Interpretation of "Covered Services" in New Laws about Dental Plans

Nebraska Department of Insurance Guidance Document IGD - - B1 Title: Interpretation of “Covered Service” in New Laws about Dental Plans Issue Date: October 20, 2022 Previously: Issued as CB-143, July 22, 2019 Notice: This guidance document is advisory in nature but is binding on an agency until amended by such agency. A guidance document does not include internal procedural documents that only affect the internal operations of the agency and does not impose additional requirements or penalties on regulated parties or include confidential information or rules and regulations made in accordance with the Administrative Procedure Act. If you believe that this guidance document imposes additional requirements or penalties on regulated parties, you may request a review of the document. On December 8, 2014, the Nebraska Department of Insurance (NDOI) issued a notice, “Interpretation of ‘Covered Service’ in New Laws about Dental Plans.” In 2016, the Nebraska Legislature amended the Administrative Procedures Act to include a definition of a guidance document. NEB.REV.STAT. § 84- 901(5) defines a guidance document, in part, as any statement developed by an agency that lacks the force of law but provides information or direction of general application to the public to interpret or implement statutes or such agency’s rules or regulations. A guidance document is binding on an agency until amended by the agency. Upon review, the Department has determined that the December 8 notice meets the definition of a guidance document and has been converted to the necessary format in Company Bulletin, CB-143. NEB.REV.STAT. § 44-3805(3) and § 44-7,105 prevents prepaid dental services plans, insurance policies, self-funded employee benefit plans, and prepaid limited health organizations plans from dictating the price of dental services that they do not cover. Sections 44-3805 and 44-7,105 do not define the term “covered service.” Insurance and dental professionals implementing § 44-3805 and § 44-7,105 discovered that “covered service” is subject to two interpretations. 1. “Covered service” could be defined as any service for which the insurer or plan actually covered (paid) part of the dental provider’s bill, with “noncovered service” defined as any service for which the insurer pays no money to the dental provider. 2. “Covered service” could also be defined as any service covered in the contract, with “noncovered service” defined as any service for which the contract does not provide payment under any circumstances. For example, Jane’s dental policy provides maximum benefits of $1,000 per year. Jane already received the $1,000 in benefits this year. So, she will pay out of pocket for any additional dental services. Jane goes to her dentist to have a tooth repaired. Fillings are covered under Jane’s policy, but because Jane has exceeded her annual maximum, she will pay the entire bill. Under definition (1), the filling is not “covered” because the insurer is not paying the bill, so Jane’s insurer cannot dictate the fee Jane’s dentist charges for the filings. Under definition (2), the filling is “covered” because the insurance policy pays for fillings when the patient has not exceeded annual benefit limits. Jane’s insurer can require the dentist to charge only the contracted rate for the filing. The NDOI allows dental plans to use either definition of “covered service” in provider contracts. This approach is based on testimony describing “covered services” in the legislative history for LB 813 (codified at § 44-3805(3)) and LB 810 (codified at § 44-7,105). The NDOI will continue to interpret § 44-3805(3) and § 44-7,105 to allow either definition of “covered services” until the Legislature or the courts supply a definition . Questions concerning this guidance document should be directed to the Department’s legal division at 402-471-2201.