When entering into an insurance plan participation agreement (“Agreement”), each dentist should have extensive knowledge and understanding of each term of these Agreements, as they will have a significant effect on a dental practice.
The following list is not exhaustive of all terms within such Agreements and is not a substitute for legal advice. You are encouraged to retain the services of an attorney to review any contract before you sign it.
The insurance company (“Company”) and the individual dentist or the dentist’s corporation will be parties to the contract. A dentist who is incorporated should not enter into an Agreement as an individual.
While an Agreement will include a main portion, it could also include appendices, exhibits, schedules, manuals, guidelines, rules, regulations, bulletins and other components, all of which will be binding on the dentist upon execution of the main Agreement. Please confirm that you have received for your review all components of the Agreement. A dentist must review and understand all of the ancillary documents related to the Agreement that will affect the dental practice. An Agreement or its ancillary documents can also include a provision that by signing that particular Agreement, the dentist is agreeing to participate in a number of other insurance company plans with the reimbursement rates of those other insurance companies not disclosed in the Agreement. In the event an Agreement includes a clause binding the dentist to other insurance company or plan fees, the dentist should request to receive all terms and fees of the other companies and plans before signing the Agreement.
Does the Agreement include a termination date or does the Agreement continue indefinitely until either the dentist or the Company provide written notice of termination?
If the Agreement does have a termination date, does it include an automatic renewal provision if the dentist or company do not provide written notice of termination?
The Agreement should set forth in writing the entire fee schedule, and the dentist should review, understand and fully agree to the reimbursement rate for each procedure before signing the agreement. If the dentist does not find the fee schedule suitable for their practice, then the dentist should not enter into the Agreement. Sometimes dentists may be able to negotiate insurance plan company reimbursement rates to ones more favorable for the dental practice. The insurance plan may have multiple fee schedules for different types of patients/plan networks, and each fee schedule should be evaluated before entering into the contact.
The assignment provision of an Agreement sets forth whether one or both parties to the Agreement can assign it to another person or entity. Generally, the dentist cannot assign the Agreement to another dentist, but the Company may assign the Agreement to any other party, which could result in the dentist being a party to an Agreement with a Company other than the one in the original Agreement.
The amendment provision sets forth how the parties can modify the terms of the Agreement. Often, the dentist cannot alter the terms of the Agreement without the Company’s written consent, but the Company may modify the Agreement terms without any consent on the part of the dentist. Based on the Agreement terms, a dentist’s only remedy may be to terminate the Agreement if they do not agree with the modification. The Agreement will usually set forth a certain number of required days between written notice of termination and the actual termination of the Agreement during which the dentist must remain a participant in the insurance network.
If a dental plan does not cover certain services, the dentist may still provide those services to a patient, but the Agreement may require that the dentist provide written notice to each patient stating that the plan does not cover the service and the cost for the service. Some plans will establish the maximum fees that may be charged for a procedure even if no insurance benefit is due.
Each Company has specific claim submission procedures and a timeline within which a dental practice must submit claims. If claims submission is in an electronic format, the dental practice is subject to the Health Insurance Portability and Accountability Act of 1996 as well as other California privacy laws.
Plans generally require a patient to participate in the cost for dental treatment. Agreements require that dentists procure copayments, coinsurance and deductibles from patients as part of the dentists’ participation in the Company plan.
Noncompliance can be considered insurance fraud with criminal or financial penalties and is a breach of contract that can carry consequences for the dentist/practice.
A Company generally retains the right to have the Company’s hired dental professionals review procedures submitted for reimbursement in order to approve or deny benefits. The Agreement should set forth an appeal process by which a dentist may contest the Company’s review of treatment if the Company denies reimbursement. The dentist must also ensure that their treatment of patients will not be affected by the parameters of the Company’s review of treatment because the dentist is always responsible for each patient’s treatment.
An Agreement may require that a dentist participating in the Company’s network provide written notice to the Company if any other dentists, whether in that Company’s network or not within that Company’s network, join the dental practice of a dentist to form a group practice and may require a separate contract and credentialing of new dentists. Payments may be disallowed if treatment is performed by a nonapproved dentist in a group practice. Addition of a new dentist may affect the fee schedule for that dentist or the entire group.
An Agreement will require that the dentist maintain errors and omissions (malpractice) insurance and may dictate the terms of that policy. If the Agreement sets forth specific requirements related to malpractice insurance, a dentist who intends to participate in the network must confirm that their malpractice policy meets those requirements.
An Agreement may hold the reimbursement rates and other information it discloses to the dentist as proprietary, which the dentist cannot disclose to third parties.
Dentists should obtain legal counsel for any agreement they may sign, but in particular if an agreement contains an indemnification or hold-harmless clause whereby the other party may be shifting the burden of liability and obligations to the dentist. Although the dentist is responsible for their own negligence, errors or omissions, a hold-harmless clause may make the dentist responsible for another party’s negligence and the malpractice insurance carrier for the dentist may not agree to cover such third-party negligence that the dentist has assumed under the Agreement.
Because dental insurance companies typically are national entities that provide plans throughout the country, the Agreement will generally have an amendment that provides provisions specific to the state of California. The dentist will be bound to these state-specific provisions as part of the Agreement.
The termination provision in an Agreement delineates the manner by which the dentist and Company can terminate the Agreement. It is important for the dentist to understand their termination rights, including without limitation whether the dentist can terminate the Agreement for any reason or whether there must exist cause for the termination. The Agreement may also include a mandatory number of days by which the dentist must provide written notice to terminate the Agreement.
The Agreement should include a dispute resolution provision that entails a fair and reasonable manner by which the Company and the dentist will resolve any potential disputes under the Agreement. An Agreement may bind the dentist to arbitration, which is enforceable in California. If the dentist agrees to an arbitration clause, they will forfeit their right to have a court adjudicate legal disputes between the dentist and the Company. An arbitrator’s decision is binding on both parties and not subject to appeal.
A Company will generally retain rights in the Agreement to review the books and records of the dentist’s practice. The clause should include whether the Company must provide written notice to the dentist and the extent to which the Company will have access to books and records. Patient records are subject to HIPAA and California privacy laws. If a patient is not a subscriber to a particular insurance company’s plans, the Company cannot view the records of such patient.
The Agreement may allow the Company to audit the charts and records, and it may recoup fees paid by the Company based on improper information provided by the dentist, noncovered procedures, inadequate documentation or services provided by a nonapproved provider.
If an Agreement includes a liquidated damages provision, it likely subjects the dentist to the payment of damages to the Company in the event the dentist breaches the terms of the Agreement. Liquidated damages can be monetarily significant, and the dentist should retain legal counsel to provide advice on the extent of a liquidated damages provision.
An integration clause limits the scope of all agreements between the dentist and the Company to the terms of the written Agreement or any ancillary documents named in the Agreement. As a result, any prior or simultaneous oral or written communications between the dentist and the Company are not legally binding unless they are in the written Agreement or ancillary documents named in the Agreement.
Both the California Dental Association (CDA) and the American Dental Association (ADA) have resources available for insurance plan contract evaluation (see CDA Dental Benefit Plans and Practice Support; see ADA Contract Analysis Service and Model Contract for Third-Party Dental Service Agreements). A dentist should also retain the services of a qualified attorney to review the legal terms of any insurance plan contract. This Appendix D is not a substitute for legal counsel.