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Legal Services

By Daniel J. Schulte
MDA Legal Counsel
Published in the August 2006 issue of the Journal

Question: I, like most dentists, have participation agreements with a number of dental plans. According to these agreements I am reimbursed for my services in amounts listed on a fee schedule, and I have agreed to accept this fee as payment in full. One of these dental plans has reduced the fee amounts without my consent. This will result in a substantial loss of income. How can one party to a contract change it without the consent of the other party? Isn’t this a breach of contract? If not, what can I do?

Answer: Generally, dental plans retain the option to modify or amend the terms of participation agreements. This right typically extends to fee schedules and other reimbursement mechanisms. Whether there is a breach of contract will depend on whether your agreement authorizes such unilateral changes. In making this determination, the entire participation agreement must be examined. This includes all documents incorporated in the participation agreement (e.g., policy manuals, guides and other dental plan documents) which may be much more extensive and provide for the unilateral right of the dental plan to make changes.

Whether a dentist participates in a dental plan is voluntary on the part of the dentist. All participation agreements authorize dentists to individually terminate the agreement by providing notice a specified number of days prior to the termination date. Such termination or de-participation from the dental plan is the primary option available to any dentist who is dissatisfied with the dental plan or participation agreement. This decision must be made by each individual dentist.

The agreement between two or more independent dentists or dental practices to either not participate in a dental plan or to terminate participation would be deemed to be joint action in violation of the antitrust laws. Such an agreement is deemed to be a per se unreasonable restraint of trade. Since the per se rule applies, a court would presume that an unreasonable restraint of trade occurred and the plaintiff would only have to prove the existence of the agreement, not that the agreement actually restrained competition in an unreasonable way. It does not matter that the dentists either did not understand or know about the antitrust laws or did not intend to violate the law. The understanding does not need to be a written or formal agreement. It can be a tacit understanding. Informal conversations with other dentists about a dental plan participation agreement which results in de-participation by the dentists could be the basis for an illegal agreement under the antitrust laws.

Dentists often seek action by the MDA against particular dental plans. But any professional organization representing independent practitioners is constrained by the antitrust laws just as the members themselves are. Therefore, the MDA is precluded from entering into or attempting to enter into any agreement or understanding, either express or implied, with any member to attempt to affect the terms or conditions contained in participation agreements or the termination of participation agreements. The antitrust laws further preclude MDA from making any express or implied threats or acts for the purpose of inducing a dental plan to accept a position taken by MDA or any of its members concerning reimbursement or the terms and conditions of any participation agreement. Finally, the MDA must avoid advocating, suggesting, urging, advising, inducing or recommending that MDA members departicipate with any dental plan.

Notwithstanding these antitrust barriers, MDA still retains its First Amendment right to provide information or express views, on its own behalf or on behalf of its members, to dental plans concerning any issue, including participation agreement terms and conditions. The MDA also has the right and duty to inform its members on issues affecting the practice of dentistry, including changes in dental plan participation agreements, so that members may make their own individual, informed decisions.

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