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Iowa yields success with noncovered services law

State Supreme Court upholds Iowa Dental Association's interpretation of terms

Des Moines, Iowa—It took three years, but the Iowa Dental Association was successful in having its interpretation of one of the country's more unique noncovered services laws upheld by the state Supreme Court.

The Iowa Supreme Court on May 17 reversed a previous decision by a district court that sided with the insurance industry's interpretation of the noncovered services law passed in 2010. Noncovered services laws prevent insurance companies from controlling what a dentist may charge for services dental benefit plans don't cover.

"This was a huge victory for dentists and for small businesses," said Dr. Mary Mariani, IDA president. "This is a victory for our autonomy. It's the patients and the dentists making the decisions rather than the insurance companies."

The debate was over whether the services in dispute were "reimbursed" or "reimbursable."

"Following enactment of this law, insurers continued imposing maximum fees on services that were actually reimbursed under their dental plans, such as semiannual teeth cleanings," according to the Supreme Court opinion. "But some insurers went further. They placed maximum fees on services that were potentially reimbursable but not actually reimbursed because of some plan limit, such as a frequency limit."

The law passed by the Iowa state legislature used the term "reimbursed" in defining what a covered service is The IDA interpreted it to mean that, for example, if a patient had a plan that allowed for only two cleanings in a year, and wanted a third one, the third cleaning would be considered a noncovered service because it would not be reimbursed by the patient's insurance plan, even though it was a service that would ordinarily qualify for coverage, said Larry Carl, IDA executive director. Therefore, the insurance company could not determine what a dentist charged for that extra cleaning.

The insurance companies, however, took the law to mean that if they had ever covered a specific service, they should be able to determine what the fee is, said Dr. Mariani. After the law was enacted in 2010, the insurance companies placed maximum fees on services that were potentially reimbursable but were not actually reimbursed because of a plan or frequency limit.

In 2011, the IDA asked the state insurance commissioner to rule that an insurer cannot impose a maximum fee for services that are not actually reimbursed by the dental plan due to contractual limitations such as waiting periods, frequency limitations, deductibles, and maximum annual benefits. Meanwhile, the Federation of Iowa Insurers, which represents Wellmark Blue Cross and Blue Shield of Iowa, Delta Dental of Iowa and Principal Financial Group among others, lobbied on behalf of the insurance companies and was able to sway the insurance commissioner to rule in its favor.

The IDA took its case to a district court judge, who also ruled on the side of the insurance companies. The IDA then appealed the decision to the Iowa Supreme Court, which ultimately struck down the district court's ruling and the opinion of the insurance commissioner.

"This was also a victory for the patients of Iowa because it's just one less thing the insurance companies can have their nose in," Dr. Mariani said. "We may have clinked Goliath's armor just a little bit."

Mr. Carl described Iowa's law as "unique among the 30 noncovered services statutes around the country" because it has the language and now the state Supreme Court's backing of not allowing insurance companies to dictate fees for any service not covered under a patient's plan. IDA member dentists were willing to see their state association use resources to fight this case out of principle, Mr. Carl said.

"Based on feedback from the dentists, most of them wouldn't charge more than what they charge for, say, the first and second cleaning but their position is that the law is the law and, as usual, the insurance carriers are wanting to interpret the law the way they want and dentists weren't about to have that in Iowa," Mr. Carl 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 noncovered services, according to Resolution 79H-2010, passed by the House of Delegates.