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Ensuring Dental Plan Transparency

The Massachusetts Dental Society seeks to ensure that dental benefits companies are transparent and accountable. An Act Relative to Transparency of Dental Benefits Corporations protect consumers by bringing transparency and accountability to dental plans in the Commonwealth.

The Issue

Massachusetts fails to hold dental benefits companies to the same standards as general health insurers in three major ways that are costly and unfair to patients: 

  1. The Division of Insurance (DOI) has no power to regulate dental benefit companies' reimbursement fees, regardless of the impact on patients and providers. 
  2. While all other health benefits providers must by law spend 80% of premium dollars on patient care, dental benefits companies are free to raise rates without directing any of the increases to actual patient spending. 
  3. Preferred provider organizations (PPOs) are allowed to "rent" their in-network dentists to other PPOs without first providing any notice to the dentists.

Division of Insurance Oversight

The Division of Insurance (DOI) has little to no oversight in terms of dental benefits companies setting fees. Most carriers can, unless otherwise stipulated in provider contracts, increase or decrease reimbursement fees whenever they choose to do so. The carriers do not need to take into consideration the impact on patients and providers.

To protect both patients and providers from frequent rate changes, An Act Relative to Transparency of Dental Benefits Corporations would:

  • Give the DOI oversight of all dental benefits plan premiums and fee reimbursements. All rate changes would be subject to the review and approval of the DOI.
  • Ensure all carriers are held to a similar standard. This process already takes place for one carrier in Massachusetts.

Medical Loss Ratio

Dental benefits companies, unlike health insurance companies, are not held to ratio standards in which they must spend 80% of premium dollars on patient care. Due to the lack of ratio standard, dental benefits companies are free to raise premiums while spending less on care.

To address this issue, An Act Relative to Transparency of Dental Benefits Corporations would:

  • Require dental benefits companies to submit medical loss ratio data to the Division of Insurance (DOI).
  • Require carriers to file annual financial reports with the DOI, including detailing self-funded lines of business.

Leased Networks

In dentistry, network leasing or sharing is a mechanism in which a preferred provider organization (PPO) rents its dental network to other PPOs, such that the first PPO’s in-network dentists must unknowingly accept patients and terms as an “in-network” provider with other PPOs—even though they have never directly engaged in negotiations or directly agreed to the new carrier’s terms. These participating provider contracts contain a provision, which is not negotiable, that implies consent to any terms the carrier imposes, including the leasing of its provider network.

Dentists may be participating with numerous PPOs without knowing it, often unaware until they submit a claim and receive an explanation of benefits indicating additional terms and restrictions. This network leasing raises issues of transparency and lack of choice for the patient, who is unaware of their out-of-pocket financial obligations.

To address this issue, An Act Relative to Transparency of Dental Benefits Corporations would:

  • Limit carriers from granting third-party access to a provider network contract or a provider’s services and contractual discounts pursuant to a provider contract
  • Prohibit granting access to dentist discounts under a provider network contract in order to prevent the improper selling or leasing of these contractual discounts, under what is commonly known as a “silent PPO” arrangement. Carriers would need to receive written consent from a provider prior to the carrier entering into a leased network relationship with another carrier.