Insurance Plans Part 1: Common Plan Types

Originally published May 9, 2019. Updated October 26, 2023.

Setting up insurance plans correctly and using updated fee schedules is key to getting accurate treatment cost estimates. More accurate estimates contribute to higher case acceptance rates and help build good relationships with your patients. In this post, we’ll discuss how to set up four common plan types. Also, keep an eye out for Part Two in this series which covers more complex plan types including Medicaid and Capitation plans.

Getting Started

One of the most important parts of setting up insurance plans is assigning fee schedules. Before you assign them, of course, you need to create them. See this video for how to create and edit fee schedules.

Before you can even start setting up your insurance plan, you need to figure out what type of plan you are working with. We’ve created a helpful Insurance Plan Type Flowchart to help you out.

In-Network (PPO Percentage): Tracking Write-offs

PPO Percentage Plans are the most common insurance plan type, used for in-network plans where write-offs are tracked. In this plan setup, the insurance carrier provides you with their negotiated (allowed) fees and pays a percentage. These plans calculate write-off estimates and patient portions using the UCR fees and insurance fees.

If instead, the carrier has given you two fee schedules for their negotiated fees and what they will pay for procedures, rather than a percentage, see the PPO Fixed Benefit below.

To set up a PPO Percentage Plan:

Plan Type: Select PPO Percentage
Fee Schedule: Select the insurance (allowed, negotiated, etc.) Normal fee schedule
Patient Co-pay Amounts: These are rare for a PPO Percentage Plan. If the patient pays a copay per procedure rather than the insurance paying a percentage per procedure, assign that fee schedule here. Normally coverage percentages are set to 100% for procedures with a copay as well.
Set up benefit percentages, annual max, deductible, etc. by double-clicking the Benefit Information grid.

In the Treatment Plan, you will see your office fee (Fee 300.00), the insurance fee (Allowed 250.00), what insurance is covering (Pri Est 200.00), the write-off (Discount 50.00), and the patient portion (Pat 50.00).

In the Account, you will see the full office fee is charged out and due before a claim is created. Once a claim is created, the estimated insurance payment and write-off are added to the Ins Est balance and the Est Bal and Pat Est Bal are updated. The Estimated Payment Pending, Write-off, and Est. Patient Portion are also noted on the claim line item on on the account.

In-Network: Not Tracking Write-offs

If you are in-network with an insurance plan but are not tracking write-offs, use the setup below:

Plan Type: Select Category Percentage
Fee Schedule: Select the insurance (allowed, negotiated, etc.) Normal fee schedule
Patient Co-pay Amounts: These are rare. If the patient pays a copay per procedure rather than the insurance paying a percentage per procedure, assign that fee schedule here. Normally coverage percentages are set to 100% for procedures with a copay as well.
Uncheck “Use Blue Book” this is used to track insurance fees and provide estimates for out-of-network plans . Leaving it on may have unintentional effects on your in-network estimates.
Set up benefit percentages, annual max, deductible, etc. by double-clicking the Benefit Information grid.

In the Treatment Plan, you will not see your office fee. Instead, you will see the insurance fee (Fee 250.00), and what insurance is covering (Pri Est 200.00), the write-off (Discount 50.00), and the patient portion (Pat 50.00). The patient will not see the discount they are getting for being in-network.

TECH TIP: If you still want to see the UCR fee and the “insurance discount” even if you’re not tracking write-offs, so that this can be shown to patients when presenting Treatment Plans, add the “Cat% UCR” Display Field to the Treatment Plan. This will display your UCR fee and a discount (for the write-off amount) without tracking a write-off. You can also hide the “Allowed” field since it isn’t being used.

In the Account Module, only the insurance (allowed) fee is charged out. Once a claim is created, the estimated insurance payment is added to the Ins Est balance, and the Est Bal and Pat Est Bal are updated. The Estimated Payment Pending and Est. Patient Portion are also noted on the claim line item on on the account. No write-off is noted.

TECH TIP: If you still want to bill claims with your full office fee, make sure the setting Claims show UCR fee, not billed fee is checked in the Other Ins Info tab of the insurance plan. The account is still only billed the insurance fee, but the fee billed to insurance on claims will be the UCR fee instead. You can enable this to be checked by default by enabling Insurance plans default to show UCR fee on claims in Preferences.

PPO Fixed Benefit

PPO Fixed Benefit Plans are used for in-network plans when the insurance is paying a fixed amount for each procedure, rather than a percentage These plans calculate write-off estimates and patient portions using fixed benefit amounts, insurance fees, and UCR fees.

For PPO Fixed Benefit plans, use the setup:

Plan Type: Select PPO Fixed Benefit
Fee Schedule: Select the insurance (allowed, negotiated, etc.) Normal fee schedule
Fixed Benefit Amounts: Select the FixedBenefit fee schedule where amounts insurance will pay have been entered
Benefit percentages are automatically set to 100% for all categories. Double-click the Benefit Information grid to set annual max, deductible, etc.

In the Treatment Plan, you will see your office fee (Fee 300.00), the insurance fee (Allowed 250.00), what insurance is covering (Pri Est 180.00), the write-off (Discount 50.00), and the patient portion (Pat 70.00).

In the Account, you will see the full office fee is charged out and due before a claim is created. Once a claim is created, the estimated insurance payment is added to the Ins Est balance, and the Est Bal and Pat Est Bal are updated. The Estimated Payment Pending and Est. Patient Portion are also noted on the claim line item on on the account. There is no estimated write-off.

Out-of-Network Category Percentage

When you are not in-network with an insurance plan, set the plan type to Category Percentage. These plans can use an out-of-network fee schedule to calculate more accurate patient portions. If you do not have an out-of-network fee schedule, you would not link anything under Carrier Allowed Amounts.

For out-of-network plans, use the setup:

Plan Type: Select Category Percentage
Fee Schedule: None
Recommended: Check “Use Blue Book” this is used to track insurance fees and provide estimates for out-of-network plans. See Insurance Blue Book Setup for more information.
Manual Blue Book: If you’re using Blue Book and have an insurance fee schedule (this is likely the case if you were in-network previously but are no longer), assign the ManualBlueBook fee schedule you’ve created here.
Patient Co-pay Amounts: These are rare. If the patient pays a copay per procedure rather than the insurance paying a percentage per procedure, assign that fee schedule here. Normally coverage percentages are set to 100% for procedures with a copay as well.
Set up benefit percentages, annual max, deductible, etc. by double-clicking the Benefit Information grid.

In the Treatment Plan, you will see your office fee (Fee 300.00), the carrier allowed amount, if any (Allowed 240.00), the insurance estimate (Pri Ins 192.00) – this is based on a percentage of the Allowed fee if there is one or the UCR fee if there is not, and the patient portion (Pat 360.00). Since there is no write-off, the patient portion is the billed fee minus the insurance estimate.

TECH TIP: If you’re using Blue Book, when receiving your out-of-network claims, enter insurance fees/allowed amounts in the Allowed column of the Enter Payment window. This will automatically save the allowed fee, so you can provide your patients more accurate insurance estimates in the future.

If you need help troubleshooting how write-off estimates and patient portions are calculating, feel free to reach out to us, we’re here for you!

Don’t miss Insurance Plans Part 2: Complex Plan Types, which will cover more complex plan types including Medicaid, Flat Co-Pay, and Capitation plans.

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