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New Louisiana law deals blow to downcoding

State also bans coverage denial for pre-existing conditions

June 24, 2020

By Jennifer Garvin

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Louisiana Gov. John Bel Edwards signed a bill June 11 prohibiting downcoding by third-party payers unless certain criteria are met.

The new law, which the ADA believes is the first of its kind, prohibits “systematic downcoding with the intent to deny reimbursement otherwise due to dentists” and requires third-party payers to disclose downcoding policies that are routinely applied.

It also says that state-regulated plans must specify in their explanation of benefit notices sent to patients the reason for any payment against a different procedure code than what was submitted by the dentist and identify policy provisions that permit the change. The explanation of benefit notices may not state or imply dentists have acted inappropriately, if a different procedure code is used for adjudication, unless there is clear evidence to the contrary.

Lastly, Louisiana Act 187 — as the new law is officially referred — specifically prohibits third-party payers from downcoding a fixed bridge to a removable bridge.

The ADA defines downcoding as a third-party payer claim adjudication process that uses a procedure code that is different from the one reported on the claim so that the reimbursement amount is less than would be allowed for the submitted code.

The bill was one of two dental bills signed by Gov. Edwards in June. He also signed a bill banning third-party payers from denying coverage for pre-existing conditions.

Both laws go into effect Aug. 1.

The Louisiana Dental Association advocated for both bills during a compressed 28-day legislative session. The Louisiana State Legislature originally planned to convene for 85 days in 2020 before shutting down March 16 in response to the COVID-19 pandemic. The legislature resumed on May 4.

“An important aspect of being a member of organized dentistry is that when times are tough, we band together for the greater good of the profession,” said Annette Droddy, executive director of the Louisiana Dental Association. “When we found out there was an opportunity to move forward with the two pieces of insurance legislation, our leadership decided that it was in the best interest of our members to do our best to see how far we could take these bills, even in a COVID-shortened session.

“We reached out to contact dentists, alerted our member advocacy network through Engage, and worked with ADA staff through the State Public Affairs program. It is because of our combined efforts through the ADA tripartite that we were able to pass these two important pieces of insurance legislation,” she said.

ADA President Dr. Chad Gehani lauded Louisiana Dental Association’s recent legislative victories.

“Their success is our success. Downcoding and pre-existing conditions are two examples of third-party payer practices that interfere in the doctor-patient relationship,” said Dr. Gehani. “When laws like these pass, dentists and patients both benefit because patients receive proper coverage to which they are entitled. Other state dental associations can use this legislation as models for their own proposals to protect the public. The ADA and the State Public Affairs program stand ready to assist them in these efforts.”

A second Louisiana measure, Act 256, addresses a pre-existing condition issue known as the “missing tooth clause.” Carriers providing dental coverage are now prohibited from denying “covered dental services to treat conditions existing prior to the date the coverage begins.” The statute permits third-party payers to “impose up to a 12-month waiting period for covered services,” but they can no longer prohibit coverage of the services because of previous conditions like a missing tooth.

The ADA estimates that both laws will apply to about 52% of patients as the laws apply to state-regulated plans whereas the other 48% of patients have self-funded plans which are generally exempt from state insurance statutes.

For more information on downcoding and other dental benefit issues, visit the ADA Center for Professional Success.