EMPLOYERS

MAC vs. UCR Dental Plans

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MAC vs. UCR: What’s the difference?

While staying in-network is often the most cost-effective option, you can still affordably visit an out-of-network dentist. Your cost will depend on whether your dental plan uses MAC or UCR fees. What do these terms mean, and how do they differ? We’re glad you asked!

MAC

Means: Maximum Allowable Charge

Definition: The maximum amount your insurance company pays for a covered service from a provider, whether they’re in-network or out-of-network. What’s the difference, then? It comes down to your out-of-pocket cost. For instance, an in-network dentist may charge more for a procedure than your plan’s MAC fee. Because they’re in-network, though, they’ve agreed to accept the MAC fee. The difference between the provider’s charge and the MAC fee would be written off — you would not owe this difference. Your insurance company would then cover a percentage of the MAC fee, and you would owe any outstanding balance (coinsurance), assuming your deductible has been met. An out-of-network dentist, however, isn’t contractually obligated to accept the MAC fee. That means you’re responsible for coinsurance and any difference between the provider’s charge and the MAC fee.

Example*: This is getting a little complicated, so let’s use an example. Say you need a tooth extraction, and your particular dental plan covers 80% of the cost for the procedure. The MAC fee for a tooth extraction is $100 in your area, and your dentist — who is in-network — charges $125. Your insurance company would cover 80% of the MAC fee, which comes out to $80. You would owe $20, and the provider would write off the remaining $25 because they’ve agreed to accept the MAC fees as part of the dental network.

Now, let’s pretend your provider is out-of-network. In this scenario, the provider still charges $125 for the extraction and your insurance company would still cover 80% of the MAC fee ($80). Because the provider is out-of-network, they aren’t obligated to accept the MAC fee, which means they’re still owed $125 in total. Assuming your deductible has already been met, you would pay the remaining $45 owed.

The table below illustrates this example:

Procedure Tooth Extraction (INN) Tooth Extraction (OON)
Coinsurance 80% 80%
MAC Fee $100 $100
Provider Fee $125 $125
Your Insurance Company Pays $80 $80
You Pay $20 $45
Provider Write-Off $25 $0

 

UCR

Means: Usual, Customary, and Reasonable

Definition: The fee for a specific procedure based on what providers in your geographic area charge for it on average. The UCR value is indicated as a percentile and is calculated by a third party based on claims for that procedure in your area (defined by the first three digits in your provider’s zip code). Let’s use a standard dental plan to elaborate on this. The 90th UCR is typical for many of our plans. This means the UCR value for a given procedure will be set so that 90% of providers in your area charge that amount or less. This amount is the maximum your insurance company will pay for a covered service from an out-of-network provider.

Example*: UCR gets a bit complicated, so let’s go back to the tooth extraction example. To keep things simple, we’ll say your plan still covers the procedure at 80%. Instead of MAC, your plan uses the 90th UCR, meaning 90% of the dentists in your zip code would charge that amount or less for the procedure. We’ll say that charge is $110 in this case. Your insurance company would cover 80% of that $110, which amounts to $88. If your dentist charged $125, you would pay the remaining $37 if your deductible has already been met.

Now, let’s say the dentist charges $100 for a tooth extraction, which is less than the $110 UCR fee. Since the office fee is less than the UCR fee, we would cover a portion of the office fee. We’d cover 80% of that $100 cost ($80), and you’d owe the remaining $20.

Here’s a table that shows both scenarios side by side:

Procedure Tooth Extraction Tooth Extraction
Coinsurance 80% 80%
UCR Fee $110 $110
Provider Fee $125 $100
Your Insurance Company Pays $88 $80
You Pay $37 $20

Helpful details to know:

  • The 90th UCR is standard for many dental plans.
  • Dental Insurance companies usually receive their UCR claims data from third-party organizations, such as FAIR Health.
  • UCR plans are often best for groups in remote areas with few in-network dentists.

Dental Insurance is Essential

Dental Insurance is the second most requested employer benefit. Employers can even offer this as a voluntary benefit.