Washington State Dental Association dentists file complaint against state Delta Dental
January 16, 2018
Seattle — Five provider dentists of Delta Dental of Washington who are also on the Washington State Dental Association’s board of directors filed a complaint in early January with the Washington State Office of the Insurance Commissioner against Delta. The five allege that the third-party payer misled state regulators when it completed a corporate reorganization in 2013.
The Delta Dental of Washington board has since cited that reorganization as the reasons for vetoing some of bylaw amendments proposed by member dentists at a special meeting in September.
During that meeting, these proposed amendments — which are allowed to be made under state law, the company’s governing documents and past practice, according to dentists filing the complaint — were approved by 91 percent of the 2,300 votes cast. According to Dr. Cynthia Pauley, the WSDA president, the bylaw amendments were meant to, among other things, improve Delta’s patient focus and address how dentists could become more engaged stakeholders in Delta’s corporate decisions and catalyze reforms.
The bylaw amendments would have required that Delta:
- Pay a larger percentage of the premiums it collects as patient claims or refund the excess to premium payers.
- Agree to an independent review process when disputes arise between the insurer and a provider or patient on a claim, as is the case in the medical insurance arena, said WSDA Executive Director Bracken Killpack.
- Require additional disclosures of the company’s administrative, lobbying and advertising expenses.
- Require additional reporting of its claims-paying results.
- Provide additional venues for membership involvement in decision-making and corporate governance.
The complaint argues that the Delta board of directors responded by vetoing most of the bylaw amendments, calling a number of them invalid and inapplicable due to the company’s 2013 corporate restructuring.
The complaint further alleges that Delta’s board misled the Office of Insurance Commissioner to believe that there was no objection to the reorganization from its member dentists.
But Mr. Killpack said Delta did not provide its member dentists with actual notice of the reorganization until after the process was complete, when it was buried in a footnote to the financial statements in its annual report, published in 2014.
“Given this lack of full and timely disclosure, member dentists had no opportunity to weigh in, no reason to critically examine how the proposed changes would negatively impact their rights,” said Dr. Pauley. “We had no chance to express any concern or opposition.”
The complaint also alleges that Delta inaccurately told the Office of the Insurance Commissioner that the corporation’s member dentists had no right to vote to approve the reorganization or proposed amendments to the corporation’s articles of incorporation or bylaws. The complaint alleges that member dentists are allowed to do so.
“The Office of Insurance Commissioner complaint is especially timely and important,” said Dr. Todd Irwin, a WSDA board member and one of the five dentists who filed the complaint, in a statement. “Because Delta’s executive and board leadership is now using the powers it claims it has as a result of the 2013 restructuring as one basis for rejecting many of the bylaws amendments proposed and overwhelmingly adopted by its members. When obtaining approval to restructure the company, Delta did not disclose a series of significant details to state authorities.”
“We are committed to seeing the organization’s governance structure, operating practices and communications change to support patient care,” said Dr. Bernard Larson, immediate past president of WSDA and one of the five dentists who filed the complaint, in a statement. “It’s time to begin restoring a level of trust and mutual cooperation between Washington’s dentists, patients and the state’s largest dental benefits provider.”
The five dentists filing the complaint are Drs. Pauley, Larson, Irwin, Christopher Delecki and Nathan Russell.
The September special meeting was called after a petition with about 650 signatures of Washington dentists who are Delta Dental members was submitted to Delta in June. The petitions were submitted pursuant to a special meeting provision in the Delta Dental of Washington's bylaws. Upon receipt of the petition, with signatures of at least 10 percent of its member dentists, Delta is required to schedule the requested meetings and announce the date of those meetings within 30 days.
Dr. Craig E. Neal, oral surgeon and president of the Seattle/King County Dental Society, wrote an opinion piece published by The Seattle Times in November titled “You and Your Dentist May Have a Bone to Pick With Delta Dental.” Dr. Neal said, “Delta’s response [to the bylaw amendments] continues a well-established pattern of resisting any accountability to member dentists, the patients they serve or state regulators. So, the battle for accountability is likely to shift to the courtroom. Dollars that should be going to patient care or promoting oral health instead will be spent on lawyers. This isn’t just a spat between the state’s largest dental-benefits provider and its member dentists. As patients, the public has a significant stake in the outcome. If the dentists’ reforms are upheld, patients will get more money going to their care, more transparency about how their premium dollars are spent and access to a legitimate, independent forum for resolving disputes with their insurance company.”
Delta Dental of Washington sent a statement to the ADA News in response to inquiries: “We are aware that the Washington State Dental Association leadership has filed a complaint with the Office of the Insurance Commissioner regarding Delta Dental’s corporate structure. Our corporate structure changes were made in compliance with applicable law and OIC regulations; the heavily regulated nature of our industry also requires us to regularly file statements with the OIC. We feel confident in our continued ability to pursue our vision: that all people can enjoy good oral and overall health with no one left behind. And we pursue this vision, under our current corporate structure, in collaboration with the over 4,000 Delta Dental of Washington member dentists throughout the state.”
For more information on the bylaws amendment, visit www.wsda.org/delta.
The ADA’s new dental benefits landing page is www.ada.org/dentalbenefits.