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Thursday
Jun022011

« Alan Wicks, WSDA's Legal Counsel, Comments on WDS Fee Decrease »

Recently, when WDS lowered their fees to dentists, some of you asked why we couldn’t do more. We heard your frustration, and were ourselves frustrated by our inability to move to your defense in a more concrete fashion. The truth is, anti-trust laws are extraordinarily clear in this respect: it is not permissible for us to intervene on your behalf, to organize or join with you in any action that might appear we were attempting to set or change fees, lest we face swift investigation and possible penalties by the Federal Trade Commission.* And to be clear: the same laws regarding organizing apply to you, as individuals.

In Review
Deep fee cuts have been made for most dentists participating in the programs of Washington Dental Service (WDS), Washington’s Delta Dental plan. The cuts are effective June 15. Actual changes vary by an individual dentist’s fee history and by the actual service codes. Many participants report projected effective reductions in overall WDS reimbursements of 15 percent, or more, when compared to their revenues from WDS reimbursement levels presently in effect. The dramatic reductions follow two years in which WDS reimbursement rates and filed fees have been frozen.

WDS’s announcement emphasizes the cost concerns it shares with large employers who purchase dental insurance. It sees these changes as necessary for WDS to remain competitive in its market. While not mentioned in the announcement letter, it is reported by some participants that WDS may have a competitive disadvantage compared to some insurance carriers which sell medical and dental insurance. WDS is a dental only program.

Washington’s Office of Insurance Commissioner (OIC) received the changes and allowed them to go into effect. WSDA has been informed OIC will be monitoring the WDS list of providers which is updated on a monthly basis. If it reveals gaps in geographic coverage for a particular area, the OIC may require WDS to contract for additional participants or otherwise demonstrate its effective care for the insured persons in that area.

These changes will affect each participant according to their individual circumstances. Each individual dentist must analyze the impact for his or her own practice by considering the actual services provided.

For example, the changes are by specific codes. Services which aren’t provided in a particular practice are less significant than the most frequent services. And some service codes which are nearly obsolete were increased but the increase will not be meaningful, if the service code isn’t used. Consequently, using an overall percentage change is likely to give you an inaccurate result.

Also, individual practices may vary in their overall indebtedness and the proportion of fixed costs to variable costs. These would affect the flexibility of the practice in its efforts to adjust costs of operation. Some of the variables include the unused capacity of the practice, if any, and the relative scale of WDS patients to overall patients.

To determine the actual impact of the changes requires careful analysis and judgment. WSDA will do its best to support members in this work. But remember, there is no one answer.