News & Insights

Dental Benefit Plan Agreements: Read 'Em or Weep

Journal of the Michigan Dental Association (February 2018)

By Daniel J. Schulte, MDA Legal Counsel
February 16, 2018

QUESTION: I recently graduated from dental school and am opening my own practice. I have applied for participation with several dental plans. What are the things that I should be most concerned about as I review these contracts?

ANSWER: You should hire an attorney experienced in reviewing these types of contracts. You should also meet with your attorney to discuss the operation of your practice, your plans to attract patients, grow, etc. The following terms will be contained in all these contracts and should be carefully considered by you prior to signing.

Fee Schedule. One of the most important, if not the most important, term in the contract relates to the fees you will be allowed to charge. You would think that a fee schedule would be attached to the contract, itemized by procedure code, so that you would know at the outset exactly how much you will be paid for your services. However, this is rarely the case. Typically, you will not know how much you will be paid for your services until you begin providing services and your claims are paid.

This is an absurd way of doing business. No one other than dentists, physicians and other health care providers would sell their services without first knowing the price. But is the way almost all insurers/dental plans operate. You should insist that a fee schedule be attached to the contract or be made available to you by some other means. At a minimum, you should demand to know the fees for your most-common procedures.

If all fee information is withheld, the termination provision (see below) becomes even more important.  You do not want to be in a position where six months notice is required for termination, obligating you in the meantime to provide services at fees much lower than you expected.

It is also important to know how and when the fee schedule may be changed. Is advance written notice required?  If the change is adverse and not too your liking, do you have the immediate right to terminate the agreement or are you obligated to provide services at even lower fees for some specified period?

Which services are “covered”? The contract will obligate you charge only the fee schedule amounts for "covered" services. Which services are covered could be much more broadly defined than you think. Are services covered only if provided to patients receiving a benefit from the insurer or plan? What if the insurer or plan does not provide a benefit (because there is no benefit for that procedure, an annual maximum has been met, etc)? Must you limit your fee even when the procedure is being paid for fully by the patient? What if the patient is enrolled in a plan that you have no contract with but the insurer or plan you have contracted with administers the patients plan? Does your contract with the administrator obligate you to limit your fees for all patients enrolled in plans it administers even though you have no contractual relationship with the plan providing the patient's benefit for the service you provided?

Term/Termination. The term of the contract is not always obvious. Rarely does it last for a defined period (e.g. one year, two years, etc.). Instead, these agreements are “evergreen.” This means they begin on the date signed and continue until someone terminates. You need to make sure you understanding how you and the other parties may terminate the agreement. Is written notice required? If so, how much advanced notice will you receive (or must you provide) in advance of the effective date of the termination?

You must also understand what obligations, if any, “survive” the termination of the agreement. For example, are you obligated to continue providing services to patients for a specified period of time, required to provide access (for audit or other purposes) to your records for some period of time following a termination, etc.?

In summary, be informed, ask questions, and be sure you understand what you're signing. That's true of dental benefit plan agreements, and also true of any contractual agreement you may be presented with in the course of dental practice.

About Daniel Schulte ...

Daniel J. Schulte has more than 20 years experience representing small business owners in all aspects of transactional, operational and regulatory legal matters. A Certified Public Accountant as well as an attorney, Dan is the firm's managing partner and chair of the Health Care Practice Group.  

He regularly advises and counsels concerning the formation of business entities, the preparation and review of business and corporate contracts, the purchase and sale of ownership interests in businesses and/or their assets, and the purchase, sale and leasing of real estate. A significant component of Dan’s practice involves representing healthcare professionals in state regulatory matters, including disciplinary and other licensing disputes with the State of Michigan, and federal regulatory matters including fraud and abuse issues. He also counsels on the anti-kickback and Stark laws, preparation of compliance programs, and responding to and negotiating settlements in connection with government enforcement actions.

Dan is well-known for his knowledge and experience in the area of association law, and is primarily responsible for the firm’s representation of the Michigan State Medical Society the Michigan Dental Association and the Michigan Osteopathic Association.  His work related to association law includes the drafting and review of new legislation and the preparation of Amicus Curiae Briefs for filing in Michigan’s Supreme Court and Court of Appeals on a variety of topics affecting health care professionals practicing in Michigan.

Dan writes articles and presents frequently before legal, medical and business groups on a variety of topics, including HIPAA, the HITECH Act, the Stark Law, the fraud and abuse laws, health care compliance plans, business succession planning, asset protection, and estate and tax planning. 

He is ranked among The Best Lawyers in America®, and has been named a “Michigan Super Lawyer” by Thomson Reuters.

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