Delta responds to CDA arbitration demand

On Oct. 1, Delta Dental of California issued a formal Answer to the Demand for Arbitration. Delta asserts that it has the right to amend Participating Dentist Agreements based on language in the contracts and its notification to the Department of Managed Health Care indicating that it intends to revise the provider agreements.

Delta Dental informed dentists on Aug. 1 of changes to two significant provisions of provider agreements — the elimination of the current contract provisions that prohibit Delta from reducing approved fees absent specific conditions and the restriction of dentists’ rights to challenge such actions by arbitration. On Aug. 14, CDA and two individual members filed a Demand for Arbitration challenging these amendments and seeking to require Delta to honor its contractual commitments contained in the Participating Dentist Agreements.

Delta took the position that the amendments involved in the case would become effective 45 days after its announcement on Oct. 4. A CDA-sponsored law requires insurance companies to give providers 45 business days’ notice of any material changes to contracts and payment policies. As a result, on Oct. 2, CDA filed a motion to preserve the status quo, which would prohibit Delta from implementing its proposed contract amendments while arbitration is pending. That motion is now pending and will be briefed and argued in the coming weeks after the selection process for an arbitrator is complete.

In February, CDA learned and informed members of Delta’s plans to reduce Premier Plan provider reimbursement rates. Although Delta declined to confirm its plans, we have learned that Delta began the process of filing amendments now being challenged in March. The changes to the contract provisions are believed to be the first step in instituting the fee reductions.

CDA will keep members informed about the legal action against Delta. However, much of the information presented during the actual arbitration proceedings likely will be covered by a protective order and, therefore, cannot be released publicly.