Network leasing bill gains traction, adds protection for dentists, patients

AB 954, authored by Assemblymember Jim Wood, DDS, and sponsored by CDA, unanimously passed the Assembly Health Committee April 3 with favorable amendments to further protect dentists and patients when dental provider agreements are leased by third parties. 

As CDA previously reported, the bill was introduced to make the network leasing process more transparent. Currently, dentists are not always aware that their existing contract with a health care benefit plan is going to be transferred or sold as part of a leased network. Even those dentists who are aware of this arrangement may not know which entities their contract has been sold to or have access to the contractual terms of the entity they are being leased to.

Dentists should be able to easily locate the terms of a new contract, including fee schedules and limitations on services, to communicate these terms to patients. When both the dentist and the patient don’t have accurate information, the treatment planning decisions they make together are negatively affected.

AB 954 already contained a requirement that as of January 2020 any new health care plan contracts must clearly name the third parties that will have access to a provider network contract and give dentists the ability to opt out. The amended bill adds a requirement that when an existing dentist’s contract is leased to a “new” plan, the plan must notify the dentist and allow them to opt out of being leased.

A second amendment adds specific standardized language to be conspicuously placed in the notification requirement so that a dentist or their office staff can recognize this information. CDA and Assemblymember Wood pushed for this amendment because such notices are frequently buried in plan contracts or letters.

Lastly, Dr. Wood secured an amendment requiring that a plan must provide to a dentist a list of plans to which that dentist’s contract will be leased before he or she signs the new contract. Under current law, plans must provide such a list only 30 days after the dentist has requested it in writing.

Third-party access to a provider network contract would only be lawfully granted under AB 954 if all of these criteria are met.

“We continue to work with the California Association of Dental Plans to achieve a final bill that fixes numerous problems with network leasing,” Wood said. “AB 954 with the new amendments helps to further ensure that patients don’t suffer adverse financial impact and that dentists aren’t blindsided by unexpectedly low in-network rates.”

CDA will keep members informed about the bill’s progress through the Legislature. Read more background about the bill in the April Update or on cda.org.

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