Providers have two levels for appealing payment disputes with health plans. The first level is with the plan itself. Then, if a dispute is not resolved with the plan, the provider may appeal to the appropriate regulatory agency.

Plan Dispute

California Health and Safety Code (Sec. 1371.38), California Insurance Code (Sec. 10123.137) and California Code of Regulations (Sec. 1300.71.38 (d) and (e) require payers to have in place a process for resolving provider payment disputes with payers. These statutes and rules enable providers to contest disputes about reimbursement decisions.

According to regulations adopted by the Department of Managed Health Care, all health plans, including specialty plans, are required to have in place a provider dispute resolution mechanism that is “fast, fair and cost-effective.”

The dispute process should include the following elements:

• Plans are required to notify providers of their dispute resolution processes.
• A provider dispute means a written notice to the plan “challenging, appealing or asking reconsideration” of a claim that has been denied, adjusted or contested or disputing a request from the plan for reimbursement of a reputed overpayment.
• Whenever a plan contests, adjusts or denies a claim, it shall inform the provider of the availability of the provider dispute resolution mechanism and the procedures for obtaining forms and instructions for filing a challenge.
• Providers may submit a challenge to a plan’s decision within 365 days of the decision or action.
• Plans must acknowledge receipt of a provider’s dispute within two working days of receiving a challenge that is submitted electronically and within 15 working days if submitted by mail.
• Determinations of a provider’s dispute must be made within 45 working days after receipt of the provider dispute.
• Plans must designate a principal officer who will be responsible for maintaining its dispute resolution mechanism.
• The provider dispute shall be handled and resolved by the plan without charge to the provider. (Any legal counsel retained by the provider is excluded from this requirement.)
• Plans can determine the form of the dispute resolution mechanism they adopt, but arbitration shall not be that mechanism. The regulations require a mechanism that is a lower or intermediate process; arbitration may be an option that a provider chooses to use to resolve a payment dispute, but it cannot be the primary or exclusive mechanism the plan uses for resolving disputes with providers. 

If the plan’s resolution is not in your favor and you wish to continue the dispute resolution process, your next option is to file with the regulating agency of the plan.

Taking it to the next level with a complaint to the regulator

Plan dispute resolution mechanisms that are not “fast, fair and cost-effective,” or that in any way violate the required notice to providers of the option to file a challenge or that violate the time frames within which a challenge must be responded to, may be reported to the Department of Managed Health Care as a potential violation of the regulations. A plan’s "unjust" or "unfair payment pattern" should also be communicated to the Department of Managed Health Care for possible investigation and enforcement action. You can file a complaint online at Department of Managed Health Care.

ERISA (self-funded groups)

Self-funded dental benefit plans are not required to comply with the above-mentioned dispute process and time frames, as they are regulated by the Federal Employees Retirement Income Security Act of 1974 (ERISA) rather than the laws of California. ERISA plans also include benefit plans offered by labor unions, multistate employers, divisions of government such as cities and counties, and school districts. However, most self-funded ERISA-regulated health plans are administered by major dental plans.

Consequently, the first step in appealing a payment dispute with a self-funded dental benefits plan is to file the dispute with the administrator of the plan using that plan's dispute resolution process.

A subsequent avenue to resolve payment disputes with self-funded plans is to discuss the dispute with the patient, the patient’s employer or group and the Office of Participant Assistance with the U.S. Department of Labor’s Employee Benefits Security Administration.

Some plans do not provide specific forms, but many provide their process of appeal. If the plan does not have a specific form, you may choose to use the sample dispute form at the end of this resource.

Complaints or disputes over plans’ payment decisions may be communicated to the California Dental Association Practice Support team. A plan’s pattern of possible unfair payment or business practices is a concern for CDA and is commonly identified from member complaints. Depending on the complaint or dispute, CDA may follow up with the appropriate state regulatory agency. Members who wish to contact CDA about a payment dispute with a dental plan should be prepared to share supporting documentation (e.g., copies of claims, remittances, correspondence with the plan, responses from the plan and the like) regarding the payment dispute. Such documentation is necessary for Practice Support staff to thoroughly address members’ issues or, when necessary, to bring these cases to either the State Department of Managed Health Care or the Department of Insurance.