MAC Dental Plans: What are they and how do they work?

What does MAC mean? How does it work? How do I really explain a MAC dental plan to a client or a member? Our SecureCare team often receives questions about the dental insurance term, MAC.

We discussed MAC dental plans very briefly in a previous article, so here we provide a more in-depth explanation to help you discuss the dental insurance term MAC with clients and members.

The Term MAC is an Abbreviation

MAC stands for Maximum Allowable Charge, a term used to describe a fixed out-of-network reimbursement fee schedule used by dental insurance plans. Dental plans that use this kind of out-of-network reimbursement are generally called MAC plans to help differentiate them from UCR plans.

How Do You Know a Dental Plan is a MAC Plan?

Often the term MAC will be in the name of the dental plan, making is easy to identify the plan. However, sometimes the term MAC is not well-displayed on a PPO dental plan benefit summary. This is a problem, because it can be difficult to know if a PPO dental plan is a MAC plan or a UCR plan. The MAC and UCR benefit designs on the surface can be identical.

However, there is a considerable out-of-network reimbursement difference between MAC and UCR plans that can result in significant out-of-pocket costs if the member is incorrectly advised about the type of plan. To understand UCR dental plans, please refer to our blog article about UCR Dental Plans.

If the term "MAC" is not prominently displayed on the dental plan summary, then it is important to dig deeper to understand the dental plan benefits to know whether it is a MAC plan. Often, at the bottom of a dental benefit summary there will be a description of how non-contracted or out-of-network dentists are reimbursed. The description may explain out-of-network reimbursement in terms of maximum allowable charges, fixed reimbursement schedules or a unique term or abbreviation similar to MAC that the dental insurance company has created to describe their MAC plan.

If there is any doubt as to whether the plan is a MAC or UCR plan, you may want to read the Certificate of Insurance for a description of the out-of-network reimbursement or contact your carrier account representative.

When do Dental Insurance Plans use MAC Reimbursement?

The term MAC, Maximum Allowable Charge, is used by PPO dental insurance plans to describe how they reimburse non-contracted or out-of-network dentists for covered services performed, since these out-of-network dentists have not agreed to the PPO dental insurance plan’s in-network fee schedule as reimbursement.

On the other hand, the term MAC is not used when referring to how contracted or in-network dentists are reimbursed, because those contracted dentists have already agreed to be paid according to the PPO dental insurance plan’s in-network fee schedule. 

How do Dental Plans Determine MAC Reimbursement?

PPO MAC dental insurance plans pay non-contracted or out-of-network dentists based on a fixed reimbursement fee schedule determined by the plan. This MAC fee schedule has little to do with the actual fees charged by dentists in a zip code where a plan member has dental services.

Because MAC non-network reimbursements to dentists are fixed amounts and not based on dentists' fees in a zip code, PPO MAC reimbursements are generally lower than UCR dental plans. For a comparison of MAC and UCR dental plans please see our blog entry titled, "MAC vs. UCR: What's the Dental Difference?"

To set out-of-network MAC reimbursement, a dental plan may base MAC on the plan's in-network fee schedule. Therefore, if a member went to a non-contracted provider for services, the dental plan would pay the provider the same amount that would have been paid to a contracted or in-network provider.

The difference is that the non-contracted provider is not legally bound by any PPO agreement with the dental plan and can balance bill the member. Balance billing means that the provider can charge the member the difference between the dental plan's reimbursement and whatever the dentist is charging for the services.

Dental insurance plans may use other methods to determine their fixed MAC fee schedule. However, the most important take away is that the MAC reimbursement method is entirely at the discretion of the dental plan. This means that the MAC reimbursement can be as low or high as a plan wants. There is no way to accurately compare one plan's MAC reimbursement against another.

MAC Plan Strategy

Employers may deploy a MAC plan to reduce their dental plan premium. Because out-of-network reimbursement is lower on a MAC plan than a UCR plan, the out-of-network claims costs are lower. As a result, the monthly premium is generally lower too.

In addition, MAC plans encourage higher in-network member utilization which will save members out-of-pocket costs when they have dental services done.

MAC Dental Plan Pro: Lower average monthly member premiums than UCR Plans; Increased in-network dental provider utilization.

MAC Dental Plan Con: Higher average balance billing for out-of-network services than UCR plans, which can mean higher patient costs for out-of-network services.