28 TAC §§21.3601 - 21.3606
The Commissioner of Insurance adopts new Subchapter BB, §§21.3601
- 21.3606, concerning dental care benefits in health insurance policies. Sections
21.3604 and 21.3605 are adopted with changes to the proposed text as published
in the March 12, 2004 issue of the
Texas Register
(29 TexReg 2548). Sections 21.3601 - 21.3603 and 21.3606 are adopted
without change and will not be republished.
The adopted rules are necessary to clarify Insurance Code Article 21.53
and the allowable standards for the payment of benefits or reimbursement for
the cost of dental care services provided by contracting and non-contracting
dentists. The department is aware that some insurers are contracting with
dentists for reduced fees when providing dental care services to insureds.
This practice has caused confusion regarding the requirement that health insurance
policies pay or reimburse non-contracting dentists using the same standard
as contracting dentists. The rules clarify that a payment or reimbursement
standard expressed as a percentage of a contracting or non-contracting dentist’s
charges is acceptable if it is uniformly applied to contracting and non-contracting
dentists.
The department changed proposed §§21.3604 and 21.3605 as published;
however, the changes do not introduce new subject matters or affect additional
persons than those subject to the proposal as originally published. Specifically,
in response to a commenter’s request, the department added the term
"maximums" to §21.3604(a) regarding payment of benefits for dental care
services to further clarify that benefits in a dental policy may not differ
based upon whether the dental care services were provided by a contracting
or non-contracting dentist. Also, the department changed the effective date
of the subchapter in §21.3605 to accommodate policy form filings made
necessary by the rules.
New §21.3601 outlines the scope of the rules. Section 21.3602 defines
terms relating to dental care benefits. Section 21.3603 states that a health
insurance policy may not prevent an insured from selecting the dentist of
his choice or interfere with the diagnosis or treatment of a dentist practicing
within the scope of the dentist’s license. Section 21.3604 prohibits
a health insurance policy from containing a different level of payment of
benefits for covered dental care services based on whether the services were
provided by a contracting or non-contracting dentist. The section makes clear
that the policy benefits, including the payment or reimbursement percentage,
must not vary based on whether the services were performed by a contracting
or non-contracting dentist. This results in a single standard for payment
to all dentists under the health insurance policy. The section clarifies that
the payment or reimbursement standard may be expressed as a percentage of
a dentist’s charges and that the charges to which the percentage will
be applied may be defined as both a contracted rate and a usual and customary
rate. This may result in different monetary amounts being paid to dentists
depending on whether the dentist contracts with the insurer. The amount paid
to a dentist, as well as out-of-pocket expenses for an insured, may ultimately
differ based upon whether the dentist is a contracting or non-contracting
dentist. However, the differences in amounts are based upon the amount charged
by the dentist, which the insurer may cap through the use of contracted rates
or a usual and customary amount as determined by the insurer. The section
also states that an insurer is not required to make payment to a non-contracting
dentist that is greater than the amount charged for the service. Section 21.3605
states that the requirements of the rules are applicable to health insurance
polices containing benefits for dental care services issued or renewed on
or after July 1, 2004. The adoption does not require insurers to make any
changes to existing policies upon renewal if the policies were otherwise in
compliance with Article 21.53. Section 21.3606 contains a severability clause
indicating that if any provision in the rules is found to be invalid, those
provisions that can otherwise be given effect will not be affected.
General
Comment: A commenter expressed support for the rule and commended the department
particularly for addressing concerns regarding flexibility in how plans may
apply a reimbursement percentage to contract rates for contracting dentists
and the same reimbursement percentage to "usual and customary fees" (or whatever
the dentist charges, if lower than "usual and customary") to non-contracting
dentists.
Agency Response: The department appreciates the comment.
§21.3604(a):
Comment: A commenter suggested that because the term "cost-sharing" is
not defined in §21.3602, the term could be subject to varying interpretations
by plans and therefore requested removal of the term.
Agency Response: The department declines to make the suggested change.
This provision is simply a clarification of the department’s consistent
interpretation of Article 21.53 in relation to Article 3.70-3C, which does
not allow for dental preferred provider benefit plans. As such, the rule makes
clear that deductibles, maximums, co-insurance percentages, and other cost-sharing
provisions affecting the benefits paid under the policy may not differ based
upon whether the services were provided by a contracting or non-contracting
dentist.
Comment: A commenter asked that the department consider allowing some flexibility
in plan design relating to deductibles between services provided by contracted
versus non-contracted providers.
Agency Response: The department declines to make the suggested change.
The rule makes clear that deductibles, maximums, co-insurance percentages,
and other cost-sharing provisions affecting the benefits paid under the policy
may not differ based upon whether the services were provided by a contracting
or non-contracting dentist.
Comment: A commenter requested the addition of the word "maximums" between
the words "deductibles" and "or other cost sharing provisions."
Agency Response: The department agrees with this comment and has revised
the rule accordingly. The change is consistent with the department’s
long-standing interpretation of Article 21.53 in relation to Article 3.70-3C,
which does not allow for dental preferred provider benefit plans.
§21.3604(c):
Comment: A commenter suggested inserting the phrase "for contracting dentists"
after the phrase "to a contracted rate" and before the word "and" and inserting
the phrase "for non-contracting dentists" after the phrase "or words of similar
import."
Agency Response: The department declines to make the suggested changes.
While addition of the commenter’s suggested language would not result
in an inaccurate statement concerning what the rule allows, the language as
proposed allows for more flexibility in an insurer’s ability to contract
with dentists.
For, with changes: Delta Dental Insurance Company, National Association
of Dental Plans.
The new sections are adopted under the Insurance Code Articles
3.70-3C and 21.53 and §36.001. While Article 3.70-3C generally authorizes
preferred provider benefit plans, Section 2 specifically states that it does
not apply to provisions for dental care benefits in any health insurance policy.
Article 21.53 provides requirements for health insurance polices containing
benefits for dental care services, including requirements relating to an insured’s
right to choose a dentist and payment or reimbursement standards as applied
to both contracting and non-contracting dentists. Section 36.001 provides
that the Commissioner of Insurance may adopt any rules necessary and appropriate
to implement the powers and duties of the Texas Department of Insurance under
the Insurance Code and other laws of this state.
§21.3604.Payment of Benefits for Dental Care Services.
(a)
A health insurance policy shall not provide a different
level of payment of benefits or reimbursement, including deductibles, maximums
or other cost-sharing provisions, for covered dental care services based on
whether the services are provided by a contracting or non-contracting dentist.
(b)
A health insurance policy shall define and explain the
standard of payment or reimbursement for dental care services. In defining
the standard, a policy may express the level of payment or reimbursement as
a percentage of charges for dental care services, provided the insurer uses
the same percentage for both contracting and non-contracting dentists.
(c)
A health insurance policy may, in the same policy, apply
the percentage specified in subsection (b) of this section to a contracted
rate and a fee expressed as "usual and customary" or words of similar import.
(d)
Notwithstanding subsection (a) of this section, an insurer
is not required to make payment to a non-contracting dentist that is greater
than the actual fee charged for the dental care service.
(e)
A health insurance policy must disclose, if applicable,
that the benefit offered is limited to the least costly treatment.
(f)
A health insurance policy must provide that an insured
may assign the right to benefits to a dentist who provides dental care services,
in which case, the insurer shall pay benefits directly to the designated dentist,
and such payment shall discharge the insurer’s obligation to pay those
benefits.
§21.3605.Applicability.
This subchapter is applicable to health insurance policies issued or
renewed on or after July 1, 2004.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on May 24, 2004.
TRD-200403494
Gene C. Jarmon
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: June 13, 2004
Proposal publication date: March 12, 2004
For further information, please call: (512) 463-6327