of dental services as part of broader coverage under individuals’ medical coverage plans, for example. Benefits included in these types of coverage may vary widely depending on factors such as type of plan purchased, family income, or veteran’s status (see table 2).

HHS’s HRSA reported that in 2011, over 4 million patients used dental services at federally funded health centers. Under the Health Center Program, health centers—which must be located in federally designated medically underserved areas or serve a federally designated medically underserved population—are required to provide pediatric dental screenings and preventive dental services, as well as emergency medical referrals, which may also result in the provision of dental services. Health centers may provide required services, including required dental services, directly or via formal contract or referral agreements. However, health centers are not required to provide a full range of dental services.

A health center must establish a fee schedule for its services that is consistent with locally prevailing rates and reflects the health center’s reasonable costs of providing services. A health center must also establish a sliding fee schedule for individuals who earn annual incomes equal to or less than 200 percent of the FPL. 2011, over 92 percent of the more than 20 million patients served by health centers nationwide had income less than or equal to 200 percent of the FPL (and were eligible for a sliding scale fee based on income and family size).

The 2013 federal poverty guidelines state that a family of four at 200 percent of the poverty level has an income of $47,100 per year.

Dental Care under the Patient Protection and Affordable Care Act

The Patient Protection and Affordable Care Act (PPACA) has designated pediatric dental care as an essential health benefit that new health plans must cover in the new health care exchanges and the small-group and individual markets. Exchanges may allow plans to offer stand-alone dental coverage providing, at a minimum, pediatric dental care. Adult dental coverage is not included as an essential health benefit. Plans that have grandfathered status under the law are not required to offer pediatric dental coverage. PPACA has the potential to change the benefits and out-of-pocket payments associated with dental coverage; however, the extent of these changes is uncertain.

National Survey Data Show That Rates of Dental Coverage and Use of Dental Services Remained Generally Unchanged from 1996 to 2010

The rate of individuals with dental coverage remained largely unchanged from 1996 to 2010; around 62 to 63 percent of the population had private or Medicaid or CHIP dental coverage. In addition, from 1996 to 2010, the percentage of individuals who had a dental visit remained about the same, around 41 to 43 percent.

Coverage of Dental Services Remained Relatively Unchanged from 1996 to 2010

Our analysis of MEPS data showed that overall, the rate of dental coverage—the percentage of individuals reporting that they had dental coverage through private insurance or Medicaid or CHIP—remained relatively unchanged from 1996 to 2010.62 percent of individuals reported having dental coverage, and in 2010, 63 percent reported having dental coverage. For about 10 to 12 percent Specifically, in 1996, of the population, including many individuals covered by Medicare and other federal health programs, dental coverage status is unknown.

While the overall percentage of individuals with dental coverage generally stayed the same between 1996 and 2010, the percentages with private dental and without insurance coverage decreased and the percentage with Medicaid dental coverage increased. Specifically, the percentage of individuals with private coverage was 53 percent in 1996 and 50 percent in 2010 (see fig. 1). The percentage of individuals with dental coverage under Medicaid increased steadily in each of the years we examined, from 9 percent in 1996 to 13 percent in 2010. The percentage of individuals reporting that they did not have dental coverage decreased from 28 percent in 1996 to 25 percent in 2010, leaving at least one in four individuals with no dental coverage—approximately 76 million people—in 2010. For 10 to 12 percent of individuals in each year we examined, it is unknown whether they had dental coverage. These individuals reported having some type of health coverage, such as Medicare coverage, but the MEPS survey structure did not allow us to determine whether that health coverage included dental coverage.

Rates of private dental coverage among individuals in the high-income category (over 400 percent of FPL) were higher than any other income category in 1996, 2004 and 2010 (see fig. 2). Individuals in the poor-, low-, and middle-income groups saw a decline in the rates of private coverage over the same period.

The percentage of individuals with Medicaid dental coverage increased from 9 percent in 1996 to 13 percent in 2010. This trend was largely driven by an increase in children covered by Medicaid, which requires pediatric dental coverage. The overall percentage of children (ages 0-20 years) reported to have dental coverage—through private coverage or Medicaid—increased from 72 percent (59 million) in 1996 to 81 percent (71 million) in 2010, and fewer children were uninsured, because more children were covered by Medicaid in 2010 than in prior years. The percentage of children with dental coverage through Medicaid increased from 18 percent (15 million) in 1996 to 33 percent (29 million) in 2010 (see fig. 3). This was the largest increase in coverage for any age group in Medicaid. The percentage of children with private dental coverage decreased from 54 percent (44 million) in 1996 to 48 percent (42 million) in 2010. In addition, rates of children without dental coverage declined from 27 percent (22 million) to 17 percent (15 million) over the same period.

The percentage of individuals who used dental services—those who reported having at least one dental visit during the year—remained relatively unchanged at around 40 percent from 1996 to 2010. Specifically, about 43 percent of individuals in 1996 and 41 percent in 2010 had a dental visit. Table 3 shows our analysis of MEPS data on the use of dental services.

Trends in dental visits by individuals with private dental coverage largely explained why the percentage of individuals with a dental visit remained relatively unchanged from 1996 to 2010. Specifically, over this period the percentage of individuals with private dental coverage who had a dental visit remained the same, at around 56 percent (see table 4), and individuals with private coverage made up a large majority—around 80 to 85 percent—of the population with dental coverage during that time period. The number of individuals without dental coverage who had a dental visit declined—from 26 percent, or 19 million individuals, in 1996 to 18 percent, or 14 million individuals, in 2010.

The percentage of individuals with Medicaid who had a dental visit increased from 1996 to 2010. This increase reflects an increase in the number of children with Medicaid coverage who had a dental visit, although these children still had dental visits at lower rates than privately insured children (58 percent). The percentage of children with Medicaid dental coverage with a dental visit increased from 28 percent, or 4 million children, in 1996 to 37 percent, or 11 million children, in 2010. (See fig. 4.)

Among individuals who reported having a dental visit, there was an increase in the percentage reporting that they received diagnostic and preventive services (for example, exams and cleanings) and a decrease in those reporting that they received other services, such as restorative services (for example, fillings), from 1996 to 2010. Specifically, the percentage of visits for diagnostic and preventive services as a proportion of total dental services increased (see fig. 5). Seventy-six percent of dental visits in 2010 consisted of diagnostic or preventive services (43 and 33 percent, respectively). This is an increase from 69 percent in 1996, when diagnostic and preventive services made up 40 and 29 percent of services received, respectively. The percentage of visits for other types of services decreased from 1996 to 2010. Specifically, restorative services—such as fillings—decreased slightly from 8 percent to 6 percent as a proportion of total dental services received in those years. Other services that decreased included prosthetic and orthodontic services.

Average Payments for Dental Services Increased from 1996 to 2010

Average annual payments made on behalf of or by individuals for dental services—including payments from other payers such as insurers and out-of-pocket payments—increased from 1996 to 2010. Average annual inflation-adjusted dental payments increased 26 percent from $520 per year in 1996 to $653 per year in 2010 (see table 5). The average annual payments made—including out-of-pocket payments and payments by other payers—increased 24 percent for the privately insured, 39 percent for individuals with Medicaid, and 38 percent for those without dental coverage. In addition, in 2010, average annual dental payments (out of pocket and payments made by other payers) for those with private coverage were nearly twice as much as the payments made by and on behalf of individuals with Medicaid coverage.

Average annual payments for dental services varied across income levels. Payments made by and on behalf of individuals in the low-, and middle-income groups increased steadily from 1996 to 2010. However, average annual payments made by and on behalf of individuals who were poor increased from $373 in 1996 to $493 in 2004, and then decreased to $437 in 2010. For low-income individuals, that is, individuals with incomes at or below 200 percent but above 100 percent of the FPL, dental payments had the largest increase. Specifically, average annual dental payments for the low-income group increased from $393 in 1996 to $558 in 2010 (see fig. 6), about 42 percent. Average annual dental payments also increased for middle- and high-income individuals—23 and 25 percent, respectively.

Individuals’ out-of-pocket payments for dental services, separate from payments by other payers, when adjusted for inflation, generally increased from 1996 to 2010 (see fig. 7). Specifically, average annual out-of-pocket payments made by individuals with private coverage increased 21 percent from 1996 to 2010—from $242 to $294. Individuals with no dental coverage experienced the greatest increase in average annual out-of-pocket payments, from $392 to $518, a 32 percent increase. For individuals with Medicaid coverage, their average annual out-of-pocket payments remained relatively unchanged, $64 in 1996 and $59 in 2010.

Fees Charged for Dental Services Varied between and within Communities

Dental fees charged by dentists and health centers varied across geographic areas and within communities. For 24 common dental procedures, dental fees charged by local dentists varied significantly between the 18 communities we examined. In addition, dental fees varied widely within communities. Dental fees also varied between local dentists and health centers that serve residents of the same community, but all health centers are required to offer sliding fee schedules for low-income individuals.

Dental Fees Varied Widely between Communities

For 24 common dental procedures, midpoint dental fees—the amount where half of fees charged were higher and half were lower—varied widely between the 18 communities we examined. For example, midpoint dental fees for an adult prophylaxis (commonly called teeth cleaning) in large communities ranged from $76 in Nashville, Tennessee, to $155 in New York, New York. In smaller communities, midpoint fees ranged from $59 in Jackson, Tennessee, to $88 in Fresno, California (see fig. 8). Similarly, midpoint fees charged for a child prophylaxis ranged from $55 to $105 in large communities and $48 to $71 in small communities. Dental fees, as with other health care costs, vary by location. (See tables 10 to 27 in app. IV for more information on the range of dental fees for other common dental procedures in selected communities.)

Several factors can contribute to geographic variation in dental fees, including local wages and the cost of space and equipment needed to operate a practice. Although we identified no current peer-reviewed research that established a correlation between individual factors and the level of dental fees, geographic variation in spending for medical services is well documented. For example, the Congressional Budget Office reported that a number of factors, including facilities, supplies, and wages, influence geographic variation in health care spending. The Centers for Medicare & Medicaid Services (CMS), in setting Medicare payment rates for health care services, establishes a geographic practice cost index for each Medicare payment locality to account for variation in practice expenses. CMS reported that it did not have any comparable practice cost index for Medicaid dental fees.

Dental Fees Varied Widely within Communities

Dental claims data also showed significant differences within communities for all 24 common dental procedures we examined. Fees within the private practice dental setting are affected by local market conditions and decisions within the individually owned practices. FAIR Health dental claims data showed that within communities the difference between midpoint and upper-end fees was as high as 143 percent for localized delivery of antimicrobial agents. Upper-end fees were at least double the midpoint fees in at least one community for 8 of the 24 common procedures we examined (see table 6). (See app. IV for information on all 24 procedures in all 18 selected communities.)

Dental fees within communities also varied widely for diagnostic procedures. For the most common diagnostic procedure, a periodic oral evaluation of an established patient, the percentage difference between reported midpoint and upper-end fees in large communities ranged from 20 percent to 142 percent (see table 7). For example, in Miami, Florida, half of the fees charged by dentists for a periodic oral examination of an established patient were $62 or less, but 5 percent of fees charged for that procedure were $150 or more, a 142 percent difference. In small communities, the percentage difference was less, ranging from 17 percent to 58 percent.

Dental fees within communities also varied widely for restorative procedures. For the most common restorative procedure, a filling, the percentage difference between reported midpoint and upper-end fees in large communities ranged from 19 percent to 67 percent (see table 8). For example, in Phoenix, Arizona, half of the fees charged by dentists for a filling were $195 or less, but 5 percent of fees charged for that procedure were $325 or more, a 67 percent difference. In small communities, the percentage difference was smaller, ranging from 13 percent to 38 percent.

Dental fees also varied between midpoint fees of local dentists billing private insurers and the full fees of the federally funded health centers that serve residents of the same community. In the 18 communities we examined, full dental fees for a tooth extraction (the most common oral surgery procedure) were typically lower at health centers. For patients with incomes at or below 100 percent of the FPL, 10 health centers offered a 100 percent fee discount and 8 health centers had fees ranging from $16 to $148 for extracting a tooth (see table 9). Health centers’ full fees—which fewer than 8 percent of health center patients pay—were often, but not always, lower than the midpoint fees charged by local dentists. In some cases, midpoint fees charged by local dentists were higher than health center fees by a wide margin. For example, in Los Angeles, the midpoint fee charged by local dentists for a tooth extraction was nearly 3 times the full fee charged by a health center serving residents of the same community. In other cases, full fees were higher than those of local dentists. For example, in Fresno the health center’s full fee was $177 for a tooth extraction compared to the midpoint fee charged by local dentists of $142. (See app. IV for additional information on local dentist fees and health center dental fees.)

To assist health centers in establishing sliding fee schedules for low- income patients, HRSA officials told us that, as of June 2013, they were in the process of preparing guidance on discounting fees for all services provided as part of a health center’s scope of project, including dental services. In technical comments on a draft of this report, HHS noted that the draft guidance was in final clearance, indicating that it was uncertain whether the final policy would include guidance on establishing full-fee schedules. According to HHS, there is often a significant unmet need for dental care services among patients served by health centers and as a result, health centers and their community boards must make decisions about whether to provide additional dental services to meet this need and develop a fee schedule consistent with Health Center Program requirements. HHS commented that variation in fees and discounts reflect each health center's unique community characteristics as well as the board's decision on how best to balance their ability to provide these services against the unmet need in their community.

Agency Comments

HHS reviewed a draft of this report and provided technical comments, which we incorporated as appropriate.

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Appendix I: National Dental Expenditures

To determine national trends in U.S. dental expenditures, we obtained national expenditure data from HHS’s Centers for Medicare & Medicaid Services’ (CMS) Office of the Actuary. In 2011, national expenditures for dental services in the United States were about $108 billion, an inflation- adjusted increase from $64 billion in 1996 (see fig. 9). Inflation-adjusted expenditures in the United States for dental services rose an average of 3.6 percent per year between 1996 and 2011—ranging from a 0.8 percent decrease in 2009 to a 6.9 percent increase in 2002.

Appendix II: Urban and Rural Dental Visit Rates

Individuals who lived in urban and rural areas reported dental visits at different rates, with individuals in urban areas reporting higher rates of dental visits. For example, in all age groups, fewer individuals in rural areas reported having a dental visit than individuals in urban areas (see fig. 10). Specifically, 34 percent of individuals ages 65 and older living in rural areas had dental visits in a year, compared with 45 percent of their counterparts in urban areas, for 2008 through 2010. The rates for children were similar: 35 percent of children 0 to 20 years old living in rural areas reported a dental visit in a year, compared with 45 percent of children in urban areas.

Appendix III: Scope and Methodology

To provide information on the trends in dental coverage rates, use of dental services, and payments by individuals and other payers for dental services, we analyzed nationwide data from the Medical Expenditure Panel Survey (MEPS). We examined and analyzed data from 3 years: 1996, 2004, and 2010. We selected these years for our analysis because 1996 was the first year MEPS was administered and 2010 was the most recent year for which data were available, we included 2004 to provide three points in time for our analysis. MEPS is administered by the Department of Health and Human Services’ (HHS) Agency for Healthcare Research and Quality (AHRQ) and is a nationally representative survey of the noninstitutionalized population, including families, medical providers, and employers. MEPS collects self-reported information on individuals’ demographics, health and insurance status, and use of medical services by setting and provider type, as well as expenses and payments related to those medical and dental visits, among other things. We analyzed responses to MEPS questions about types of dental insurance coverage, number of dental visits, types of dental procedures received, and payments made related to those visits. A dental visit refers to care by or visits to any type of dental care provider, including general dentists, dental hygienists, dental technicians, dental surgeons, orthodontists, endodontists, and periodontists. For this report, we referred to all visits as dental visits.

To determine whether an individual had private dental insurance coverage, we examined MEPS data and noted whether the individual reported having dental insurance or had private insurance pay on a dental claim during the year. Thus, we considered an individual to have private dental coverage if he or she (1) reported having dental insurance or (2) had that insurer pay on a dental claim.

To identify adult Medicaid coverage by state, we used a list of states provided by the Centers for Medicare & Medicaid Services (CMS) for 2004 and 2010. For states that were identified as having “limited” or “emergency only” dental coverage, we did not consider those benefits to be Medicaid dental coverage. Our analysis of adult Medicaid coverage based on the list from CMS resulted in only small differences from a similar analysis conducted by AHRQ for its Chartbook 17 publication that examines dental coverage and expenses.

To categorize dental procedure codes, we consulted with AHRQ and used the same categories used by AHRQ for its Chartbook 17. For example, AHRQ placed various dental procedure codes related to preventive dental care—such as teeth cleaning and sealant application— in the preventive services category.

In MEPS, expenses are defined as the sum of payments for care received, including out-of-pocket payments and payments made by private insurance, Medicaid, Medicare, and other sources. For this report, we referred to MEPS expenses as payments—payments by insurers or other payers as well as out-of-pocket payments made by individuals. To present the dental payments in constant 2010 dollars, we used the Consumer Price Index for All Urban Consumers (CPI-U) as the price deflator for both the aggregate dental payments and the out-of-pocket payments.

To identify potential differences in dental service use and payments by demographic groups, we looked at responses by age group, income level, and urban or rural area. We examined income level in terms of the federal poverty level. To conduct the urban and rural analysis, we assigned individuals to one of three groups based on the county they lived in— each county was designated urban, suburban, or rural based on the Rural Urban Continuum Codes (RUCC).follows: those who lived in counties designated 1, 2, or 3 in the RUCC were urban; counties designated 4, 6, or 8, suburban; and in counties designated 5, 7, or 9, rural.

We categorized those individuals as In conducting the urban and rural analysis, to ensure adequate sample sizes, we combined MEPS data for 2008, 2009, and 2010. This was the only analysis where a combination of years was necessary. Despite this effort, small sample sizes for some analyses limited the reliability of the results, and in those cases, we did not report those analyses.

To determine the reliability of the MEPS data, we reviewed related documentation, interviewed agency officials, and identified other studies that used MEPS to address similar research questions to compare the published data with our findings. We determined that the MEPS data were sufficiently reliable for the purposes of our report.

To determine the extent to which dental fees varied between and within selected communities, we analyzed dental insurance claims data and dental fees charged by selected health centers in nine states corresponding to the nine U.S. Census Bureau divisions. Using 2010 Census data, we selected two communities in each state, one large based on population and volume of dental claims and one small based on population. Our nine selected community pairs, large and small (with selected geozips), were Phoenix (850) and Flagstaff (860), Arizona; Los Angeles (900) and Fresno (936), California; Miami (331) and Palm Coast (321), Florida; Chicago (606) and Champaign (618), Illinois; Boston (021) and Pittsfield (012), Massachusetts; Minneapolis (554) and Mankato (560), Minnesota; New York (100) and Elmira (148), New York; Nashville (372) and Jackson (382), Tennessee; and Dallas (752) and San Angelo (768), Texas.

To identify representative dental fees in each community, we analyzed (1) 2012 dental insurance claims data compiled by FAIR Health, Inc., as of January 2013, and (2) dental fee schedules from selected health centers serving these communities. Based on the FAIR Health claims data, we selected 24 of the most of commonly billed dental procedures in six categories of the American Dental Association’s (ADA) Current Dental Terminology (CDT) codes: five diagnostic, five preventive, five restorative, three endodontic, three periodontic, and three oral surgery.consulted with academic dental experts and ADA officials to confirm that We the CDT codes we selected were representative of common dental procedures. We also compared our list of common dental procedures to data from the ADA Survey of Dental Fees. We also obtained health center dental fees for these 24 procedures in our 18 selected communities. Based on a list of health centers provided by HHS’s Health Resources and Services Administration (HRSA), we selected one health center (the center that served the most dental patients) in each community. We obtained full-fee and sliding fee schedules from each health center, although some health centers did not provide or bill separately for all 24 procedures. The 18 health centers studied may not be representative of the more than 1,200 health centers supported by HRSA.

For each selected dental procedure, we extracted from the FAIR Health data set the midpoint dental fee (the 50th percentile) and the upper-end fee (the 95th percentile). A percentile indicates the percentage of reported fees that were below the stated amount; for example, 95 percent of reported fees fall below the 95th percentile. Within each community, we selected one geozip (an area that shares the first three digits of a postal zip code) with the most dental claims to represent the community. Because geozip boundaries do not align with metropolitan statistical area designations, we selected one geozip (the one with the most dental claims) to represent each large and each small metropolitan area. Large metropolitan areas can include multiple geozips. For example, the Los Angeles/Long Beach metropolitan area includes geozips 900 to 912 (excluding 909).

To determine the reliability of the FAIR Health and health center data, we reviewed related documentation, interviewed agency officials and academic experts, and conducted data testing for missing data. We determined that both the FAIR Health and health center data were sufficiently reliable for the purposes of our report.

Appendix IV: Dental Fees Charged for Common Dental Procedures in 18 Communities

This appendix presents information on local dentist fees and health center fees for 24 common dental procedures in the 18 communities (by specific geozips) we examined (see tables 10 to 27).

Appendix V: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

In addition to the individual named above, Kim Yamane, Assistant Director; George Bogart; Carolyn Fitzgerald; Mollie Hertel; Elizabeth Morrison; and Terry Saiki made key contributions to this report.

Related GAO Products

Oral Health: Efforts Under Way to Improve Children’s Access to Dental Services, but Sustained Attention Needed to Address Ongoing Concerns. GAO-11-96. Washington, D.C.: November 30, 2010.

Medicaid: State and Federal Actions Have Been Taken to Improve Children’s Access to Dental Services, but More Can Be Done. GAO-10-112T. Washington, D.C.: October 7, 2009.

Medicaid: State and Federal Actions Have Been Taken to Improve Children’s Access to Dental Services, but Gaps Remain. GAO-09-723. Washington, D.C.: September 30, 2009.

Medicaid: Extent of Dental Disease in Children Has Not Decreased, and Millions Are Estimated to Have Untreated Tooth Decay. GAO-08-1121. Washington, D.C.: September 23, 2008.

Health Resources and Services Administration: Many Underserved Areas Lack a Health Center Site, and the Health Center Program Needs More Oversight. GAO-08-723. Washington, D.C.: August 8, 2008.

Medicaid: Concerns Remain about Sufficiency of Data for Oversight of Children’s Dental Services. GAO-07-826T. Washington, D.C.: May 2, 2007.

Oral Health: Factors Contributing to Low Use of Dental Services by Low- Income Populations. GAO/HEHS-00-149. Washington, D.C.: September 11, 2000.

Oral Health: Dental Disease Is a Chronic Problem Among Low-Income Populations. GAO/HEHS-00-72. Washington, D.C.: April 12, 2000.