DMHC rules expand the rights of providers
By: Greg Alterton

Every dental plan in California regulated by the Department of Managed Health Care now has in place a formal procedure whereby members of its provider network can challenge the plan' s payment decisions.

The passage of two bills in 2000, AB 1455 (Scott) and SB 1177 (Perata), placed into law "prompt pay" requirements when reimbursing claims from providers. The bills also contained requirements that the state' s departments of Managed Health Care, DMHC, and Insurance develop regulations to require plans and insurers to establish internal dispute resolution mechanisms for providers to resolve billing and claims disputes. These regulations were adopted late in 2003, and the compliance date for plans to notify network providers of the dispute resolution process was Jan. 1, 2004.

Both the legislation and the regulations require that each dental plan' s dispute resolution process be "fast, fair, and cost-effective." The rules required plans to inform providers of the specific procedures for resolving payment disputes, and require plans to again notify providers of their dispute resolution process whenever the plan adjusts or denies a claim. Failure to provide such notification is a violation of California Code of Regulations Section 1300.71.38(b). The law also requires dental plans to submit to DMHC annual reports regarding their dispute resolution mechanisms, as well as to report on the issues raised and resolved through dispute resolution processes.

According to the provider dispute resolution regulations:

• A "provider dispute" means a written notice to the plan "challenging, appealing, or asking reconsideration" of a claim that has been denied, adjusted or contested, or disputing a request from the plan for reimbursement of a reputed overpayment.
• Arbitration shall not be deemed by a plan as the sole a provider dispute resolution mechanism.
• Whenever a plan contests, adjusts, or denies a claim, it shall inform the provider of the availability of the provider dispute resolution mechanism and the procedures for obtaining forms and instructions for filing a challenge.
• Providers may submit a challenge to a plan' s payment decision or action within 365 days of the decision or action; however, if the payment decision is one demanding a refund of previously paid claims, a provider may wish to challenge that refund decision immediately.
• Plans must acknowledge receipt of a provider' s dispute within two working days of receiving a challenge that are submitted electronically, and within 15 working days if submitted by mail.
• Determinations of a provider' s dispute must be made within 45 working days after receipt of the provider dispute, or amended dispute.
• Plans must designate a principal officer who will be responsible for maintenance of their dispute resolution mechanism.
• The provider dispute shall be handled and resolved by the plan without charge to the provider; however, a plan shall not be responsible for reimbursing a provider for any costs incurred by the provider in connection with utilizing the provider dispute mechanism (e.g., such as the cost of an attorney).

A payer' s practice or policy which contradicts any of these points is a violation of state regulations.

Plan dispute resolution mechanisms which are not "fast, fair, and cost-effective," or which in any way violate the required notice to providers of the option to file a challenge, or which violate the timeframes within which a challenge must be responded to, may be reported to the DMHC at http://www.dmhc.ca.gov/hpp/pr/problem.asp.

The "prompt pay" laws and rules also define what is termed an "unjust" or "unfair payment pattern" (http://www.cda.org/member/news/unjust.pdf). Such payment patterns, if they persist, should be communicated to the DMHC.

The Department of Insurance also has regulations governing "fair claims settlements," but its regulations, which were scheduled to go into effect July 23, 2003, are currently subject to litigation. The previous DOI regulations are still in place. Information about filing a request for assistance with the DOI is available online (http://www.insurance.ca.gov/docs/FS-Contacts.htm). However, the Department does not accept reports of unfair payment practices from health care providers, and only recognizes the contract between the patient and the insurance company.

While state laws and regulations enable providers to contest reimbursement decisions, the regulations are less specific about what form a plan' s dispute resolution process should take. CDA is interested in any plan' s process which does not in fact provide due process or a fair hearing for the provider or consideration of the merits of the provider' s challenge.

Hence, complaints or disputes over plans' payment decisions should also be reported to the California Dental Association at (800) 736-7071, ext. 4256. A pattern of possible unfair payment or business practices identified by CDA from member complaints may be taken up with the CDA Council on Dental Care for review.

Greg Alterton is a policy analyst for CDA' s Public Policy division.