Below is information shared by Dr. Scott Eder of South Charleston who serves on
the ADA Council on Dental Care Program.
YOUR THIRD-PARTY PAYER CONTRACT: MOST FAVORED NATION CLAUSES
The ADA often hears from members reporting that a third party payer, with whom they participate, is requesting a sizable refund. The reason – the payer found that the doctor did not give the same discounts to the payer’s beneficiaries that he/she gave to other patients (some without a dental benefit plan).Can the payer ask for such a refund? How can payers access information on discounts provided to non-subscribers in a practice? Such situations are triggered by a very frequently used clause in the contract between a dentist and a third-party payer. It’s called a “Favored Nation Clause”.Through this clause, the dentist agrees not to charge higher fees to the patients covered under this plan than he/she would to other patients. An accompanying clause also stipulates that the dentist agrees to utilization reviews/audits by the payer and further agrees to provide de-identified information on charges to other patients in the practice. Together, these clauses allow the payer to conduct audits, seek payment records for patients not covered by the payer, compare charges and recoup monies from the practice.Ha!! Inadvertent April Fools!!The ADA has been made aware of situations when this clause has been triggered, and substantial refunds demanded, even in cases where the dentist offered a discount or “special” to attract new patients to the practice. This can also be a problem when dentists participate in multiple plans. For example, if a fee specified for a particular procedure under one plan exceeds the fee the dentist would charge a patient from another plan, the dentist is contractually bound to charge the first patient the lower fee.It’s all about the contracts!Before you sign any participating provider agreement, ADA recommends that you consult with your own attorney and consider utilizing the American Dental Association’s contract analysis service. The service provides a clear, plain language explanation of contract terms and helps dentists make independent, informed decisions on participation with dental benefit plans. This is free to members who request the service through their state dental society. Please visit ADA.org for more information on Contract Analysis Service.The ADA also offers a brief tutorial on compliance audits that can be accessed here.