NOTICE TO IOWA DENTAL INSURANCE PROVIDERS

IOWA INSURANCE DIVISION

NOTICE TO IOWA DENTAL INSURANCE PROVIDERS

The Iowa Dental Association recently appealed a decision of the Iowa Insurance Commissioner concerning his interpretation of Iowa Code section 514C.3B (2011).  Section 514C.3B addresses fees for dental services provided under dental plans in force in Iowa.

The Commissioner’s interpretation was the product of a request for a declaratory order made by the Iowa Dental Association (IDA).  The Commissioner ultimately concluded that section 514C.3B permitted insurers to limit fees dentists could charge for services that could be, but were not actually, reimbursed under dental plans.

IDA sought judicial review of the Commissioner’s decision in district court.  The district court affirmed the Commissioner’s decision, and IDA appealed the district court’s decision to the Iowa Supreme Court.  The Supreme Court retained the case on appeal and on May 17, 2013 reversed the district court’s and the Commissioner’s decisions in Iowa Dental Association v. Iowa Insurance Division et al., 831 N.W.2d 138 (Iowa 2013) (referred to hereafter as “Iowa Dental Association”).  The Supreme Court ultimately concluded that

                       a dental] service is “covered” within the meaning of Iowa Code section 514C.3B only if it is                                    actually r eimbursed to some extent under the dental plan. Hence, an insurer may only impose a maximum fee on a service when a reimbursement has been provided for that service.

The Commissioner is bound by the Supreme Court’s decision.  The Commissioner will enforce the decision   if he receives complaints that insurers are placing fee caps on dentists for dental services that are not reimbursed to some extent under consumers’ dental plans or are misrepresenting the effect of the decision. 

This reimbursement requirement applies each time a dental service is provided to a patient.  Once a patient has exhausted the maximum benefit for a particular dental service under his dental plan, his insurer cannot cap the fee the treating dentist may charge the specific patient for that dental service for the balance of the coverage period under the remaining terms and conditions of the patient’s dental plan.  For example, if a dental plan pays in whole or in part for two teeth cleanings per year and the patient requests a third cleaning during the twelve month term, the patient is “off the plan” for the third cleaning and the insurer cannot dictate to the treating dentist what his fee to the patient for the third cleaning will be.

Consumers of dental services in Iowa are entitled to know how the Iowa Dental Association decision affects fees under their respective dental plans.  The Commissioner strongly encourages insurers providing dental plans in Iowa to provide a notice to dental patients that explains the Supreme Court’s recent holding.  The notice should be provided in the usual and customary manner in which similar information is provided to patients or insureds.    The following language could be used together with an internet link to the IID’s website www.iid.state.ia.us where this Notice is posted or it may be provided in kind to the consumer:

“The Iowa Supreme Court has determined that Iowa law does not allow dental insurers to set maximum fees on services that the insurer does not cover or reimburse.  As your insurer, we will have no involvement in setting the fee, and any questions or concerns you may have about such fee should be directed to your dentist.” 

Questions concerning this notice may be directed to Jim Mumford at the Iowa Insurance Division at jim.mumford@iid.iowa.gov.