Managed Care Dental Insurance: PPO and DHMO

A dental PPO ("preferred provider organization") is analogous to a medical PPO. Patients are free to see any provider within the insurance company's PPO network. Participating dentists have agreed to discounted rates negotiated by the insurance company. This insurance follows a traditional "fee for service" model, meaning that the dental practice receives a fixed fee for each procedure performed.

With some forms of PPO dental insurance, you can see any dentist you like. However, you will receive a better deal when you visit a network dentist than a non-participating dentist. Some dentists will participate in PPO plans but avoid HMO ones.

A dental HMO (DHMO, for "dental health maintenance organization") follows the medical HMO model. Patients are assigned to a primary provider. This kind of plan is also known as a dental capitation program or a "cap" program. Unlike PPO programs, dentists do not receive fee-for-service payments. Instead, the dentist receives a set allowance per patient per month, regardless of how much or how little care that patient requires. This allowance is called a "cap."

If you have HMO dental insurance, it will only cover visits to in-network providers. If you see a dentist or dental specialist outside of the HMO network, you will foot the entire bill yourself.

A dental EPO ("exclusive provider organization") works much like an HMO, at least from a patient's perspective. Your treatment will only be covered if you see a dentist within the insurance provider's EPO network. Participating dentists are paid per treatment, unlike HMO dentists who receive a fixed monthly payment per patient.

Direct reimbursement (DR) is a fee-for-service plan that is self-funded by the patient's employer. Employees are free to see any dentist they wish. Rather than paying monthly premiums or caps, employers pay a portion of each dental treatment received.