ADA News

North Brunswick, N.J.—New Jersey has become the latest battleground for the debate over noncovered services and anti-assignment clauses.

The New Jersey Dental Association’s executive director, Arthur Meisel, who is also an attorney, filed suit against Metropolitan Life Insurance Co. on March 26 in Superior Court of New Jersey. Mr. Meisel alleges that MetLife is violating state law for establishing fees for services they do not cover.

"You have companies establishing a maximum fee that can be charged by a dentist even when the insurance company or carrier has no obligation to pay," Mr. Meisel said.

"That does not appear to be the kind of authority that has been delegated to insurers by legislators, because the setting of maximum fees for practitioners would appear to be a function of the state or federal government, not a function of insurance companies," he said.

A separate suit by NJDA against Horizon Blue Cross Blue Shield, also filed March 26 in Superior Court of New Jersey, deals with anti-assignment clauses.

New Jersey is just the latest state dental association to  petition the government for action against insurance companies looking to control how much money dental practices can charge for services they don’t cover. Twenty-five states have filed legislation to change the practice, and bills were signed into law in Rhode Island, Washington, South Dakota, Idaho and Oregon.

The American Dental Association opposes this insurance practice and encourages and supports efforts by its constituent societies to seek legislative remedies prohibiting these contract provisions.

"It's clearly unfair for them to become involved in the payment and, ultimately, influence decisions between the doctor and patient regarding services that they don’t even choose to cover," said Dr. Ron Tankersley, ADA president.

The complaint against MetLife references language written in New Jersey state statute and quotes a provision in a document written by the insurance company that states, "A procedure can be a covered expense under one plan and a non-covered expense under another plan. The PDP [preferred dentist program] allowance applies in both situations, and a PDP participant can not be billed any amount in excess of the PDP allowance (even if the service is not covered by the PDP participant's plan)."

Mr. Meisel points out that New Jersey law only discusses covered services and does not reference noncovered services when it explains payment arrangements.

"That is why we are saying that the carriers, at least in New Jersey, are exceeding the scope of authority that has been delegated to them by statute," Mr. Meisel said.

The Horizon lawsuit addresses the issue of anti-assignment clauses. When a patient is permitted to assign dental benefits to the dentist, the assignment authorizes the insurance company to pay the dentist directly instead of reimbursing the patient for incurred costs.

An anti-assignment clause leaves it to the insurance company’s discretion whether to honor the assignment of benefits, Mr. Meisel said. The idea is to persuade dentists who are not participating in a plan to enroll, he said.

The New Jersey legislature passed and the governor signed in January a statute that requires that assignment of benefits be honored in medical and hospital plans, Mr. Meisel said. While the law’s language does not specify it applies to dentistry, Mr. Meisel maintains that there are medical and hospital plans that provide some coverage for dental services, thus including it.

Mr. Meisel also believes the law should include dental services because if the legislature is going to require assignments be honored in medical and hospital plans—which, if physicians are charging for out of network services could end up in bills totaling tens of thousands of dollars—it would be ridiculous not to do the same for dental coverage, with a typical maximum of $1,500.

"It would seem to make absolutely no sense to not honor an assignment for an amount of up to $1,500," Mr. Meisel said.

At press time, MetLife spokeswoman Shalana Morris said the company had no comment because it had not seen the lawsuit. Also at press time, Horizon Blue Cross Blue Shield had not responded to an ADA News request for comment.

The next step in the legal process is for the two insurance companies to file a response in court, Mr. Meisel said.