The Iowa Supreme Court has ruled 7-0 to put limits on how regulators, insurers and consumers can interpret a state law that lets dental plans restrict balance billing.
The law, Iowa Code Section 514C.3B, does let dental plans use provider contracts to prohibit balance billing when a plan pays at least part of the cost of the care, the court says.
But, if a plan member pays the full cost of a procedure, then the dental plan cannot impose any balance-billing restrictions on bills for that procedure, the court says.
Iowa Supreme Court Justice Edward Mansfield wrote the opinion explaining the court’s decision in the case, Iowa Dental vs. Iowa Insurance Division et al. (Case Number 12-1280).
The ruling could have an indirect effect on interpretation of dental plan balance-billing cases in other states, because Mansfield analyzes the dental plan balance-billing laws passed in nine states in 2009 and 2010.
“Balance billing” happens when a dentist, physician or other care provider bills the patient for the difference between the maximum fee that an insurer allows and what the provider wants to charge.
In 2010, Iowa lawmakers adopted the Section 514C.3B law, which states that a dental insurer or dental plan administrator can include limits on balance billing for covered services in provider contracts.
The Iowa commissioner ruled that plans can apply balance-billing restrictions when services that could be covered are not simply because of plan design features.
The commissioner’s ruling could have helped hold down a patient’s bill if, for example, a patient who went to the dentist for an extra cleaning. If the commissioner’s ruling were still in effect, the patient might pay the insurer’s discounted, in-network price for the extra cleaning, even though the insurer itself was not helping to pay for the cleaning.
The Federation of Iowa Insurers – which represents Wellmark Blue Cross and Blue Shield of Iowa, Delta Dental of Iowa and Principal Financial Group Inc. — intervened at the district court level. The federation said the court should uphold the commissioner because the ruling was good for consumers, the commissioner was vested with interpretive authority, and the ruling was not illogical, irrational or unjustifiable.
The district court sided with the commissioner.
Mansfield said a close reading of the statute shows that lawmakers meant the term “covered services” to refer to situations in which a dental plan will be reimbursing a consumer for the services provided.
Iowa lawmakers explicitly included the word “reimbursed” in their definition of “covered services,” and the other nine states did not, Mansfield said.
“Our general assembly apparently had other templates available if it had wanted to clearly prohibit dental plans from imposing maximum fees on services that would have been reimbursed but for a plan limitation,” Mansfield said. “Instead of using language that paralleled that of the other states, our legislature defined ‘covered services’ to mean ‘services reimbursed under the dental plan.’”
Iowa’s insurance commissioner warned in 2011 that some patients could face significantly higher costs if dentists prevailed in the case.
The Associated Press added information to this report.