Why These "Hidden" Codes Could Be Undermining Your Reimbursement—and What to Do About It

You’ve done a beautiful posterior composite. You submit the claim. Then it happens:

The insurance company pays as if it were an amalgam—less than what you billed, less than what the service is worth.

This is called a downgrade or alternate benefit, and it’s one of the most common tactics insurers use to control costs and reduce reimbursement.

Now here’s the question:

Should you include these downgrade codes—like amalgam fillings or base metal crowns—in the fee schedule you’re negotiating with insurance?

Yes. Absolutely. And here’s why.

First, What Are Downgrade Codes?

Downgrade (alternate benefit) codes are less expensive procedures that insurance companies use as a substitute when processing claims for more modern or esthetic services.

For example:

Treatment ProvidedCode BilledDowngraded ToPosterior compositeD2391–D2394D2140–D2161 (amalgam)All-ceramic crownD2740D2791 (full cast base metal)Resin bridgeD6930D6240 (porcelain fused to metal)

If your contract includes an alternate benefit clause (and most do), insurers will reimburse you based on the lower-fee downgrade code—not the code you actually submitted.

Why Include Downgrade Codes in Fee Negotiations?

Most dentists focus on their most commonly submitted codes during PPO negotiations. That’s smart—but not the whole picture.

Here’s why you should absolutely include downgrade codes (like D2140–D2161) in your negotiations:

1. They Determine What You’re Actually Paid

Even if you always do posterior composites, your reimbursement is often based on the amalgam fee. If your amalgam fees are too low, you’re losing money—every single time.

Example:
You place a D2392 (posterior composite, 2 surfaces), fee $230
Insurance downgrades to D2150 (amalgam, 2 surfaces), allowable $110
That’s a $120 difference. And if your D2150 fee is outdated? You lose even more.

Negotiating a higher amalgam fee raises your composite reimbursement, even if you never submit an amalgam code.

2. You’re Already Being Paid Based on Them

Insurance doesn’t care what you perform—they care what they allow. If their plan pays based on alternate benefit codes, then your revenue is directly tied to those downgrade codes, whether you bill them or not.

So why wouldn’t you want to raise them?

3. It Reduces Patient Pushback

Many dentists are allowed to balance bill the difference between the downgraded allowance and the actual fee. But if the insurance pays more (thanks to a higher negotiated downgrade code), the patient pays less out of pocket—and is more likely to accept treatment without hesitation.

How to Include Downgrade Codes in Negotiation

When submitting a fee schedule proposal or engaging a third-party negotiator, make sure you:

• Include downgrade codes in your list (D2140–D2161, D2791, etc.)

• Highlight them as “impact codes” that directly affect reimbursements on higher-cost procedures

• Explain in writing how these codes affect actual reimbursement due to alternate benefit clauses

Sample note to include:
“Although we do not routinely perform amalgam restorations, these codes are routinely used as alternate benefits. Their allowed fees directly impact what we are reimbursed for composite restorations, so we are requesting a fair market adjustment.”

Tip: Know Your Contract

Before balance billing the difference between the downgrade and your actual fee, confirm:

• Whether your PPO contract permits balance billing on alternate benefits

• Whether the patient EOB clearly explains the downgrade

• That you’ve disclosed this policy to patients up front

If you’re out-of-network, you’re not bound by PPO write-offs. But even in-network, some plans allow balance billing in downgrade scenarios—especially if the downgrade is considered a “non-covered service.”

Final Takeaway

Your insurance fee negotiation strategy should go beyond the procedures you perform most often. You also need to consider the codes insurers are actually paying you on—even if you didn’t bill them directly.

That means:

• Including downgrade codes in your negotiation,

• Understanding how they impact your real reimbursement, and

• Advocating for fair fees on procedures that influence your entire revenue cycle.

Downgrade codes are not throwaway codes. They are the silent levers insurance companies pull to reduce what you’re paid—and they should absolutely be part of your negotiation plan.

Benjamin Tuinei

Founder - Veritas Dental Resources, LLC
Phone: 888-808-4513

Services:
PPO Fee Negotiators | PPO Fee Negotiating | Insurance Fee Negotiating
Insurance Credentialing | Insurance Verifications

Websites:
www.VeritasDentalResources.com | www.VerusDental.com