Originally published July 16, 2019. Updated November 16, 2023.
As insurance plans continue to evolve, it can be overwhelming to navigate through all the different options. In the first part of our series, we delved into Common Plan Types, providing some clarity amidst the confusion. Now, in Part 2, we’re here to support you by shedding light on more intricate plan types like Capitation and Medicaid/Flat Co-pay plans. Our comprehensive guide will not only help you provide more accurate insurance estimates for your patients but also enhance your reporting accuracy. Let’s explore these complex plans together!
Getting Started & Creating Fee Schedules
We discussed this in Part One, but to recap, you will want to create fee schedules to assign to insurance plans that you are contracted with. See this video for how to create and edit fee schedules.
These more complex plan types may require some additional setup when it comes to fee schedules, depending on the information you get from insurance. For insurance fees:
If the insurance fee schedule includes the total amount you are allowed to collect (including patient co-pay amounts):
- Create a Normal fee schedule with the provided fees
- Create a CoPay fee schedule with patient co-pay amounts, if necessary
If the insurance fee schedule is only the amount insurance is paying you (and patient co-pay is not included in the amount):
- Create a Normal fee schedule by adding up both the insurance amount and patient co-pay amount (e.g., Ins Pay 100 + Co-pay 50 = Fee Sched 150 ). This also applies to Mixed Capitation Plans: add up the insurance supplemental amounts and patient co-pay to create the fee schedule.
- Create a CoPay fee schedule with patient co-pay amounts
If you’re not totally sure which insurance plan type you should be using, take a look at our Insurance Plan Type Flowchart to help you out.
HMO/DMO Plans: Capitation
Capitation plans, also known as HMO or DMO plans, are used when insurance makes a flat monthly payment, regardless of what procedures are performed or which patients are seen. The setup for Capitation Plans varies depending on how the insurance handles procedures.
TECH TIP: To explore Capitation Plan setup options and tips on capitation fee schedules, see our Decision-Making Guide!
Standard Capitation
If the insurance pays a flat monthly payment, you never bill insurance, and you do not receive payments for specific procedures then set up the insurance plan using the following settings for a Standard Capitation Plan:
- Plan Type: Capitation
- Fee Schedule: Assign the Capitation fees Normal fee schedule (i.e., insurance fees)
- Patient Co-pay Amounts: Assign the CoPay fee schedule for this insurance, if any. This will be the only amount billed to the patient.
- Benefit percentages are automatically cleared for all categories. Double-click the Benefit Information grid to set a deductible if applicable.
Insurance plans set up using the Capitation plant type will work very differently than other plans in both the Treatment Plan and account.
In the Treatment Plan, the ‘Fee’ shown is the insurance fee (from the assigned Fee Schedule). The patient portion (Pat) is the Patient Co-pay Amount for the procedure. If the procedure has a blank entry in the CoPay fee schedule, the procedure fee is zero if the preference ‘Copay fee schedules treat blank entries as zero’ is enabled. If the preference is disabled, the patient portion is 100% of the procedure fee. If no CoPay fee schedule is assigned, the patient portion is always zero. Any remaining portion is shown as a ‘Discount’. There is no insurance estimate.
Once procedures are set complete and billed to the account, only the Patient Co-pay Amount is charged out. Because Capitation plans normally don’t require claims, the procedure is not marked as Unsent, so no insurance claim needs to be created. The procedures will not show up on the Procedures Not Billed to Insurance Report.
Mixed Capitation
If the insurance pays a flat monthly payment, but makes additional supplemental payments for specific procedures (like crowns), then this is Mixed Capitation.
Use the following setting to set up the insurance plan:
- Plan Type: PPO Percentage
- Fee Schedule: Assign the Normal fee schedule we created (i.e., Capitation Fees)
- Patient Co-pay Amounts: Assign the CoPay fee schedule for this insurance, if any.
- Double-click the Benefit Information grid to set all benefit percentages to 100% and set annual max, deductible, etc. as necessary.
In the Treatment Plan, the fee billed (Fee 1123.00) is the office fee, the ‘Capitation Fee’ is shown in the Allowed column (700.00), the Co-pay is patient portion (Pat 450.00), the remaining amount is a write-off (Discount 423.00).
Once procedures are set complete, they will function just like any other insurance plan. The full fee is billed out and the procedure will show Unsent until a claim is created or the procedure is marked Do Not Bill Ins. Procedures will show on the Procedures Not Billed to Insurance Report.
When a supplemental capitation payment is received (i.e., payment for specific procedures), receive the payment as you would for any other claim.
Capitation Payments and Tracking Capitation
When receiving monthly payments from a capitation carrier, payments are not received on individual claims. Instead, there are several other methods for tracking capitation payments. See our manual for detailed instructions.
Several reports can also be run to track capitation:
- Capitation Utilization Report: Find all procedures for a date range performed for capitation, along with the provider fees and the patient co-pay.
- Production and Income Reports: Include production from capitation as Procedure Fee – Capitation Write-offs (as part of the (gross) Production column).
- Aging of Accounts Receivable (A/R) Report: Capitation payments entered under a dummy patient will reflect as credits in the A/R report. This can be avoided by using a Billing Type that is excluded when running the A/R report.
Medicaid / Flat Co-Pay
Medicaid and Flat Co-Pay plans are set up the same way in Open Dental.
Set the Plan Type to Medicaid or Flat Co-Pay. This will clear out the benefit percentages, and Open Dental will estimate no patient portion unless there is a co-pay for the procedure.
In the Treatment Plan, In the Treatment Plan you will see the insurance fee shown as both the billed and allowed fee (Fee/Allowed 220.00), the patient co-pay (Pat 15.00), what insurance is covering (Pri Est 205.00). There is no write-off as the UCR is not being billed.
In the Account, you will see the full insurance fee is charged out and due before a claim is created. Once a claim is created, the estimated insurance payment is 100%, unless there is a patient co-pay, and 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.
If you do want to track write-offs for a Medicaid or Flat Co-pay Plan, set up the plan using the steps for Mixed Capitation instead.
Assigning the correct plan type is especially important for complex plans. With proper setup, benefit and co-pay amounts will be calculated correctly, ensuring the accuracy of your patient accounts, and allowing reporting on carrier payments.
Don’t miss Insurance Plans Part 1: Common Plan Types
If you have any questions or need a hand, reach out to our friendly and knowledgeable Support Techs.
Information in this post reflects features available in Open Dental Version 23.1. For the most up-to-date information, please visit our manual.