CDA’s legal action against Delta Dental took a step forward with a decision by the American Arbitration Association to select three arbitrators to hear and decide the case. The selection of an arbitration panel meant the case was able to move forward with a preliminary conference scheduled Feb. 25.
The case stems from Delta’s Aug. 1, 2013, notice to providers that it intended to change key provisions of their participating dentist agreements, including the deletion of a key promise that Delta made to participating dentists in 2010 that the maximum fee for dental services would not be reduced unless a reduction were justified by filed fees and other specific criteria. There are indications that the deletion of this key provision is a first step in Delta’s reduction of the maximum fee by an average of 8 to 12 percent. Thus far, Delta has refused to provide CDA with information on its actual intent with respect to fee reductions, other than to claim that it seeks total freedom to do whatever it wants.
There are two initial questions that the arbitration panel is expected to reach at some time. First, CDA filed a motion to “preserve the status quo” with respect to the effective date of Delta’s proposed amendments until their legality is decided. CDA felt it was important to raise this issue rather than simply allow the amendments to become effective as of Oct. 4, 2013, when they were otherwise scheduled to become effective. Delta has opposed this motion.
Second, Delta has filed briefs arguing that CDA should not be a party in the arbitration process because CDA itself is not a participating dentist and has not entered into an agreement to arbitrate with Delta. CDA has responded that it is representing its members in this arbitration, who do have agreements requiring arbitration of a dispute such as this. CDA has pointed to California statutory law that permits an organization to represent its members. In further response, CDA sent an email questionnaire to its members, for which we have current and valid email addresses, asking if they wanted CDA to act on their behalf to assert their rights under the Participating Dentist Agreement with Delta in the arbitration. The response has been overwhelmingly positive — more than 3,000 CDA members have responded and specifically authorized CDA to protect their rights in the arbitration process. The arbitrators will decide on this issue relatively soon. Regardless of that decision, the arbitration will proceed, since there are now six individual claimants whose right to arbitrate is not disputed by Delta.
CDA will continue to keep members informed about the legal action against Delta. Due to a likely protective order, some of the information presented during the actual arbitration proceedings will likely remain confidential and will not be released publicly. We will, however, keep you informed about those aspects of the arbitration that are public and not subject to the protective order.
Updated information can be found through the Update
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