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Dental Insurance Contract Concerns

When you receive a dental insurance contract, you should read, understand and evaluate it thoroughly to determine if signing the contract is a sound business decision. Below we highlight common clauses within provider contracts and offer suggestions that you may use to negotiate with the payer. We offer you a comprehensive list of questions to consider as you read the contract: What every Dentist Should Know Before Signing a Dental Provider Contract (PDF).

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Resources for handling contract issues

Handling Contract Negotiations [PDF]

If you are a participating provider with one or more dental benefit plans, you may need to negotiate your fee increases. This negotiation should be done individually, between only you and your plan, and not with or on behalf of other dentists. Before you enter negotiations with a payer, prepare your talking points and do your homework.

Handling Contract Negotiations
A Carrier's Perspective on Audits [Webinar]
The Growing Impact of PPO Leasing on Your Practice [Webinar]

Contract issues to consider

Hold Harmless Clause
A. Example - “[Insurance Company] will not be liable for any claim, injury, demand or judgment arising from any acts or omissions of Dentist, and Dentist will indemnify [Insurance Company] for any losses arising out of any acts or omissions of Dentist, including attorney’s fees.”

B. Analysis
1. Indemnify means to pay or reimburse, so under this clause the dentist is agreeing to pay for the insurance company’s losses that arise out of dentist’s actions.
2. Broad language: This language is very broad, and the dentist may be assuming liability for losses for which he/she would not normally be fully responsible without this language. For example, imagine a situation where an insurance company is at least partially at fault. Maybe restrictions on referrals to specialists contributed to a situation that the patient thinks resulted in malpractice. If the dentist is solely liable under this clause, then the dentist pays all.
3. Such a contractual obligation may not be covered by the dentist’s professional liability insurance. The dentist may wish to consult with his or her legal counsel and malpractice insurer about the legal and financial implications of this clause.
C. Suggested Changes
1. Negotiate for the insurance company to provide a reciprocal hold harmless clause in favor of the dentist, in which the clause would require the insurance company to pay the dentist for any loss that the dentist incurs due to any acts or omissions on the part of the insurance company.
Recoupment Clause
A. Example - “Dentist shall notify [Insurance Company] of any overpayments or payments made in error, and [Insurance Company] may offset future claim payments due to the Dentist.”

B. Analysis
1. Typically, it is the insurance company that is responsible for notifying the dentist of an alleged overpayment and not the other way around. Will the dentist be held responsible for failing to notify the insurance company of an overpayment even if the dentist does not believe that he or she has been overpaid?
2. Further, it appears under this language that the insurance company may deduct payments from the dentist’s future payments even if the dentist disagrees that he or she owes anything to the insurance company. Do procedures exist for the dentist to challenge deductions made by the insurance company?
3. Finally, is there a time limit in which the insurance company may demand reimbursement or offset future payments? The dentist would be wise to determine whether the laws in his or her state place a time limit on when the insurance company can demand reimbursement or offset the dentist’s future payments.
C. Suggested Changes
1. Modify the clause so that it is clear that the dentist will only be obligated to notify the insurance company of an overpayment or payment made in error if the dentist actually believes that an overpayment or error has occurred. Example – Add the following words (in bold) to the beginning of the sentence: “If Dentist believes that an overpayment or payment made in error has occurred, then Dentist shall notify [Insurance Company]….”
2. Propose adding language limiting the time in which an insurance company may demand reimbursement from the dentist or offset the dentist’s future payments.
Affiliated Carrier Clause
A. Example - “Dentist agrees to participate in the Plan and in any other plan or program for which [Insurance Company] has agreed to provide access to the Plan.”

B. Analysis
1. This is sometimes referred to as an “affiliated carrier clause” because it allows the insurance company to grant to a third-party insurance company the right to access the rates offered under the insurance company's provider agreement, even though the third-party insurance company is not a party to the agreement. Patients of the third-party insurance company may then access the discounted rate of the dentist under the agreement, even though the patient is not directly a member of the original insurance plan(s) to which the provider agreement relates.
2. In such case, the dentist may be expected to treat a larger percentage of patients under the terms of the agreement than the dentist originally anticipated. Also, will the third-party insurance company be bound by the terms of the agreement, including the fee arrangement? Or will the third-party insurance company be able to lower the reimbursement amounts owed to the dentist for services rendered?
C. Suggested Changes
1. Add language requiring the insurance company to notify the dentist in writing before the establishment of any such third party arrangements and allow the dentist to opt out prior to the arrangement becoming effective.
Most Favored Nations Clause
A. Example - “Dentist agrees that charges for Covered Services provided to Covered Persons will be at the lowest rate as is charged to other patients.”

B. Analysis
1. The dentist would be wise to consider the financial impact of compliance with this requirement. Also, it is unclear whether fees charged to underprivileged patients are to be considered in determining the rate charged to other patients.
2. The U.S. Department of Justice has successfully challenged certain similar requirements, known as "most favored nation" clauses. However, in order for such a contract provision to be successfully challenged, there would have to be evidence that, as a consequence of the contract provision, other insurers or health plans were unable to compete with the insurance company offering the contract containing the language at issue.
C. Suggested Changes
1. Delete the provision.
Automatic Renewal Clause
A. Example - “This agreement shall be effective upon execution by both parties and shall continue in effect for successive one-year periods, until affirmatively terminated by either party according to the termination provisions set forth below.”

B. Analysis
1. The agreement automatically renews and will never expire. The only way to end the agreement is for a party to affirmatively terminate it.
2. The dentist would be wise to ensure that the termination provisions allow the dentist to easily terminate the agreement without cause and for any reason.
3. Because there is no expiration date, the dentist may not be able to re-negotiate the contract terms without first terminating it or threatening to terminate it.
C. Suggested Changes
1. Limit agreement to two years.
Compliance with Policies and Procedures Clause
A. Example - “Dentist will comply with all policies and procedures governing the administration of the Plan, including but not limited to: claim submission, complaints, grievances, utilization review, and quality management, as set forth in the provider manual, as such manual may be amended by [Insurance Company] from time to time.”

B. Analysis
1. The dentist will be bound by the terms of the provider manual and any and all policies and procedures governing the plan.
2. What is meant by “comply with” all such policies and procedures? Does this mean that the dentist may not object to decisions made by the insurance company pursuant to the provider manual? Can the dentist appeal decisions under this wording?
3. The insurance company may modify the provider manual from time to time. Thus, it appears that the dentist’s consent or signature would not be required to amend the policies. If the dentist objects to such changes, will dentist be able to terminate the agreement?
C. Suggested Changes
1. Require that the dentist be notified in writing in advance of changes to the provider manual.
Plan Participation Clause
A. Example - “Dentist agrees to participate in any plan or product offered or administered by [Insurance Company].”

B. Analysis
1. The dentist would be wise to clarify in which plans or products he or she will be expected to participate. Will the dentist be expected to participate in all plans or products offered by the insurance company currently and in the future? Will the dentist be given the opportunity to decline to participate in individual plans or products?
2. If applicable, the dentist may wish to check with his or her attorney to determine whether any laws in the dentist’s state limit the ability of insurers or health plans to require contracting providers to participate in all of their plans or products.
C. Suggested Changes
1. Add language requiring the insurance company to notify the dentist in writing in advance of any additional plan or product in which the dentist will be expected to participate and allow the dentist to opt out prior to the dentist’s participation in the new plan or product.
Influencing Members' Choice of Dentists Clause
A. Example - “[Insurance Company] reserves the right to direct members to selected dentists and/or to influence a member’s choice of dentist. This may include, but is not limited to, the segmentation or tiering of the dental network.”

B. Analysis
1. The dentist may wish to clarify what factors the insurance company will use in determining whether to direct members to a particular dentist. For example, will dentists who agree to charge members less than their usual fees for non-covered services be given additional marketing and promotion over those who do not? What other factors may be taken into account?