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Delta Dental of Idaho cutting PPO reimbursement fees to dentists

Despite the problems caused to dentists by the timing of cuts to reimbursement rates, Delta Dental of Idaho is moving forward.

Effective Nov. 1, Delta Dental of Idaho is cutting its preferred provider organization reimbursement fees to dentists on a regional basis by an average of 8 percent, Kym Browning, spokeswoman for Delta Dental, confirmed. Cuts will range from 4 to 13 percent, said Dr. Greg Bengtson, ISDA president.  

The company, a member of the Delta Dental Plans Association, said the cuts are being made because of the economy and how it’s affecting the rising cost of health benefits for businesses.

“We are seeing many employers drop their employee dental coverage or find ways to reduce benefit costs,” Ms. Browning said. “We are making PPO fee adjustments to remain competitive in a changing market and to respond to concerns from employers about the rising cost of employee health benefits.”

The largest share of Delta Dental of Idaho’s premium costs are paid to dentists, and the company has taken steps to keep administrative costs low but must make changes to PPO reimbursement fees to remain competitive, Ms. Browning said.

"By making changes to our PPO fee structure, we can help ensure employers are able to continue offering access to quality, affordable dental benefits for their employees and that our members receive optimal savings when covered by Delta Dental of Idaho,” Ms. Browning said.

Dr. Bengtson and other ISDA officials met with Delta Dental executives several times before a decision was made. One major issue was the way the announcement was made, which gave dentists little time to adjust to the changes.

“We didn’t think it was a professional business way to do things,” Dr. Bengtson said.

So IDSA staff took it upon themselves to get out in front of the news, emailing and faxing members to let them know about the impending cuts. Delta’s mailed letters should have reached dentists around Oct. 1, Dr. Bengtson said.

The dentists’ relationship to Delta Dental is similar to that of David and Goliath, Dr. Bengtson said. Delta says it’s the largest stand-alone dental benefit carrier providing employer coverage in Idaho, with about 380,000 members statewide. With that market share, it’s hard to contemplate dentists not accepting their plan, Dr. Bengtson said.

“Dentists don’t like this situation at all. They don’t like that they are tied by the antitrust laws but they have to abide by them,” Dr. Bengtson said.  “Each dentist must determine the best business practice within his or her own particular business.”

Idaho isn’t the first state where Delta Dental cut fees. Washington Dental Service, also a member of Delta Dental Plans Association, announced in April it would reduce its reimbursements effective June 15 (see story, “”).

For dentists participating in the premier network, the fees were reduced by an average of 15 percent and for those in the PPO network, there was an average decrease of 5 percent. The company also cited the poor economy and keeping pace with competitors as the reason.

Chris Pyle, director of state government and public relations for Delta Dental Plans Association, said the cuts have not been coordinated by the parent company and that the state companies made their decisions independently based on the market.

“These are decisions that are being made by our member companies at the state level to the response to local market conditions there,” Mr. Pyle said.