Full question:
I am a dentist and am contracted with some dental PPO insurance companies. Some plans allow me to charge my fee for service fees to the patient after the patient has reached their yearly maximum benefit coverage allowance. However, some say that since I am contracted with them, I need to charge my discounted rate for that plan to the patient- even after the patient has exceeded their yearly benefit maximum. I do not trust what the insurance company tells me and would like the opinion of a lawyer. What can I legally charge AFTER their yearly maximum is reached? Can each PPO legally have different rules?
- Category: Insurance
- Date:
- State: Arizona
Answer:
The answer will depend on the contract terms involved. The terms of your contract with your PPO will generally determine your rights to rate setting. You should carefully review the terms of the agreement to determine your rights and your PPO's obligations relating to payment.
Insurance policies and participation are mainly governed by state laws and the terms of the contracts involved. Terms imposed in contracts for insurance are required to be disclosed in filings and may not be misleading, discriminatory, or tend to create a monopoly. A PPO can have different rules than another. I suggest you contact a local attorney who can review the facts and documebnts involved.
The following are AZ statutes governing prohibited practices by PPOs.:
20-461. Unfair claim settlement practices
A. A person shall not commit or perform with such a frequency to
indicate as a general business practice any of the following:
1. Misrepresenting pertinent facts or insurance policy provisions
relating to coverages at issue.
2. Failing to acknowledge and act reasonably and promptly upon
communications with respect to claims arising under an insurance policy.
3. Failing to adopt and implement reasonable standards for the prompt
investigation of claims arising under an insurance policy.
4. Refusing to pay claims without conducting a reasonable investigation
based upon all available information.
5. Failing to affirm or deny coverage of claims within a reasonable time
after proof of loss statements have been completed.
6. Not attempting in good faith to effectuate prompt, fair and equitable
settlements of claims in which liability has become reasonably clear.
7. As a property or casualty insurer, failing to recognize a valid
assignment of a claim. The property or casualty insurer shall have the
rights consistent with the provisions of its insurance policy to receive
notice of loss or claim and to all defenses it may have to the loss or
claim, but not otherwise to restrict an assignment of a loss or claim after
a loss has occurred.
8. Compelling insureds to institute litigation to recover amounts due
under an insurance policy by offering substantially less than the amounts
ultimately recovered in actions brought by the insureds.
9. Attempting to settle a claim for less than the amount to which a
reasonable person would have believed he was entitled by reference to
written or printed advertising material accompanying or made part of an
application.
10. Attempting to settle claims on the basis of an application which was
altered without notice to, or knowledge or consent of, the insured.
11. Making claims payments to insureds or beneficiaries not accompanied
by a statement setting forth the coverage under which the payments are
being made.
12. Making known to insureds or claimants a policy of appealing from
arbitration awards in favor of insureds or claimants for the purpose of
compelling them to accept settlements or compromises less than the amount
awarded in arbitration.
13. Delaying the investigation or payment of claims by requiring an
insured, a claimant or the physician of either to submit a preliminary
claim report and then requiring the subsequent submission of formal proof
of loss forms, both of which submissions contain substantially the same
information.
14. Failing to promptly settle claims if liability has become reasonably
clear under one portion of the insurance policy coverage in order to
influence settlements under other portions of the insurance policy
coverage.
15. Failing to promptly provide a reasonable explanation of the basis in
the insurance policy relative to the facts or applicable law for denial of
a claim or for the offer of a compromise settlement.
16. Attempting to settle claims for the replacement of any nonmechanical
sheet metal or plastic part which generally constitutes the exterior of a
motor vehicle, including inner and outer panels, with an aftermarket crash
part which is not made by or for the manufacturer of an insured's motor
vehicle unless the part meets the specifications of section 44-1292 and
unless the consumer is advised in a written notice attached to or printed
on a repair estimate which:
(a) Clearly identifies each part.
(b) Contains the following information in ten point or larger type:
This estimate has been prepared based on the use of replacement parts
supplied by a source other than the manufacturer of your motor
vehicle. Warranties applicable to these replacement parts are provided
by the manufacturer or distributor of these parts rather than the
manufacturer of your vehicle.
17. As an insurer subject to section 20-826, 20-1342, 20-1402 or 20-1404,
or as an insurer of the same type as those subject to section 20-826,
20-1342, 20-1402 or 20-1404 that issues policies, contracts, plans,
coverages or evidences of coverage for delivery in this state, failing to
pay charges for reasonable and necessary services provided by any
physician licensed pursuant to title 32, chapter 8, 13 or 17, if the
services are within the lawful scope of practice of the physician and the
insurance coverage includes diagnosis and treatment of the condition or
complaint, regardless of the nomenclature used to describe the
condition, complaint or service.
18. Failing to comply with chapter 15 of this title.
19. Denying liability for a claim under a motor vehicle liability policy
in effect at the time of an accident without having substantial facts based
on reasonable investigation to justify the denial for damages or injuries
that are a result of the accident and that were caused by the insured if
the denial is based solely on a medical condition that could affect the
insured's driving ability.
B. Nothing in subsection A, paragraph 17 of this section shall be
construed to prohibit the application of deductibles, coinsurance,
preferred provider organization requirements, cost containment measures or
quality assurance measures if they are equally applied to all types of
physicians referred to in this section, and if any limitation or condition
placed upon payment to or upon services, diagnosis or treatment by any
physician covered by this section is equally applied to all physicians
referred to in subsection A, paragraph 16 of this section, without
discrimination to the usual and customary procedures of any type of
physician. A determination under this section of discrimination to the
usual and customary procedures of any type of physician shall not be based
on whether an insurer applies medical necessity review to a particular type
of service or treatment.
C. In prescribing rules to implement this section, the director shall
follow, to the extent appropriate, the national association of insurance
commissioners unfair claims settlement practices model regulation.
D. Nothing contained in this section is intended to provide any private
right or cause of action to or on behalf of any insured or uninsured
resident or nonresident of this state. It is, however, the specific intent
of this section to provide solely an administrative remedy to the director
for any violation of this section or rule related to this section.
E. The director shall deposit, pursuant to sections 35-146 and 35-147,
all civil penalties collected pursuant to this article in the state general
fund.
20-383. Rate standards
A. An insurer shall not charge rates that are excessive, inadequate or unfairly discriminatory. An insurer shall not charge any rate which if continued will have or tend to have the effect of destroying competition or establishing a monopoly.
B. Rates are excessive if they are likely to produce an underwriting profit that is unreasonably high for the class of business or if expenses are unreasonably high in relation to established services rendered. Rates are presumed not to be excessive if a reasonable degree of price competition exists at the consumer level with respect to a particular class of business. A competitive market is presumed to exist unless the director, after a hearing, determines that a reasonable degree of price competition does not exist in the market and issues an order pursuant to section 20-388 to that effect. The order expires no later than one year after its effective date unless the director finds, after a hearing, that there is a continuing lack of reasonable competition in the market. If the director finds, after a hearing, that a reasonable degree of price competition among insurers writing a particular line, subline or class of business does not exist, he may prescribe an allowable percentage of increase in a proposed rate level for such line, subline or class of business. Any insurer making a rate filing exceeding the allowable percentage of increase shall, prior to the effective date of such proposed rate increase, provide the director with sufficient actuarial data to support such increase. The director's order establishing allowable percentages of increase for a particular line, subline or class of business shall expire no later than one year after its effective date. In determining whether a reasonable degree of price competition exists, the director shall consider relevant tests of competition pertaining to market structure, market performance and market conduct, including:
1. The number of insurers actively engaged in the class of business.
2. The market share and changes in market share of insurers.
3. The existence of a degree of rate differentials in a particular class of business.
4. The ease of entry and latent competition of insurers capable of easy entry.
C. Rates are inadequate if they are clearly insufficient to sustain projected losses and expenses in the class of business to which they apply.
D. A rate is not unfairly discriminatory in relation to another in the same class if it reflects equitably the differences in expected losses and expenses. Rates are not unfairly discriminatory because different premiums result for policyholders with like loss exposures but different expense factors, or like expense factors but different loss exposures, if the rates reflect the differences with reasonable accuracy. Rates are not unfairly discriminatory if they are averaged broadly among persons insured under a group, franchise or blanket policy.
20-451. Rebates on other than life or disability insurance
No insurer or employee, insurance producer or representative thereof shall knowingly charge, demand or receive a premium for any policy of insurance, other than life or disability insurance, except in accordance with any applicable filing on file with the director. No such insurer, employee, insurance producer or representative shall offer, pay, allow or give, directly or indirectly, as an inducement to insurance, or after insurance has been effected, any rebate, discount, abatement, credit or reduction of the premium named in a policy of insurance, or any special favor or advantage in the dividends or other benefits to accrue thereon, or any valuable consideration or inducement whatever, not specified in the policy of insurance, except to the extent provided for in an applicable filing. No insured named in a policy of insurance nor any representative or employee of the insured shall knowingly receive or accept, directly or indirectly, any such rebate, discount, abatement, credit or reduction of premium, or any such special favor or advantage or valuable consideration or inducement. Nothing in this section shall be construed as prohibiting the payment of commissions or other compensation to duly licensed insurance producers nor as prohibiting any insurer from allowing or returning to its participating policyholders, members or subscribers dividends, savings or unabsorbed premium deposits. As used in this section "insurance" includes suretyship and "policy" includes bond.
20-841. Prohibiting denial of certain contract benefits
A. Notwithstanding any provision of any subscription contract of a hospital and medical service corporation, benefits shall not be denied under the contract for any medical or surgical service performed by a holder of a license issued pursuant to title 32, chapter 7 or 11, if the service performed is within the lawful scope of such person's license, and if the service is surgical, such person is a member of the staff of an accredited hospital, and if such contract would have provided benefits if such service had been performed by a holder of a license issued pursuant to title 32, chapter 13.
B. If a subscription contract of a hospital and medical service corporation provides for or offers eye care services, the subscriber shall have freedom of choice to select either an optometrist or a physician and surgeon skilled in diseases of the eye to provide the examination, care, or treatment for which the subscriber is eligible and which falls within the scope of practice of the optometrist or physician and surgeon. Unless such subscription contract otherwise provides, there shall be no reimbursement for ophthalmic materials, lenses, spectacles, eyeglasses, or appurtenances thereto.
C. If any subscription contract of a hospital and medical service corporation is written to provide coverage for psychiatric, drug abuse or alcoholism services, reimbursement for such services shall be made in accordance with the terms of the contract without regard to whether the covered services are rendered in a psychiatric special hospital or general hospital. Reimbursement for the cost of the service may be made directly to the person licensed or certified pursuant to title 32, chapter 13 or 19.1 or to the subscriber if the cost of the service has not been reimbursed to another provider or health care institution.
20-1012. Prohibited practices
Chapter 2, article 6 of this title, relating to unfair trade practices and frauds, shall apply to prepaid dental plan organizations, except to the extent the director determines that the nature of prepaid dental plan organizations render particular provisions inappropriate.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.
