Understanding Dental Code D9985

When to Use D9985 dental code

The D9985 dental code is designated for the application of sales tax to dental procedures, products, or services when required by state or local law. Not all states mandate sales tax on dental services, but in those that do, dental practices must accurately report and bill for this additional charge. Use D9985 only when you are legally obligated to collect sales tax on a transaction—never as a catch-all or convenience code. Always verify your state’s current tax regulations to ensure compliance and prevent billing errors.

Documentation and Clinical Scenarios

Proper documentation is crucial when applying D9985. The patient’s ledger and invoice should clearly itemize the sales tax as a separate line, referencing D9985. This transparency helps patients understand the charge and supports your office in the event of an audit. Common scenarios where D9985 may apply include the sale of dental products (such as toothbrushes, whitening kits, or mouthguards) or elective procedures that are not exempt from sales tax. Always document the specific product or service, the tax rate applied, and retain supporting records for at least the minimum period required by state law.

Insurance Billing Tips

Most dental insurance plans do not reimburse for sales tax, as it is considered a patient responsibility. When submitting claims, list D9985 as a separate line item, but do not expect payment from the carrier. Instead, ensure your practice management software is configured to add D9985 to the patient’s portion of the bill. If an Explanation of Benefits (EOB) is received that denies D9985, communicate clearly with the patient about why the charge appears and that it is not covered by their plan. For practices in states where sales tax rules change frequently, schedule regular reviews of your billing protocols to stay compliant and avoid revenue cycle disruptions.

Example Case for D9985

Scenario: A patient purchases a custom nightguard from your practice in a state where dental appliances are subject to sales tax. The total cost of the nightguard is $400, and the applicable sales tax rate is 7%.

Step-by-step process:

• Verify the state’s sales tax requirements for dental appliances.
• Calculate the sales tax: $400 x 0.07 = $28.
• On the patient’s invoice, list the nightguard as one line item and D9985 (sales tax) as a separate line for $28.
• Submit the claim to insurance for the nightguard only; do not expect reimbursement for D9985.
• Collect the $28 sales tax directly from the patient at the time of service.
• Retain documentation of the transaction and tax remittance for your records.

This approach ensures compliance, transparency, and accurate revenue tracking for your dental practice.