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09/18/2013

CDA seeks to derail Delta rate cut process


The lengthy arbitration process between CDA and Delta Dental has commenced, with the parties entering into discussions about the selection of an arbitrator. Delta is expected to file a formal response to the demand for arbitration on or before Oct. 1. The legal action — filed by CDA and some individual members — pursues binding arbitration that requires Delta to honor its contractual obligations contained in the Participating Dentist Agreement between Delta and its participating providers.

In an Aug. 1 notice, Delta Dental informed dentists for the first time of changes to two significant provisions of providers’ agreements. The first change that Delta seeks to make is to eliminate the current provisions in the contract that prohibit Delta from reducing approved fees absent specific conditions. The second change that Delta seeks is to restrict dentists’ rights to challenge such actions by arbitration.

“CDA will urge the arbitrator to preserve the status quo during litigation, so Delta cannot implement these unilateral changes during the arbitration process,” said CDA President Lindsey Robinson, DDS. “But members need to understand that until an arbitrator makes that call, Delta may still carry out these contract changes and issue notices of the proposed Premier Plan reimbursement cuts that we’ve been anticipating since the beginning of the year.”

Documents filed with state regulators confirm Delta’s intent to reduce fees. In response to a CDA public records request, the Department of Managed Health Care released documents associated with Delta’s notification to the department of its intention to revise its contract with providers and how it sets fees for its Premier product. In the documents, Delta appeared to agree that the current Delta participating dentist agreements do not permit it to unilaterally reduce approved fees, stating that current contract language “limits Delta Dental’s ability to reduce the maximum amount applied to dentists’ Contracted Fees.”  Delta stated that the amendment it seeks would permit it to reduce allowed fees as it sees fit after 45 business days’ written notice to dentists. Delta did not commit to any particular fee schedule in its filing, saying that would come later. CDA regards this as a fundamental change to a very significant provision in the Delta participating dentist agreement upon which dentists have relied for many years.

CDA first notified members in February of Delta’s plans to reduce Premier Plan reimbursement rates. Since then, Delta has publicly indicated that it would adhere to the provisions of a CDA-sponsored law that requires insurance companies to give dental plan providers 45 business days’ notice of any material changes to contracts and payment policies. Based on Delta’s notification, changes to provider contracts could go into effect Oct. 4. Shortly after that, Delta could then provide notices of fee reductions — estimated to be an average of 8 to 12 percent — which might then go into effect 45 business days after being sent. CDA’s legal action challenges Delta’s right to change its contracts unilaterally and impose these fee reductions.

CDA will continue to provide members with updated information through the Update, e-newsletter and cda.org.