New York State Seal
STATE OF NEW YORK
INSURANCE DEPARTMENT
25 BEAVER STREET
NEW YORK, NEW YORK 10004

George E. Pataki
Governor

Gregory V. Serio
Superintendent

The Office of General Counsel issued the following opinion on March 4, 2004, representing the position of the New York State Insurance Department.

Re: Dental Indemnity Corporation, Termination of Dentist

Issue:

Is a dentist who has contracted with a Dental Expense Indemnity Corporation entitled to the protections of New York Insurance Law § 4803 (McKinney 2000)?

Conclusion:

Yes, a dentist, as a health care professional, is entitled to the statute’s protections. There is nothing in New York Insurance Law § 4803 that would exclude Dental Expense Indemnity Corporations.

Facts:

A Dental Expense Indemnity Corporation ("Corp. A") is licensed by the Department in accordance with New York Insurance Law § 4302 (McKinney 2000). Corp. A issues a subscriber contract whereby the subscriber has a financial incentive to utilize a participating provider chosen from a panel maintained by Corp. A; but the subscriber, upon payment of a larger co-payment or deductible, may also utilize the services of a non-participating provider. At present, if a provider is removed from the panel, he or she may still treat a subscriber, as a non-participating provider.

Analysis:

New York Insurance Law § 4301(c) (McKinney 2000 and 2004 Supplement) defines the scope of practice of a Dental Expense Indemnity Corporation:

Dental expense indemnity shall consist of reimbursement for dental care provided through licensed dentists and of furnishing necessary appliances, drugs, medicines, and supplies, prosthetic appliances, orthodontic appliances, precious metal and ceramic restorations.

New York Insurance Law § 4801(c) (McKinney 2000) defines a managed care health insurance contract:

a ‘managed care health insurance contract’ or ‘managed care product’ shall mean a contract which requires that all medical or other health care services covered under the contract, other than emergency care services, be provided by, or pursuant to a referral from, a designated health care provider chosen by the insured (i.e. a primary care gatekeeper), and that services provided pursuant to such a referral be rendered by a health care provider participating in the insurer's managed care provider network. In addition, in the case of (i) an individual health insurance contract, or (ii) a group health insurance contract covering no more than three hundred lives, imposing a coinsurance obligation of more than twenty-five percent upon services received outside of the insurer's provider network, and which has been sold to five or more groups, a managed care product shall also mean a contract which requires that all medical or other health care services covered under the contract, other than emergency care services, be provided by, or pursuant to a referral from, a designated health care provider chosen by the insured (i.e. a primary care gatekeeper), and that services provided pursuant to such a referral be rendered by a health care provider participating in the insurer's managed care provider network, in order for the insured to be entitled to the maximum reimbursement under the contract.

Based upon the information provided, it appears that at least some of the contracts issued by Corp. A would be encompassed within the above definition.

New York Insurance Law § 4803, which provides protection to health care professionals contracting with insurers issuing managed care health insurance contracts, provides, in pertinent part:

(b) (1) An insurer shall not terminate a contract with a health care professional for participation in the in-network benefits portion of the insurer's network for a managed care product unless the insurer provides to the health care professional a written explanation of the reasons for the proposed contract termination and an opportunity for a review or hearing as hereinafter provided. This section shall not apply in cases involving imminent harm to patient care, a determination of fraud, or a final disciplinary action by a state licensing board or other governmental agency that impairs the health care professional's ability to practice. . . .

(c) Either party to a contract for participation in the in-network benefits portion of an insurer's network for a managed care product may exercise a right of non-renewal at the expiration of the contract period set forth therein or, for a contract without a specific expiration date, on each January first occurring after the contract has been in effect for at least one year, upon sixty days notice to the other party; provided, however, that any non-renewal shall not constitute a termination for purposes of this section.

. . . .

(h) For purposes of this section, ‘health care professional’ shall mean a health care professional licensed, registered or certified pursuant to title eight of the education law.

New York Public Health Law § 4406-d, which is limited to contracts between health care professionals and Health Maintenance Organizations, has identical provisions.

Dentists in New York are licensed and regulated in accordance with New York Education Law Article 133 (McKinney 2001 and 2004 Supplement), which is encompassed within New York Education Law Title VIII.

Accordingly, dentists who contract with managed care health insurance providers to be on their panel are entitled to the protections of New York Insurance Law § 4803. Based upon the language of New York Insurance Law § 4803, there is no reason to believe that the Legislature intended not to include Dental Expense Indemnity Corporations within its strictures.

For further information you may contact Principal Attorney Alan Rachlin at the New York City Office.