A dental office recently contacted CDA Practice Support with the following question:
I do not have a direct contract in the network with a certain benefit plan, but this non-contractual plan processed a claim saying that it was entitled to a discount on the costs incurred from another benefit plan social networks with which I have a contract. Can the non-contractual plan legally do this?
The short answer is, yes, it is legal. California law allows preferred supplier organizations to “sell” or “lease” access to both their contracted supplier networks and at their discounted rates.
But the Practice Support analyst also offered the more comprehensive explanation, as follows.
Legislation sponsored by the ADC (Assembly Bill 954) which came into effect on January 1, 2020. This law requires dental plans to be more transparent about the rental of their dental systems and includes the following provisions for contracts entered into from January 1, 2020:
- Requires dental plans to name parties who will have access to a provider contract.
- Provides the dentist with the option of opting out of having their existing provider contract leased to other entities without affecting their original plan contract.
- Requires dental plans to maintain an up-to-date list of websites of all third parties that have access to a provider network contract and require plans to update this information at least once every 90 days.
- Requires that dental plan agreements clearly identify in the specified language and policy the contractual clause that allows network leasing.
- Requires dental plans to identify the source of the discount on all written or electronic payments and the name of the plan with which the dentist has a direct contract.
- Any right of a third party to a reduced supplier price ceases on the date of termination of the direct supplier contract.
- Requires that the plan the dentist has a direct contract with provide a copy of the provider network contract within 30 days of a provider’s request.
Refuse to be rented to other plans: next steps
After the CDA analyst reviewed the provisions of the law with the office, the office indicated that it did not wish to be hired to other plans. Upon hearing this information, the analyst advised the office to inform the plan in writing that the office wished not to be leased to other plans and to include the following information in the letter:
- Tax identification number of the practice and / or dentist
- Practice address
- Office contact name, phone number and email address
- Declaration informing the plan of the wish not to be rented or sold to another plan
- Signature of billing dentist
Remember: Medicare or Medicaid dental plan agreements are exempt from legal requirements.
CDA Practice Support is there to help answer questions about dental benefits and provide individual assistance to members. Members can simply submit questions online using the dental benefit submission form accessible through their cda.org account.
Practice Support will analyze the member’s issue, assess it for possible resolution, and clearly communicate next steps. To get started, visit My Account, click on the Submit Dental Benefit Issues link, and follow the instructions.