Governor Murphy Signs Legislation Restricting Sale or Lease of Dental Provider Contracts

Delta Dental of New Jersey Proud to Never Lease or Sell Network of Dentists

Assemblywoman BettyLou DeCroce

PARSIPPANY — Delta Dental of New Jersey, the state’s largest dental benefits provider, has announced passage of legislative bill S2507, which restricts the sale or lease of access to dental provider network contracts, which is sometimes referred to as creating “Silent PPOs.”

“Delta Dental of New Jersey is proud that we directly contract with all our participating dentists and have never leased our network of dentists from another company,” said Dr. Keith Libou, Chief Clinical Officer for Delta Dental of New Jersey and Delta Dental of Connecticut. “Most major dental insurance carriers in New Jersey patch together their network of dentists by “leasing” access to the networks of other companies. This important legislation will minimize confusion for both dentists and patients and ensure that contracts and costs for services are clear, transparent, and fair.”

Network leasing is a practice whereby a Preferred Provider Organization (PPO) rents (leases) its dental network from other carriers. As a result, the rented PPO’s in-network dentists are now considered in-network for the PPOs of the carrier that holds the lease agreement. The dentist must unknowingly accept that network’s patients and terms without having agreed to them. The patient does not become aware of this until they submit a claim and receive an Explanation of Benefits and may see higher-than-expected out-of-pocket costs. The practice, while beneficial to carriers, can result in unexpected costs for patients, network instability and confusion, and lost business for dental care providers. The New Jersey Dental Association and the American Dental Association has described this trade practice as unfair and unjust.

A key provision under the new law is that dentists now need to be explicitly informed of network leasing agreements by insurers. This provides dentists with an informed opportunity to refuse to sign a contract – or to opt out of an existing contract – giving them more control over the networks in which they participate. Previously, dentists typically did not have a say in their involvement within a lease arrangement when they contracted with a carrier that leased its networks from another entity.

“We applaud Assemblywoman BettyLou DeCroce and Assemblyman Joe Danielsen for sponsoring this bill, and Governor Murphy for signing it,” said Jeff Furbish, Chief Sales Officer for Delta Dental of New Jersey and Delta Dental of Connecticut. “This legislation will enhance transparency and peace of mind for countless New Jersey dentists and patients, regardless of their dental carrier.”

Silent PPO legislation has been addressed throughout the country. New Jersey is now the 16th state to regulate or prohibit the practice. Every state has based their legislation on the same set of facts: credentialing standards of the leased dentists, quality issues, and confusion regarding coinsurance and copays.

Delta Dental of New Jersey suggests that policyholders ask their dental insurer if their network of dentists is leased and sold.  

Offering dental benefits since 1969, Delta Dental of New Jersey’s mission is to promote oral health to the greatest number of people by providing accessible dental benefit programs of the highest quality, service, and value. We are a not-for-profit service corporation and, as a member of Delta Dental Plans Association, we’re part of a network that provides national dental coverage to more than 73 million people. For more information click here.

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