Ontario Dental Association gears up for Fee Changes - Manulife

Ontario Dental Association gears up for Fee
Changes
Ontario Dental Association gears up for Fee Changes
In our Bulletin issued last August, we advised you that
the Ontario Dental Association (ODA) plans to make
some substantial changes to its fee practices over the
next five years, beginning January 1, 2002. The
Canadian Dental Association (CDA) has also made a
number of revisions to its listing of dental procedure
codes (which the provinces use to formulate their
provincial fee guides).
The ODA plans to make two major changes: one is to
unbundle its “package” codes, and the other is to
change the method used to establish fee guide
increases. However, the ODA will not be
communicating full details of these changes until later
this year. The purpose of this Bulletin, therefore, is to
pass along as much information as we have at this
time, although the full cost is not yet known.
Unbundling of “Package” Codes
The ODA introduced its preventive recall packages in
1988 to provide discounts for routine diagnostic and
preventive services - recall exams, cleaning, fluoride
treatment and oral hygiene instruction. The packages
have different pricing based on a number of factors
including baby teeth vs. permanent teeth, and whether
the package includes fluoride treatment. The resulting
saving was about 15% over the sum of these services if
billed individually.
The ODA plans to eliminate these package codes
effective January 1, 2002 and instead use separate
codes for each of the services within the package (with
no variance for baby teeth vs. permanent teeth). In a
letter to the Canadian Life & Health Insurance
Association (CLHIA) dated February 15, the ODA
indicated it intends to maintain the same discounts for
these services for 2002, so that there will be no cost
difference as a result of unbundling until at least the
end of the year. However, they have not indicated their
intentions after the end of 2002.
The ODA has stated that the intent of these changes is to
help dentists become busier by encouraging the large
portion of the population without insurance to visit their
dentists more often for routine care, (since they will be
able to select individual services such as exams, rather
than the whole package). In a survey by the Royal College
of Dental Surgeons (Ontario’s governing body for dentists),
half the dentists surveyed indicated they are not as busy as
they would like to be.
Change in Pricing Methodology
Suggested fees in the ODA fee guide are currently
established using a formula which looks at the time and
responsibility (knowledge, judgment, skill and risk)
involved in performing a particular service, as well as an
economic conversion factor (the cost to operate a dental
practice). Under the new methodology, the formula would
look at time, responsibility, cost of delivering the service,
the dentist’s income, and a factor called “elasticity of
demand” (what the market will bear, based on supply and
demand). This last factor is of particular concern to the
insurance industry since it is unknown and potentially
subjective.
Fees within the fee guide will be increased individually
(based on the particular service) rather than having one
across-the-board increase to the whole fee guide. The
intent, according to the ODA, is to increase fees on more
complex services and lower fees on simpler services, again
to encourage uninsured individuals to access these lowerpriced
services. The ODA also states that dentists are not
obliged to bill based on the fee guide and are free to charge
lower or higher fees if they choose. However, insurance
industry claims experience shows that dental office billing
systems are routinely loaded with the high-end range of the
current fee guide and little, if any, adjustment is made on
an individual patient basis. Insurers are also concerned
that as our population ages, so will the use of complex
services - and these are the services where fees will
increase as a result of the new methodology.

CDA Procedure Code Changes
The CDA has made some 400 revisions to its procedure
code list which the provincial dental associations use
to develop their fee guides (all provinces except
Quebec use the same codes in an effort to support
uniformity across the country). A large percentage of
these changes will have no effect on dental plans
because they are merely wording changes, or they
relate to procedures not normally covered by dental
plans. Of the codes that are covered by dental plans,
some new codes have been added, for example, to
support advances in dentistry and dental techniques.
Maritime Life is working with the Canadian Life &
Health Insurance Association to assess what impact
these revisions will have on dental costs.
What do these changes mean for group plans
In the meantime, for plan sponsors who wish to
proactively move to manage the impact of these changes
on their plan, there are a number of design ideas that can
be considered. Examples are:
• introducing an annual dollar maximum at the overall
dental benefit level or on major dental services only;
• increased cost-sharing with plan members (ie. coinsurance
and deductibles);
• adjusting frequency limits; or
• reimbursing at other than the current fee guide.
Plan sponsors who wish to explore these concepts should
contact their Maritime Life representative.
The insurance industry has no doubt that the effect of
these changes will be to increase dental plan costs.
While the level of those increases is not yet known,
estimates range from 15% to 20% over five years. In
addition, insurers are concerned that unbundling of the
package codes will result in considerable disruption to
patients and plan sponsors, as well as costly
adjustments and corrections, while dentists and dental
plans adjust to the new billing practices. The cost to
insurers to modify their claims systems is also
significant.
The CLHIA (of which Maritime Life is a member) has
made presentations to the ODA outlining our concerns.
The ECHCO Group (Ontario’s Employer Committee on
Health Care) and the Canadian Auto Workers have
made similar presentations and in fact, all three of
these groups have been working together to deliver a
strong and consistent message to the ODA. We have
indicated that we are not opposed to reasonable
increases in the fee guide if they result in added value
to patients and dental plans. We have advised that we
are willing to work cooperatively with the ODA to find
an appropriate compromise. However, we have also
indicated that the industry will be looking at
alternative options if we are unable to reach a solution
which protects our clients from unduly high increases
in dental plan costs.