Understanding third-party payer contracts crucial for practice success

ADA offers help to dentists through a myriad of resources including a Free Contract Analysis Service

Editor’s note: Dental Insurance Hub is a series aimed to help dentists and their dental teams overcome dental insurance obstacles so they can focus on patient care.

There are obligations throughout life that are bound through contracts, whether it be employment, mortgages or even car loans agreements.

A good rule for people signing a contract is to read the fine print, and the same is applicable in the dental world.

Participating provider agreements will often explicitly note that the provider manual or processing policies are a separate document incorporated by reference. Payers often retain the right to change these referenced documents anytime without the need for a contract amendment. In some cases this right may also apply to changes to the contract language itself.

While some agreements will require plans to communicate these changes personally to participating dentists by regular mail or fax, some agreements may allow plans to use impersonal methods, such as in their newsletters, e-mail blasts or by simply updating the policies on their websites.

“Understanding the details of contracts made between dentists and third-party payers is crucial for dental practice success, especially since these contracts are drafted by payers and may contain terms and conditions that favor the payers’ wants and needs over those of dentists,” said Kevin Dens, D.D.S., chair of the ADA Council on Dental Benefit Programs. “Therefore, when receiving a dental insurance contract for consideration, it should be read, understood and thoroughly evaluated before determining if signing the contract is a sound business decision.”

The ADA also provides a resource for handling contract negotiations with third-party payers, including negotiation basics and some practical how-to’s for dentists who want to discuss fees with payers on an individual basis.

“It is recommended that dentists do an annual review of their existing participating provider agreements,” said Dr. Dens. “If a dentist does not have a copy of his or her signed agreement, the dentist should ask the plan for a copy. Dentists need to be aware that amendments to contracts or to the provider manual or other plan policies may happen and that these amendments may be posted on payers’ websites or buried in newsletters. As onerous as it can seem at times, be sure to pay attention to all forms of communications from payers and do not ignore anything sent by them.”

Dr. Dens said that special attention should be made to clauses that impact a practice’s bottom line (i.e., non-billable and noncovered services, most favored nation, and affiliated carrier clauses) and national processing policies (i.e., bundling, down coding and least expensive alternative treatment clauses).

ADA online resources on contracts and clauses including an on-demand webinar titled, Understanding PPO Contracts: What You Need to Know, are available at

ADA members in need of helpful advice should also consider taking advantage of the free Contract Analysis Service offered by the ADA.

“The Contract Analysis Service is a wonderful member benefit,” said Dr. Dens. “It’s important to understand the terms of the participating provider contracts you are considering entering into so that you can decide if they’re best for you and your patients, as well as to avoid unpleasant surprises in the future.”

To use the service, submit a copy of the unsigned contract and an analysis request through your state or local society prior to signing the contract. Requests submitted directly to the ADA will be charged $50 per contract analyzed.

The service provides general information only about the terms of agreements, which is not, nor is it intended to be, a substitute for legal advice. The service does not provide advice on the merits of a contract and does not recommend whether a contract should or should not be signed. A dentist should consult his or her own attorney for legal advice pertaining to the agreement submitted for analysis and should exercise independent judgment when deciding whether to sign a contract.

The ADA has an online hub for ready-to-use dental insurance information that can help dentists address and resolve even their most frustrating questions at


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