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Dispute between California Dental Association, Delta Dental of California settled for $65 million

Agreement ends nearly five years of litigation

May 21, 2018

By David Burger

Dr. Lee
Dr. Lee
San Francisco — The San Francisco Superior Court granted final approval May 2 of a $65 million class action settlement between the California Dental Association and Delta Dental of California, resolving lengthy litigation brought against the insurer regarding CDA's claims that Delta breached its contractual commitments with thousands of dentists in the state.

The $65 million is nearly twice the sum the parties agreed to initially.

"The ADA is pleased that the California Dental Association has reached a settlement with Delta Dental with terms favorable to California dentists," said Dr. Joseph P. Crowley, ADA president. "We support CDA's efforts on behalf of its members to challenge unilateral revisions of Delta's provider contracts, making sure that providers are compensated fairly for their treatments. The settlement will ultimately help ensure that patients receive the continued respect and care they have experienced."

The CDA filed the legal action in August 2013 in response to Delta Dental's plans to reduce reimbursement rates for their Premier plan by 8 to 12 percent. The CDA claimed that Delta Dental's attempt to amend the participating dentist agreement was a breach of contract and that Delta Dental had not adequately disclosed its plan to reduce reimbursement rates. During the course of litigation, the CDA also discovered that Delta Dental had been imposing additional limitations on provider annual fee filings for participation in the Premier network that the participating dentist agreements did not allow.

Delta Dental denied the CDA's allegations and claims, and maintained that the agreements expressly permitted the proposed amendments and that they were made in accordance with California's Knox-Keene Act governing health care service plans. The Knox-Keene Act is a law that regulates and licenses managed care plans.

"CDA brought this case challenging Delta Dental's conduct because our members have a right to fair contracting provisions and it would have been virtually impossible for them to challenge Delta Dental on their own," said Dr. Natasha Lee, CDA president, in a Delta Dental news release.

"This agreement is an example of CDA's willingness to fight for its members and we are pleased to see the litigation resolved in a positive way," Dr. Lee said.

In a CDA news release, Dr. Lee said, "We told our members we would go to the mat for them and that's exactly what we did."

Delta Dental President and CEO Tony Barth responded in the Delta Dental news release, "Although Delta Dental has at all times adhered to its contracts with Premier dentists and complied with both the letter and spirit of California's Knox-Keene Act, we are satisfied to put this litigation behind us and remain committed to all our participating dentists."

The following summarizes key outcomes of the settlement, according to the Delta Dental news release:

  • Delta Dental  must  pay up to $65,029,299 to Premier providers who filed annual fee adjustments with Delta Dental that were below the maximum amounts allowed but that were nonetheless reduced by Delta Dental based on its own self-determined "inflation adjustment percentage."
  • More than 14,000 dentists will receive amounts ranging from $500 to many thousands of dollars, with the average allotment calculated at $4,480.
  • Delta Dental must provide 120 days' written notice of significant participating dentist agreement changes to all contracted providers, instead of the 45 days' notice currently required by California law.
  • Delta Dental must provide each Premier provider affected by any attempt to reduce reimbursement fee maximum levels with an individualized analysis of the potential financial impact to their practices.
  • Delta Dental will provide the California Dental Association 12 days' advance notice of changes to participating dentist agreements to prepare for questions from its members.
  • None of this settlement amount goes toward attorney fees. In addition to the settlement amount, Delta Dental will pay the California Dental Association $2.35 million as reimbursement for a portion of the attorney's fees that it expended in pursuing the case.

The $65 million is nearly double the amount the parties agreed to in the initial settlement. According to a news release from the California Dental Association, the revised figure was required after an error in the financial calculations conducted by Delta Dental was discovered during the validation the CDA required of the prior settlement amount.

Delta Dental Premier, Delta Dental's largest dentist network, is a traditional fee-for-service plan in which Delta Dental Premier dentists agree to abide by Delta Dental's determination of fees.

Details on the terms of the settlement agreement and related documents are available at DeltaDentalofCaliforniaSettlement.com.

CDA members with questions about the settlement should contact the CDA at 1-800-232-7645.