Wednesday, October 21, 2009
By Dan Schulte, J.D.
MDA Legal Counsel
From the August 2009 issue of the Journal
Question: I would like to create my own dental plan. Patients would pay a fixed fee annually and receive certain services on an as-needed basis. Is this legal? I would also like to know whether I can waive a patient’s liability for a co-payment or deductible.
Answer: Judging by the number of questions being received on these topics, many dentists are contemplating establishing their own practice dental plan and/or assisting patients by waiving their right to receive a co-payment or deductible.
The operation of a practice dental plan is not illegal. You should take great care to fully and accurately describe the terms of the dental plan in your advertisements to the public and in your plan description or contract to be signed by patients enrolling in your plan. The services covered by the plan must be specifically defined.
I would not simply state that “preventative services” are covered. Specifically describe the services that will be provided (i.e., cleaning, exam, etc.). Specifically state whether X-rays are included or subject to an additional fee. Also, clearly state whether any portion of the amount paid is refundable and, if so, under what circumstances a refund will be made.
You also need to review all your contracts with dental insurers and plan administrators. These contracts may either prohibit you from offering your own dental plan or the offering of such a dental plan may effect the fees you are permitted to charge patients enrolled in the insurer’s/administrator’s plan.
The DeltaPremier Fee-for-Service Participation Agreement is an example. That contract states that Delta Dental’s payment to a participating dentist is the lesser of: (1) the submitted fee; (2) the lowest fee regularly charged, offered or received; or (3) the maximum fee Delta Dental approves. Your discounted fees for the services offered pursuant to your dental plan may be deemed by Delta Dental as the lowest fee you regularly charge, offer or receive for the services provided by the dental plan. If so, Delta Dental may refuse to pay a higher fee than your plan’s fee when you provide services to its enrollees. If you are not a party to a DeltaPremier Fee-for-Service Participation Agreement this would not apply to you.
Your contracts with insurers/administrators must also be reviewed when waiving co-payment and deductible obligations. Most such contracts (including the DeltaPremier Fee-for-Service Participation Agreement) require you to collect deductibles and co-payments.
An across-the-board policy of waiving co-payments and deductibles would also be deemed a violation of Michigan’s Healthcare False Claim Act (the “Act”) unless you disclose the waiver on the claim forms. Under the Act, waiving the co-payment/deductible obligation without disclosure would be deemed a misrepresentation to an insurer/administrator since it will not know that less than the full fee noted on the claim form is actually being charged. The disclosure of the waiver may result in the insurer/administrator reducing your fee by the amount waived.
If the patient is a Medicare or Medicaid recipient, waiving the co-payment or deductible obligation may be illegal for an additional reason. The U.S. Department of Health and Human Services deems the waiver to be a payment by the dentist to the patient for a referral of the patient’s business. The only exception that has been made by HHS is when the waiver is based on the patient’s financial hardship.
The best practice is (after assuring yourself there are no contractual prohibitions on waiving the co-payment and deductible obligation) to grant a waiver based only on financial need and fully disclose that you have done so on any claim for payment submitted to an insurer/administrator.