Infuriated by insurers who cap fees for procedures they don't cover, dentists around the U.S. are asking state legislatures to outlaw the practice. Now the New Jersey Dental Association (NJDA) is taking a different approach: suing the insurance companies.
In a lawsuit filed March 26 in the Superior Court of New Jersey, the NJDA alleges that two insurance companies in the state -- MetLife and Aetna -- broke state law when they demanded that dental practitioners agree to limit fees on procedures they don't cover as a condition for participating in their networks.
In a separate lawsuit, the association is suing Horizon Blue Cross Blue Shield of New Jersey for inserting an antiassignment clause in its contracts -- effectively allowing the company to reimburse patients directly even when patients say they want the payment to go to the practitioner.
Growing trend
The number of states with laws against fee capping has swelled from one to at least eight in less than a year, according to the Academy of General Dentistry (AGD). Kansas, Mississippi, Nebraska, Virginia, Washington, Oregon, South Dakota, and Rhode Island have all passed such laws, with similar bills on the desks of governors in Maryland, Arizona, and Iowa, the AGD said.
But the lobbying can be arduous. In Virginia, for example, opponents launched a campaign accusing the Virginia Dental Association of trying to take money out of patients' pockets with the law.
— Arthur Meisel, executive director,
New Jersey Dental Association
A fee-capping lawsuit might avoid that kind of brouhaha, said Arthur Meisel, the NJDA's executive director. "It seemed to provide a quicker alternative." That's easy for him to say. While the executive directors of about 10 other state dental associations are attorneys, Meisel is the only one he knows of who is actively practicing law.
Still, he thinks the same avenue may be open to other associations willing to hire an attorney for a fee-capping lawsuit. "My guess is that there are comparable laws in other states," he said.
Meisel thinks the legal proceedings could go fairly quickly because Aetna and MetLife won't dispute the fundamental fact in the case: that the insurers are insisting dentists cap fees for procedures the insurers don't cover. So there probably won't be any lengthy fact-finding process -- none of the subpoenas and depositions that make some lawsuits drag on for years. He says the court will be asked to decide a simple question: Is this legal under state law?
Dental insurance falls into two categories. Indemnity plans are like homeowners insurance; the insurer agrees to pay the beneficiary if the beneficiary suffers a specified loss.
In service plans, the insurance company agrees to provide a set of dental services to groups of patients, such as all the employees of a business. In these plans, the insurer has two contracts, one with the patient groups and one with the dental practices. Patients benefit because the insurer reimburses them at a higher rate if they see a dentist within the plan. And dental practices benefit because the patients have an incentive to see them.
New Jersey law governs the terms of service plan contracts, and it does not authorize insurance companies to limit procedures it doesn't cover, according to Meisel "They enter into an agreement to provide services under the terms of the contracts with the insured," he said. "That appears to be the parameters of what they can do." In other words, as he reads the law, the insurance companies can't make a contract with dental practices having to do with procedures not in their contracts with the beneficiaries.
Opposing viewpoints
The insurers read the law differently. "We have reviewed the complaint made by the New Jersey Dental Association and have concluded that the allegations are without merit," said Karen Eldred, a MetLife spokesperson, in a written statement. "We are surprised by the allegations in that our dental benefits business practices are appropriate and proper. We intend to vigorously defend the lawsuit and plan to file a motion to dismiss the complaint." She declined to elaborate any further, or to explain why MetLife was trying to cap fees it doesn't cover.
Aetna did not provide any comment by press time.
In a separate lawsuit, the NJDA is asking the same court to strike clauses in contracts by Horizon Blue Cross Blue Shield of New Jersey that allow the company to refuse payment to dental practices, even when patients have authorized the practices to collect payment.
The antiassignment clauses give the insurers a lever with which to pressure dentists to join their networks, Meisel said. Under a recent New Jersey law, medical insurers must honor assignments of benefits. He is arguing that the same law should apply to dental practices as well.
Horizon disagreed. The company "is in the process of finalizing its review of the lawsuit," spokesperson Daniel Emmer said. "However, we feel that the lawsuit is without merit, and we intend to defend ourselves in court."
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