Network Leasing Arrangements and Their Effect on Fees

Question: I signed up with a network leasing company. My understanding was that this company was only forming a network of dentists for the purpose of “leasing” it to dental insurers and plans. I was told that this would steer the patients who had this dental insurance or were enrolled in these plans to me. However, the leasing company will not provide me with a fee schedule. It seems I am being paid varying amounts for the same services. How can this be?

Answer: I have not reviewed the contract you signed, nor do I have any information regarding the arrangements between your network leasing company and those dental insurers and plans it has contracted with. This makes it impossible to address your exact situation. However, I can tell you that the MDA has received similar questions from several members recently. It seems most have contracted with a network leasing company without being provided the information necessary to fully understand the arrangement, especially when it comes to what fees will be paid for the services.

Unlike any other provider of goods or services, dentists and other health care professionals often do not know what they will be paid until the payment for their services is received. Insurers and plans control the fees and are reluctant to make their fee schedules known. Health care professionals for the most part go in blind, assuming increased patient volume will make up for the unknown fee discounts. This approach is even more problematic when contracting with a leasing company.

Not every dental insurer or plan desires to form and manage a network of dentists. Some prefer to only sell their insurance products and/or administer the provision of dental benefits. To these insurers and plans, being able to lease a network of dentists created and maintained by someone else is very attractive.

In the simplest of these arrangements, the dentist provides services to patients with dental insurance/dental benefits covered by an insurer/plan with which the dentist has no contract. The fee paid is what the leasing company has agreed to pay the dentist. This amount might not be known until the dentist is paid, if the leasing company does not provide a fee schedule to its network dentists. Dentists are typically required to file a claim for payment, prohibited from balance billing, etc., the same as would be the case if they contracted directly with the insurer/plan.

Read the complete Q&A in the Journal of the Michigan Dental Association on page 26.

About the author:

Daniel J. Schulte has more than 25 years of experience helping clients solve tough problems and capitalize on opportunities that require a blend of business and legal expertise. His practice focuses on addressing the legal, business, licensing, and regulatory challenges of health care professionals, organizations, and facilities. Dan understands how legal issues impact business objectives and, as a result, offers his clients practical, results-oriented advice. He is a Certified Public Accountant, former managing partner and current executive committee member of the firm. Dan also serves as co-chair of the firm’s Health Care Practice Group.

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