More than half of U.S. states have noncovered services laws on the books
The 2011 legislative session was another successful one, with 10 states passing noncovered services bills.
Twenty-six states now have laws that prohibit insurance companies from controlling what a dentist may charge for services dental benefit plans don’t cover.
Provisions in the laws differ depending on the state and some are stronger than others. A noted trend among insurance companies has been to offer a capped fee plan in states that already have noncovered services laws.
“This series of legislative victories is a great example of cost-efficient collaboration between the American Dental Association and the state dental societies and it directly benefits every dentist who utilizes dental insurance,” said Dr. Matthew Neary, chair of the ADA Council on Government Affairs.
The ADA’s legal and state government affairs divisions have flushed out legislative strategies and passed them on to the dental societies so each state doesn’t have to reinvent the wheel, Dr. Neary said. As a result, the states save money because the legislation is pre-packaged, just adjusted to suit their local issues, he said.
The American Dental Association legislatively opposes the practice of capping fees on noncovered services. The ADA opposes any third-party contract provisions that establish fee limits for nonscheduled services, according to Resolution 59H-2009, passed by the House of Delegates.
An approach that’s trending in states with noncovered services laws is one where dental plans offer a capped fee plan when contracts with dentists are established or renewed. That means dentists could only charge fees up to a certain amount for services not covered under a patient’s insurance plan.
Under a plan that caps fees on noncovered services, dentists may charge no more than the dental plan’s set fees for services the plan does not cover. In addition to the basic unfairness of this practice it may, and probably will, mean that dentists will lose money when they provide some of the noncovered services subject to the fee cap.
In states with noncovered service laws, the only fees a dental plan may cap are fees for services the plans cover. A few dental plans have shifted previously noncovered services over to the “covered services” category by reimbursing them at a very low rate (i.e., 5 percent of the regular fee).
In doing so, the plans are in a position to cap these fees because the services are now technically covered. Some state laws mitigate such activity—called de minimis reimbursement—by requiring reimbursements to be at or above 50 percent in order to fit the definition of a covered service.
Dr. Neary hopes and expects more states to pass noncovered services bills in the 2012 legislative session.
“In my mind, once you get 20-25 states, it’s kind of the law of the land,” Dr. Neary said. “The other states will fall in line.”