A dental office recently contacted CDA’s dental benefits analyst with the following question:
I have no direct in-network contract with a certain benefit plan, but this noncontracted plan processed a claim saying it had a right to a contracted fee discount of another benefit plan that I do have a contract with. Can the noncontracted plan legally do this?
The short answer is, yes, it is legal. California law allows preferred provider organizations to “sell” or “lease” access to both their contracted provider networks and their discounted fees.
But the Practice Support analyst also offered the more thorough explanation, as follows.
CDA sponsored legislation (Assembly Bill 954) that took effect Jan. 1, 2020. That law requires dental plans to be more transparent about the leasing of their dental networks and includes the following provisions for contracts entered into on or after Jan. 1, 2020:
- Requires dental plans to name the parties that will have access to a provider contract.
- Offers the dentist the ability to opt out of having their existing provider agreement leased to other entities without impacting their original plan contract.
- Requires dental plans to maintain an up-to-date website list of all third parties that have access to a provider network contract and requires that the plans update that information at least once every 90 days.
- Requires dental plan agreements to clearly identify in specified language and font the contractual clause that allows network leasing.
- Requires dental plans to identify the source of the discount on all written or electronic remittance and the name of the plan that the dentist has a direct contract with.
- Any third-party’s right to a provider discounted rate ceases as of the termination date of the direct provider contract.
- Requires the plan with which the dentist has a direct contract to provide a copy of the provider network contract within 30 days of a provider’s request.
Opting out of being leased to other plans: Next steps
After the CDA analyst reviewed the provisions of the law with the office, the office indicated that they wished to opt out of being leased to other plans. Hearing that information, the analyst advised the office to inform the plan in writing that the office wished to opt out of being leased to other plans and to include the following information in the letter:
- Practice and/or dentist’s tax identification number
- Practice address
- Office contact name, phone number and email address
- Statement informing the plan of wish to opt out of being leased or sold to another plan
- Signature of the billing dentist
Reminder: Medicare or Medicaid dental plan agreements are exempt from the requirements of the law.
CDA’s expert analysts are available to answer members’ questions about working with dental benefit plans. Members and their staff can simply submit a question online using our Dental Benefits Issue Submission Form, and an analyst will evaluate it for possible resolution and communicate clear next steps.