Read the fine print!

Congress recently passed legislation to prevent "drive-through deliveries" of newborn infants. Late last year (1995), congressional committees heard mothers describe how newborns had died due to an infection or other problems that would have been detected had the mother remained in the hospital more than 24 or 48 hours after delivery. The mothers complained that the terms of their HMO or PPO insurance coverage limited them to this short hospital stay. Now, insurers cannot dictate the length of a

The author has discovered that many dentists do not know that they have joined an HMO or PPO.

Del Webb, DDS

Congress recently passed legislation to prevent "drive-through deliveries" of newborn infants. Late last year (1995), congressional committees heard mothers describe how newborns had died due to an infection or other problems that would have been detected had the mother remained in the hospital more than 24 or 48 hours after delivery. The mothers complained that the terms of their HMO or PPO insurance coverage limited them to this short hospital stay. Now, insurers cannot dictate the length of a hospital stay for a particular procedure in their contracts.

Hold-Harmless Clause

When the HMOs were called in to question, they responded with two very frightening answers, if you happen to be a "medical provider." Medical provider is the unprofessional term for doctor these days. The first part of their response was that the doctor had all of the liability because it was the doctor`s responsibility to determine when the infant could be released, regardless of the contract coverage and conditions. Just because the patient has no more insurance coverage does not mean the doctor is not liable for the decision to release the child too soon. The doctor is liable; the HMO is not.

The second part of their response included the legal fact that the HMO had a "hold-harmless" clause in the contract. In lay terminology, that means that the contract states if there is an "untoward" result due to the HMO`s policy, the doctor and patient release the HMO from liability. This is a shift in liability, in which the doctor agrees to hold the contracting entity harmless for any liabilities that may occur under the contractual agreement.

You may be a PPO or HMO provider and not even know it. If you have signed an agreement with what you think is an "insurance company" and that agreement puts your name on a provider list, then you are probably a preferred provider. The acronym for a preferred-provider organization would be "PPO," wouldn`t it?

Do you submit your fees and have them approved by an "insurance company?" If you live in California or Michigan, has one of those insurance companies (PPOs) recently told you that they now are paying at the 80th percentile rate, not the 90th? Have you innocently joined a PPO without even knowing it? Does that PPO have a "hold-harmless" clause in the contract? Would you bet your license to practice dentistry on your answer? You would stop what you are doing right now and find out, if you thought you could be successfully sued due to the contract language, wouldn`t you? Under a hold-harmless clause, the doctor risks incurring additional liability for any administrative decision made by the contracting entity that results in an unfavorable outcome for the patient. Do you ever alter your treatment because of reimbursement restrictions in the contract? Who will be held liable in court, you or them? You will be held liable for contract language you probably have never even seen or read!

`Favored Nation` Clause

This clause is used by insurers (carriers, HMO plans, PPOs) to reduce payments to providers who accept discounted payments from another carrier.

Delta Dental could be used as an example of this. Your Delta contract probably says that the fee you charge Delta patients will be the lowest fee charged. Simply, if you agree to any fee schedule, each company will invoke the right to have their patients charged that same, low amount. The fascinating thing is, many companies write both HMO and PPO policies, each having a lower reimbursement than the other. Which one did you agree to accept? Do you need to reimburse any amount you have accepted that exceeds this? Could you be forced to reimburse this amount? What did the state of Arizona have to say about this recently? They outlawed the clause! A worse thought just went through my mind. Some of you think that you must charge all of your patients these same low fees. You do not! What would that error in judgment cost you per year?

Gag Clauses

Dentist-patient communications may be restricted by managed-care contracts with gag clauses. Some managed-care contracts include confidentiality or gag clauses. If the doctor tells a patient about a treatment option beyond the plan`s coverage, this could lead to a dentist being dropped from a plan. If the doctor does not tell the patient about options, the doctor has violated the ADA Principles of Ethics and Code of Profession-al Conduct!

Standard of Care Unchanged

Be aware that contractual restrictions do not alter the standard of care. Doctors must remember that their standard of care-that is, the standard by which they could be judged as being negligent-does not change whether they have signed a contract or not. You have reduced your fees or accepted less by contract in order to be a preferred provider. The quality of care for these patients must be the same as for a fee-for-service patient. The standard of reimbursement is significantly reduced, but the standard of care is the same. Does that sound sensible to you? The New York Times recently reported that there is a national trend showing reduced care when the patient is a participant in a plan that provided reduced reimbursement to the doctor. That is no surprise to anyone, is it? Your state board could remove your license for care below the standard in your state. So, you accept less money, the patient complains and you undergo the headache and heartache of a board review. Stop right now and think that through one more time. Are you sure about the agreements you have entered into? Could it matter? Are you really too busy to find out? How busy will you be after the suspension of your license?

Utilization Review

The open-ended, utilization-review clause binds the doctor to the payer`s utilization-review policies, policies he or she may not even have seen, which may not even have been written yet. Have you signed a contract which allows the "insurance company" to review your files? Can they review any file in your office to compare fees? The Internal Revenue Service has similar powers. OSHA has similar powers. Did you really intend to extend such powers to a company that is causing you to work for a much-reduced fee?

Abandonment

What if the patient doesn`t pay you? What if the HMO or PPO goes under? If they go broke, so do you. Some contracts obligate the doctor to provide services even though the contracting entity ceases to exist. Such contracts have required the doctor to continue to provide services to the patient, usually for a stated term, but those services cannot be reimbursed because the payer no longer has funds for reimbursement. You are stuck! If a contract expires, it does not mean a doctor/patient relationship terminates. A patient cannot be abandoned because the contract doesn`t exist anymore.

The Name Game

Alabama recently tried to rein in the encroachment of managed care. They found that new Alabama laws are pre-empted by ERISA (Employment Retirement Income Security Act-1974), an act that established standards for health-benefit programs, including dental insurance. In addition, the state was told by the courts that the laws do not apply to Blue Cross/Blue Shield of Alabama because it is not an "insurance company."

Delta and Blue Cross/Blue Shield are "special purpose corporations," organized under special legislation to establish a health-care service plan. They are service corporations. These laws do not apply to them. Do they use the word "insurance" to advertise and the words "service corporation" to avoid some laws? Now, who do you think figured that out first? And why are they not insurance companies? Do you see any form of deception here?

Delta Quality Review

A quote from Delta to a patient: "If you have questions about service from a Delta participating dentist, first discuss the matter with your dentist. If you continue to have concerns, call our Quality Review Depart-ment. If appropriate, Delta can arrange for you to be examined by one of our consulting dentists in your area. If the consultant recommends the work be replaced or corrected, Delta will intervene with the original dentist to either have the services replaced or corrected at no additional cost to you or obtain a refund. In the latter case, you are free to choose another dentist to receive your full benefits." Does it appear that Delta has usurped Peer Review activities and purposes? Does your state society know about this? Do they care? What is their position on this?

I am amazed each time I speak at a meeting or seminar to discover that dentists do not know that they have joined an HMO or PPO. The disguise is so clever that they think that these companies are insurance companies. Most dentists have never even read the contract. Please remember, this is a litigious society. You can and will be sued for offenses that are contrived by malicious people wanting money. Consider the liabilities that you might incur before joining anything!

One final thought. A strategic advantage must differentiate you in the marketplace. The advantage must be sustainable or maintainable.

Lower fees are never a sustainable market advantage-someone always will be willing to work for less.

The author practices in St. George, UT, and is a noted consultant and lecturer on dental insurance, case acceptance and profitability.

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