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California passes noncovered services bill

California passes noncovered services bill
Dr. Stewart

Sacramento, Calif.—Add California to the list of states that have passed bills prohibiting insurance companies from controlling what a dentist may charge for services the insurers don’t cover.

California’s noncovered services bill was signed into law by Gov. Arnold Schwarzenegger on Sept. 30. It goes into effect Jan. 1, 2011.

California is the 16th state to pass noncovered services legislation, joining Alaska, Arizona, Idaho, Iowa, Kansas, Louisiana, Mississippi, Nebraska, North Carolina, Oklahoma, Oregon, Rhode Island, South Dakota, Virginia and Washington.

The bill allows dentists to charge up to their usual and customary fees that would apply to most private pay patients for services not covered by a dental benefit plan. It also requires dental plans to provide a disclosure statement in their enrollees’ evidence of coverage document explaining that dentists may charge their usual and customary rate for services not covered under the plan. The document also must advise that the dental treatment plan and costs can be reviewed and encourage patients to contact their plan or insurance broker for further information.

The law is the result of lobbying by the California Dental Association, whose House of Delegates passed a resolution in November 2009 directing the association to consider options, including legislation, that would ban the fee restrictions on noncovered services.

“CDA members told us that this was a top priority,” said Dr. Thomas Stewart, CDA president. “Dentists wanted legislation that would end the practice of insurance companies capping fees on services they don’t cover, and we are thrilled the governor recognized the bill clearly made sense.”

The process was made easier after the CDA and the California Association of Dental Plans committed to improving their dialogue with one another. After the CDA’s House of Delegates passed its resolution, noncovered services was put to the front burner.

Drafting the bill and getting legislators on board proved tricky.

“The wide philosophical differences within the California legislature made this a very challenging issue to pursue, despite CADP’s neutral position,” Dr. Jean Creasey, chair of CDA’s Government Affairs Council, said in CDA’s magazine in September. “Some relatively liberal legislators were concerned that the bill could allow dentists to overcharge patients for noncovered services once the fee caps were moved, while more conservative legislators were generally concerned about any perceived ‘mandates’ restricting the insurance marketplace. Our challenge, therefore, was to convince both sides that (the bill) was a reasonable approach to the issue.”

The American Dental Association legislatively opposes any third party contract provisions that establish fee limits for nonscheduled services, according to Resolution 59H-2009, passed by the House of Delegates.

The resolution also states the ADA will actively pursue getting federal legislation passed to prohibit ERISA-covered plans from applying such provisions. The ADA also encourages constituent dental societies to pursue state legislation to prohibit insurance plans from applying such provisions.