State-regulated carriers in Louisiana are now prohibited from systematically downcoding procedures and are required to disclose downcoding policies.
Louisiana Act 187 and Act 256 were passed on June 11 and will go into effect on August 1, 2020. This is a huge victory for the Louisiana Dental Association and Louisiana providers. The ADA provided support and guidance. Now that a template exists for the authoring and lobbying of the bill, it is highly likely that more states will soon vote on similar legislation.
A few key points from the two bills:
- Carriers cannot indicate on the explanation of benefits (EOB) form that the originally coded procedure is inappropriate.
- The bill also cannot state that the charge was excessive unless it can be proved that the charge is unusually high.
- Treatment for preexisting conditions must now be considered for benefits. However, a 12-month waiting period can be imposed.
- A fixed partial denture (commonly called a bridge) cannot be downcoded to a removable prosthetic.
- If a code is changed, then the EOB must state the applicable policy clause. This transparency is helpful for both patients and providers to understand the carrier's decision.
- Procedure codes cannot be changed unless the change is consistent with carrier policies and the carrier has enough information to support the change.
The last bullet point may cause issues for providers because the bill's language for this section reads, "The dental service contractor has sufficient information to make the change." What does that mean? You may be asked to submit information in order for them to make a decision. Upon receipt of the information, a carrier could then say it has met both requirements when downcoding the procedure. It seems to leave a loophole, but time will tell if this becomes a problem.
The biggest caveat to this bill is that it only covers fully funded plans. According to the ADA's news release, roughly half of covered patients have this type of plan. Self-funded plans are not beholden to state laws, as they fall under a federal law called the Employee Retirement Income Security Act (ERISA). It is important to learn the distinction between fully funded and self-funded plans because only fully funded plans must adhere to state law.
In general, large employers (usually those with more than 100 employees) utilize self-funding of plans to save costs. These companies have enough reserves to self-fund the coverage. The carrier acts as the administrator of benefits. With fully funded plans, the company does not usually have as large of a reserve, so it turns to the carrier not only to administer the plan but also to fund it. The difference is made up in the premium and by assessing the risk of the group for cost of coverage. For more information and to hear from carrier representatives, you may be interested in this 2019 ADA webinar.
Keep an eye on your state association's legislative activity for any similar proposals. Bills like these will bring more transparency to dental benefit costs. This will help us be more accurate with treatment estimates and collections.
Our patients trust us to be clear and accurate with financial obligations. It's up to us to translate all of these rules and regulations so that we can provide a more positive patient experience.
Teresa Duncan is the president of Odyssey Management and an international speaker who focuses on revenue, dental insurance, and management issues. She is the author of Moving Your Patients to Yes! Easy Insurance Conversations.
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