Dental benefit plans in California will be required to comply with enrollees’ assignment of benefit requests if legislation sponsored by CDA passes the state Legislature and is signed into law later this year.
California AB 371 by Matt Haney (D-San Francisco) would do even more to improve the quality of dental plan coverage: It would implement more stringent standards for determining commercial plans’ network adequacy — more specifically, their ability to meet enrollees’ needs through a robust network of providers that too often is absent, leaving patients scrambling for care.
AB 371 along with SB 386, which would give dentists an easy way to opt out of dental plans’ predatory use of virtual credit cards, are the next two steps in CDA’s ongoing advocacy for comprehensive dental plan reform with the primary goal of making dental coverage behave more like health insurance over time.
Bill would close loopholes in AOB, improve access to care
When patients do not have sufficient options for receiving in-network dental care, they receive treatment from out-of-network providers through assignment of benefits. With AOB, dental plans can send the patient’s dental benefits payments directly to the out-of-network dentist.
However, while most medical plans honor patients’ AOB, dental plans are less likely to approve AOB requests. The plans’ AOB denials present a barrier to care for patients, who must pay 100% of the treatment costs upfront and wait to be reimbursed.
By putting an unnecessary financial burden on patients, AOB denials impact patients’ ability to use their already limited dental benefits.
CDA is seeking a solution with AB 371, which is co-sponsored by the Union of American Physicians and Dentists. The bill would require dental plans in California to comply with enrollees’ AOB requests — on par with how most medical plans in the state handle these requests.
“Patients should not be penalized for choosing to see an out-of-network dentist, especially when their plan is unable to provide a robust network,” said CDA President Max Martinez, DDS. “The out-of-pocket costs can be substantial for the patient, resulting in postponed care. AB 371 would close the loopholes in assignment of benefits so patients’ access to care is not harmed.”
Bill would help ensure plans meet network adequacy standards
AB 371 tackles a second, equally challenging problem with dental plans: inadequate provider networks.
Having commercial dental insurance means the plans’ enrollees should have access to quality dental care within a reasonable time and distance from their home and workplace. In fact, California law requires the Department of Managed Health Care and the California Department of Insurance to review commercial dental plans’ ability to meet the needs of enrollees through a robust network of providers.
But, once again, dental plans are not held to the same stringent standards that medical plans are held to, which forces dental patients to travel much longer distances or travel at less convenient times to receive care. In fact, in a 2023 survey by the American Dental Association, patients name inability to find a convenient time or location as one of the top three reasons they don’t visit the dentist.
Additionally, nearly half of Californians with commercial dental coverage have self-insured plans known as ERISA plans that are regulated by federal law and therefore not assessed by DMHC and CDI.
Bill to protect dentists from VCCs returns
CDA members might remember the legislation CDA sponsored last year to protect dentists from predatory virtual credit cards. Dental plans contract with third-party companies to use these VCCs to pay providers their agreed-upon, contracted payments for services, even though VCC payments can charge dental practices up to 10% per transaction through excessive processing fees.
The California Legislature in August 2024 passed the bill (SB 1369). However, Gov. Gavin Newsom vetoed it, and CDA responded with a statement.
CDA is sponsoring a reintroduced version of the bill, SB 386, authored again by Sen. Monique Limón (D-Santa Barbara), with the same primary goal: to bar dental plans from using virtual credit cards as the default method when reimbursing dentists the amount they are owed for contracted services.
And because dental plans are known to reinstitute the VCC payment method even after the provider opts out, even as soon as the next payment, the bill would give dentists a clear and permanent way to opt out of VCC payments.
To resolve the governor’s concerns from last year, SB 386 would not apply if a dentist’s plan contract specifically addresses the type of payment methods for services rendered.
“Dental staff can spend hours repeatedly opting out of VCC payments or accepting the VCC payment with the high fees just to keep the practice running as efficiently as possible,” Dr. Martinez said. “CDA’s new bill would ensure dental practices know exactly what fees they’re paying so they can opt out of accepting a payment method with excessive fees.”
CDA will keep dentists informed about the bills as they move through the California Legislature. Members are encouraged to read or subscribe to CDA’s weekly email, Inside California Dentistry, sent every Friday morning, for the latest.
CDA files final brief in legal action against Delta Dental of California
Legal action is also part of CDA’s long-term strategy for dental plan reform. In the next step in legal action against Delta Dental of California, CDA filed an Appellants’ Reply Brief on Feb. 14. This final brief in the appeal process allows CDA to challenge legal arguments in Delta Dental’s response brief. Because appeals take time, oral arguments may not be scheduled for several months. Watch CDA’s Dental Plan Action Center for updates.