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STATE OF NEW YORK
INSURANCE DEPARTMENT
25 BEAVER STREET
NEW YORK, NEW YORK 10004

David A. Paterson
Governor

James J. Wrynn
Superintendent

OGC Op. No. 10-09-14

The Office of General Counsel issued the following opinion on September 30, 2010 representing the position of the New York State Insurance Department.

Re: Reporting of Fees on Dental Benefit Plan Claim Forms

Questions Presented:

1. Does the term “full fee” on a patient’s dental plan claim form refer to the fee that a dentist actually charges a patient for the specific treatment received based on the amount that the dentist agrees to accept from an insurer as a participating provider, or does the term refer to the fee that a dentist would normally charge a patient for that particular service absent the allowance of a discount or filing of a claim with the patient’s insurer?

2. Is the meaning of the term “full fee” the same if the dentist is a non-participating provider with the insurer?

Conclusions:

1. Nothing in the Insurance Law or regulations promulgated thereunder specifically addresses the definition of the term “full fee” when used on health insurance claim forms. If a dentist is a participating provider with a health plan, the dentist must comply with the terms of the contract with that health plan regarding fees.

2. If the dentist is a non-participating provider, the dentist must report the fee that he or she actually charges the patient for the particular service. If the dentist waives the co-pay but does not inform the insurer of that waiver when the dentist submits the claim, the dentist may be committing insurance fraud under New York Penal Law § 176.05 (McKinney 2010).

Facts:

The inquirer is the president of ABC Association (“ABC”), and requests an opinion from the Insurance Department’s Office of General Counsel (“OGC”) as to the meaning of a term included in the “Record of Services Provided” section of the XYZ Association (“XYZ”) Dental Claim form. In particular, the inquirer states that XYZ’s instructions with respect to the fee section state, “31. Fee: Report the dentist’s full fee for the procedure,” and the inquirer requests clarification as to the meaning of the term “full fee.”

Specifically, the inquirer asks whether “full fee” means (a) the fee that the dentist actually charges a patient for a particular treatment based on the amount that the dentist knows he or she will collect from the insurer based on an agreed upon fee schedule, or (b) the fee that a dentist ordinarily would charge for a particular treatment absent any discount or insurance claim being filed. The inquirer further asks whether a dentist may use his discretion in reporting the fee in scenarios (a) or (b) when filing a claim.

During a conference call with OGC regarding the inquiry, the inquirer also asked what fee a dentist should report on a claim form when the patient has both primary and secondary insurance.

Analysis:

The New York Insurance Law and regulations promulgated thereunder do not define or use the term “full fee” as it pertains to dental claim forms. Accordingly, a dentist who is a participating provider must look to the terms of the contract with the insurer for guidance. With respect to a dentist or other provider that is non-participating in an insurer’s plan, the provider must report the fee that the dentist actually charges the patient for that particular treatment.

However, if the dentist or other provider discounts his or her fee, or waives the co-pay for which the patient is responsible, the provider must report the discounted fee or the co-pay waiver on the claim form being submitted to the insurer. If a provider fails to inform the insurer of the discount or waiver when the dentist submits the claim to the insurer, knowing that the insurer calculates its payment on a percentage of the provider’s usual and customary fee, the dentist may be committing insurance fraud under Penal Law § 176.05. That provision states, in relevant part, as follows:

1. A fraudulent insurance act is committed by any person who, knowingly and with intent to defraud presents, causes to be presented, or prepares with knowledge or belief that it will be presented to or by an insurer, self insurer, or purported insurer, or purported self insurer, or any agent thereof, any written statement as part of, or in support of, an application for the issuance of, or the rating of a commercial insurance policy, or certificate or evidence of self insurance for commercial insurance or commercial self insurance, or a claim for payment or other benefit pursuant to an insurance policy or self insurance program for commercial or personal insurance which he knows to: (i) contain materially false information concerning any fact material thereto; or (ii) conceal, for the purpose of misleading, information concerning any fact material thereto.

2. A fraudulent health care insurance act is committed by any person who, knowingly or with intent to defraud, presents, causes to be presented, or prepares with knowledge or belief that it will be presented to, or by, an insurer or purported insurer or self-insurer, or any agent thereof, any written statement or other physical evidence as part of, or in support of an application for the issuance of a health insurance policy, or a policy or contract or other authorization that provides or allows coverage for, membership or enrollment in, or other services of a public or private health plan, or a claim for payment, services or other benefit pursuant to such policy, contract or plan, which he knows to:

(a) contain materially false information concerning any material fact thereto. . . .

(b) conceal, for the purpose of misleading, information concerning any fact material thereto. . . .

See also OGC Opinion No. 09-06-01 (June 3, 2009) and OGC Opinion No. 08-04-04 (Apr. 2, 2008), in which the Department concluded that a provider’s failure to notify an insurer of his or her waiver of any fees for which the insured is personally responsible may constitute insurance fraud. However, if a dentist or other provider informs the insurer of the discount or waiver, the provider does not run afoul of Penal Law § 176.05. (See OGC Opinion 08-04-04 (Apr. 2, 2008).)

Finally, the reporting requirements set forth above remain the same in those instances where the patient has both primary and secondary insurance.

For further information, you may contact Senior Attorney Camielle A. Barclay at the New York City Office.