Preparation for 2017 Legislative Session (Updated 1/17/17)
LDA's Council on Government Affairs sent the following resolution to the LDA Board of Directors who also supported it unanimously:
RESOLVED, to support a recommendation to the LDA Board of Directors to direct the LDA lobbying team to pursue amending current law to require insurance companies to include information on the front of ID cards issued to plan participants that notes whether that plan has an ERISA exemption [i.e., is self-insured] or is fully insured.
For a variety of reasons, many large employers desiring to offer health insurance benefits to their employees opt to self-insure. All this really means is that the employer assumes primary financial responsibility for the payment of claims. There is almost always an insurance company that actually administers the benefits (adjudicates claims, pays claims, collects premium, issues ID cards, etc.). The main practical difference between “self-insured” and a fully insured plan (what you might consider the “traditional” insurance model) is that in a self-insured plan, if the total amount of claims exceeds the amount of premium, it is the employer, not the insurance company, that has to fund the account from which those claims are paid. Conversely, excess premium can remain in the employer’s claims reserve account to guard against future large claims and/or mitigate the rate at which premiums increase. In a fully insured plan, the insurance company bears the risk of having to fund payments for claims that exceed the total premium collected, but they get to keep the difference as profit when premium collected exceeds claims paid.
For many large employers, the potential risk of self-insuring is pretty minimal compared to the many advantages. (Most employers buy “re-insurance” that relieves the employer of any REALLY big liabilities.) However, it could be challenging for very large employers operating in multiple states to offer comparable coverage to all their employees AND remain compliant with the widely varying insurance laws in all the states in which they operate.
So, we have ERISA, which stands for The Employee Retirement Income Security Act of 1974. It is federal law that establishes minimum standards for retirement (pension plans), health, and other welfare benefit plans and is applicable to mostly large private employers. Among other things, ERISA regulates many of the aspects of self-insured health benefit plans that historically were regulated by states. In other words, ERISA pre-empts many state insurance laws such that they don’t apply to self-insured health benefit plans. This includes such laws as Louisiana’s dental Freedom of Choice law (requires insurer to pay the same benefits out of network as in-network), state-mandated benefits and Any Willing Provider laws. It is important to note that, while the intent of this may have been to relieve very large employers from having to comply with different laws in multiple states to offer coverage to their employees, ERISA applies to all self-insured plans, even if they operate only in one state.
Because self-insured plans (a.k.a. ERISA plans) are almost always administered by insurance companies (e.g., Blue Cross, United, etc.), the difference between a fully-insured plan and a self-insured plan is rarely evident to anyone outside of insurance company executives and the benefits department of the self-insuring employers. For example, the benefits of a self-insured plan administered by Blue Cross/Blue Shield (BCBS) will likely be virtually identical to those of one or more fully insured BCBS plans. The ID cards for each type of plan will be indistinguishable in most respects, as will the premium invoices, EOBs, etc. So, how would this affect a dentist?
Consider this scenario: A dentist who is not a contracted provider files a claim with United after treating a covered patient. United reimburses the dentist less than the in-network rate, or even declines to pay any benefit because he/she is out-of-network. The dentist, being familiar with the Freedom of Choice law, calls United to complain and gets nowhere. The CSRs for United with whom he/she speaks all just say that THIS plan doesn’t pay in-network rates to out-of-network providers and can’t offer any details or explanations (even THEY don’t know whether the plan is fully insured or self-insured). The dentist makes several more calls trying to get paid what he believes he is owed and gets nowhere. The dentist finally calls the LDA. We inform the dentist that the plan COULD be self-insured and have an ERISA exemption from the Freedom of Choice law, but the only way to find out is likely going to be to file a complaint with the Department of Insurance. The Department will not know immediately if the plan is self-insured but will find out early in the process of pursuing the complaint. But, “early” might easily mean a couple of weeks. So, that’s another couple of weeks the dentist has to wait and in the end, he/she probably learns the plan is self-insured and exempt under ERISA, so there is nothing he/she can do to get money from United.
Now consider the same scenario, except that the patient’s ID card makes it easy to determine that the plan is self-insured. Before even beginning treatment, the dentist’s staff, knowing the plan is self-insured, can confirm the actual benefits with the plan, and arrange to bill the patient for the appropriate balance. Or, consider if it’s clear from the card that the plan is fully insured, yet United STILL doesn’t reimburse at in-network rates when the claim is paid. The dentist will know from the moment he/she receives a check for a lower than expected amount that he/she has a valid complaint. And, with support from the LDA, the dentist should be able to get a fairly quick resolution to his issue. If that means taking the complaint to the Department of Insurance, they will also know immediately that there is no ERISA pre-emption to consider, which should speed things up quite a bit.
This relatively simple legislation could have a substantial positive impact for many LDA members, for the LDA itself and even the Department of Insurance (fewer complaints they have to pursue that in the end will go nowhere).
The Year in Review: Advocacy Report for 2016
Ward Blackwell, M.J., Executive Director, LDA (12/19/16)
The advocacy that LDA does on behalf of Louisiana dentists seems to grow in both quantity and importance every year. In 2015, LDA was so successful in meeting this challenge that the ADA recognized our efforts with a Golden Apple Award for Legislative Achievement. (The award was actually presented this year.)
The amount accomplished in 2016 may even eclipse that of 2015. Consider that all this took place in 2016:
Sales Tax Exemptions (Acts 25 and 26 of Special Session) – A massive budget shortfall loomed as the Edwards administration took office in Fall 2015, and it was quickly decided the only way to get sufficient revenue into the State’s coffers before the fiscal year ended June 30, 2016, was to increase sales tax collections. This was accomplished mainly by temporarily eliminating virtually all exemptions from sales taxes, including the exemption for dental devices. Subsequently, two entities were created to review Louisiana’s tax structure: the Sales Tax Streamlining and Modernization Commission and the Task Force on Structural Changes in Budget and Tax Policy. LDA testified for reinstatement of the exemption at the October 18, 2016, meeting of the Commission, and the commission subsequently voted to recommend restoring a number of sales tax exemptions on medical-related products, including the dental device exemption. This recommendation will be forwarded to the 2017 Legislature.
Reduction in Security to Appeal LA State Board of Dentistry (LSBD) decisions (Act 369) – this reform worked out between the LSBD and LDA removes a significant hurdle for dentists wishing to appeal an LSBD decision in district court.
Limits on Recoupment for Clerical Errors on Medicaid Claims (Act 467) – Thanks to a law the LDA helped pass two years ago, if the only discrepancy found on a claim in a RAC (Recovery Audit Contractor) audit is purely clerical, recoupment is limited to any overpayment above what WOULD have been paid had the claim been filed without the clerical error. The LDA successfully passed a bill this year to ensure a similar provision applies for SURS (Survey Utilization Review System) audits (“legacy” Medicaid audits).
Insurance Coverage for TMD (Act 405) –This new law requires large group health insurance plans to provide coverage for TMD in the same manner as for any other bone/joint disorder. Since most plans had already filed rates for 2017 by the time this bill was considered, the effective date is not till 1/1/18.
Medicaid Transformation Plan (HCR 108) – This resolution created a task force that will make recommendations to the Louisiana Department of Health (LDH) on how best to design an improved system for Medicaid that will optimize the delivery of care following the Medicaid expansion. LDA was be able to appoint one member of the task force.
Medicaid Co-Pays (multiple bills) – Several (mostly new) legislators thought they’d save the State money by charging Medicaid patients a small co-pay each time they receive care and reducing providers’ reimbursement by the same amount. However, co-pays are really provider rate cuts since federal law makes it impossible for providers to actually collect the co-pay. None of these bills passed.
Prohibition on Balance Billing by Out-of-Network Providers in ERs OR Other In-Network facilities (multiple bills) – This is an issue that comes up every year. As usual, it went nowhere.
Increase Malpractice Cap for Traumatic Brain Injuries (SB 78) – filed by a legislator whose daughter suffered such an injury. A sad story, but not a bill anyone could get behind. It died in committee.
Venue for Administrative Hearings (SB 239) – Another bill that SOUNDED good; it would have forced licensing boards to hold administrative hearings in the home parish of the licensee who is the subject of the hearing. Problem is that the logistical burden placed on such boards would be extreme, leading to (among other adverse effects) much higher costs (and higher licensing fees) and some wrongdoers getting off simply because their board didn’t have the capacity to do all the traveling. Killed.
Medicaid Provider Fees (multiple bills) –The fees charged would be used to draw down additional federal matching dollars, which could then be used to help fill the Medicaid budget hole. Some of the money would be used to increase provider reimbursements too. Unfortunately, the increase would likely not be enough to offset the fee, and there were many issues of how to apply the fee for provider types (like dentists) that don’t universally accept Medicaid. None of these bills passed either.
MEDICAID (Funding, MCNA)
There may be an alternative to provider fees as a way to draw down more federal matching funds to enhance dental Medicaid reimbursements. LDA is partnering with LDH and the LSU School of Dentistry (LSUSD) on an arrangement that would have LSUSD cooperate with LDH to generate the state match for the federal funds while dentists who accept Medicaid and want to receive additional remuneration “affiliate” with the dental school. This will require the Centers for Medicaid and Medicare Services (CMS) to approve a State Plan Amendment submitted by LDH. A decision from CMS is expected by spring 2017.
LDA also conducted a survey of its members this year regarding Medicaid. The results, which were shared with LDH and MCNA (the Medicaid benefits administrator contracted by LDH) showed Medicaid dentists have a generally unfavorable opinion of MCNA, with specific, recurring complaints including:
MCNA representatives have given assurances that they would do their best to address all these issues. LDH is now sending a representative to MCNA’s quarterly advisory committee meetings to ensure they follow through.
As has been reported previously, the LDA and LSBD formed a joint task force in 2014. The purpose of the task force has been to provide a small group forum for resolving differences between the two entities on various issues. The task force, LDA Council on Governmental Affairs and yet another LDA task force recently created to address issues specifically relating to general supervision in nursing homes, have collectively had a hand in the following regulatory changes that will soon (2017) be effective:
It should be noted that there were some proposed rule changes that the LDA opposed and the LSBD has agreed NOT to pursue, such as:
While available space in the Journal limits the details I can share, the LDA has also continued to represent dentistry at meetings of several other governmental bodies (e.g. PCF Board, LA Health Care Commission, PMP Advisory Council). Obviously, 2016 was both a busy year and a very good one when it came to advocating for LA dentists!
Louisiana’s Regular Legislative Session Comes to an End
Dr. Marty Garrett, Chair, Council on Government Affairs and Ward Blackwell, M.J., Executive Director, LDA
|Governor John Bel Edwards has signed SB476 (TMD bill). Also in attendance were Senator Danny Martiny, LDA Executive Director Ward Blackwell, and LSUSD Dean Henry Gremillion. Ensuring that insurance coverage is the same for ALL musculoskeletal disorders was LONG overdue. The law shall apply to new policies, plans, certificates, and contracts issued on or after January 1, 2018. Existing policies, plans, certificates, and contracts not exempted from the mandate shall include the coverage required by this law on renewal thereof, but in no case later than January 1, 2019.|
Louisiana legislators who were unable to come to an agreement on the state’s construction budget during the 2016 regular session came back into session 30 minutes after the regular session ended to begin another special session to focus on taxes and stave off more budget cuts.
As usual, the last few days of the session involved rapid changes, plenty of intrigue and most all lawmakers were unhappy about SOMETHING in the budget. Other than budget woes plaguing our state, as well as higher education and health care, the LDA itself had a successful legislative session. Special thanks to those LDA members who responded to our calls-to-action or requests to contact their legislators over the phone or in their offices.
Here’s a recap of the major issues:
Reduction in Security to Appeal LSBD decisions (HB934) – this reform worked out between the LSBD and LDA removes a significant hurdle for dentists wishing to appeal an LSBD decision in district court. The bill has been signed by the governor and is effective 8-1-16.
Limits on Recoupment for Clerical Errors on Medicaid Claims (HB 1157) – Thanks to a law the LDA helped pass two years ago, if the only discrepancy found on a claim in a RAC (Recovery Audit Contractor) audit is purely clerical, recoupment is limited to any overpayment above what WOULD have been paid had the claim been filed without the clerical error. The LDA introduced this bill this year to ensure a similar provision applies for SURS (Survey Utilization Review System) audits. The bill has been signed by the governor and is effective 8-1-16.
LSBD Relocation (SB 471) – the LDA supports the LSBD remaining in the New Orleans area, but has gone along with this bill that delays until January 1, 2018, the statutory requirement for the board to move to Baton Rouge. LDA accepted this bill based on assurance from the author that he will repeal the move requirement entirely next year. The bill has been signed by the governor and is effective 1-1-18.
Insurance Coverage for TMD (SB 476) – PASSED thanks to the efforts of Dr. Terry Billings, Dean Henry Gremillion, Chris Vidrine and LDA contract lobbyists Johnny Koch, Cary Koch and Scott Kirkpatrick! This bill requires large group health insurance plans to provide coverage for TMD in the same manner as for any other bone/joint disorder. (Note: had the mandate also applied to Office of Group Benefits, small groups and/or individuals, the State would have been required to pick up the cost. The bill could not have passed in that form given the State’s fiscal situation.) The bill has been signed by the governor, but since most plans have already filed rates for 2017 that would not have included actuarial projections for this new benefit, the effective date is not till 1-1-18.
Medicaid Transformation Plan (HCR 108) – This resolution would create a task force that would make recommendations to DHH on how best to design an improved system for Medicaid that will optimize the delivery of care following the Medicaid expansion. LDA will be able to appoint one member of the task force. The bill has been signed by the governor and is effective 6-6-16.
LDA’S LOBBYING TEAM ALSO WORKED AGAINST:
Medicaid Co-Pays (multiple bills) – It seems like a great idea: charge Medicaid patients a small co-pay each time they receive care and reduce the amount paid out to providers by the same amount. The State saves money and the increased patient accountability may improve patient behavior in this notoriously difficult to manage population. The only problem is that federal law would make it impossible for providers to actually collect the co-pay. So, co-pays are in essence provider rate cuts. None of these bills made it out of committee.
Medicaid Provider Fees (multiple bills) – Another effort to save the State some money. The fees charged would be used to draw down additional federal matching dollars, which could then be used to help fill the Medicaid budget hole. Some of the money would be used to increase provider reimbursements too. Unfortunately, the increase would likely not be enough to offset the fee. And, there were many issues of how to apply the fee for provider types (like dentists) that don’t universally accept Medicaid. None of these bills made it out of committee.
Prohibition on Balance Billing by Out-of-Network Providers in ERs OR In-Network facilities (multiple bills) – This is an issue that comes up every year. And like every year previously, none of these bills went anywhere.
Increase Malpractice Cap for Traumatic Brain Injuries (SB 78) – filed by a legislator whose daughter suffered such an injury. A sad story, but not a bill anyone could get behind. It died in committee.
Venue for Administrative Hearings (SB 239) – Another bill that SOUNDED good; it would have forced licensing boards to hold administrative hearings in the home parish of the licensee who is the subject of the hearing. Problem is that the logistical burden placed on such boards would be extreme, leading to (among other adverse effects) much higher costs (and higher licensing fees) and some wrongdoers getting off simply because their board didn’t have the capacity to do all the traveling. This bill died in committee.
Special Session Report: Dental School Funding and Temporary Sales Taxes (3/22/16)
Ward Blackwell, M.J., Executive Director, LDA
NOTE: The changes in tax law described below affect state sales taxes that dentists have previously have not had to pay, but will be paying in varying amounts for a very limited period of time. Dentists are not required to COLLECT sales taxes, and that has NOT changed. See below for details.
For the many in Louisiana who might have hoped that the recently concluded special session of the legislature would have featured a thoughtful examination and restructuring of the State’s taxation and budgeting, what actually took place had to be disappointing. A confusing, intrigue-filled standoff between the House and Senate (which for the most part, supported the governor) finally culminated in a rush to put a Band-Aid on the problem with temporary sales tax measures hurriedly passed as the session wound down. And, hurriedly is no exaggeration: more than $1 billion in taxes were finally passed within the final 10 minutes of the session.
The scramble at the end of the session left virtually everyone, including the LDA, trying to figure out what had actually passed. As the dust has settled, it’s become clear that there really were no winners; it’s just a matter of how badly certain interests lost.
The LDA had tried to strike a delicate balance throughout the session. On the one hand, LDA sought to protect the LSU School of Dentistry (LSUSD) from further cuts that could have been devastating. The worst-case scenario would have involved entirely shutting down the dental hygiene and dental lab tech programs. On the other hand, the LDA sought to protect the sales tax exemption dentists enjoy on many devices, materials and supplies that they purchase for their practices. After all, it was clear going into the session that increasing revenue would be part of the solution for eliminating the current budget year shortfall. And, it was equally clear that increasing sales tax revenue was the legislature’s most politically viable means of increasing revenue in the short amount of time before the current budget year ends on June 30.
This put the LDA in a very challenging lobbying position to say the least. Any urging during the special session to avoid further cuts to LSUSD was essentially lobbying for expanding the sales tax. Advocating that any sales tax increases should not affect dentistry could be interpreted as saying “we care about the dental school, but not so much that we’re willing to pay even a LITTLE bit more for it.” So, for most of the session, the LDA worked quietly with the LSU folks to get votes for select revenue-raising legislation and educated just a few trusted legislators in key positions about the need to minimize any exceptions to the sales tax exemption on dental devices. (The one exception to the LDA’s “stealth” strategy was lobbying successfully for increased taxes on tobacco, as the LDA House of Delegates long ago adopted a policy that still stands of supporting such taxes as a health issue. But it didn’t raise NEARLY enough revenue to eliminate the push for increased sales taxes.)
As the session ended, it appeared at first that the balance had been struck pretty much as the LDA wanted. Most capitol insiders thought that the combination of additional cuts, more “found” money and new taxes had eliminated all but about $30 million of the projected shortfall for the current budget year and reduced next year’s shortfall from $2 billion to roughly $800 million. That should have been good enough to ensure no devastating cuts to health care or higher education for now, with an opportunity to come back for a second special session in June to finish fixing the budget for next year. And, up until the last hour of the session, the worst that had happened with sales taxes is that dentists would have at most had to temporarily pay a new one percent sales tax on the devices and supplies that had previously been tax-exempt.
But fiscal analysts at the capitol began hinting within hours of the session’s close that the $30 million gap was actually larger. Estimates kept climbing until a full week after the session when the Revenue Estimating Conference set the official shortfall figure for this year at $70 million. (The official figure for next year is a $750 million shortfall.)
Likewise, amendments that were passed before the LDA ever saw them (indeed, before most legislators had actually read them) changed the sales tax situation substantially. It took LDA staff and lobbyists several days after the session ended to finish analyzing all the new language in the sales tax bills as they had finally passed. In the end, dentistry has joined a LONG list of business, industry, health care and non-profit interests – basically, everything but agriculture and items protected in the state constitution – who saw their state sales tax exemptions temporarily suspended.
Here is a summary of the special session’s impact on dentistry:
LSUSD Funding – The exact impact of the cuts that the dental school will face is still yet to be determined. While the consensus at the close of the session was that higher education would be spared any truly disastrous cuts in this fiscal year, the revised shortfall estimate makes that somewhat uncertain. LSUSD Dean Henry Gremillion has indicated that the school will probably be able to limp through the rest of this fiscal year without major issues, but the coming year is a giant unknown. He may know more soon, and will brief the attendees at Dentists Day at the Legislature next week (March 30). All LDA members are strongly encouraged to come to Dentists’ Day and take the LSUSD message directly to their senators and representatives. (For details, go to http://www.ladental.org/lda/ce-and-events/lda-eventsregistration/dentists-day-at-the-legislature.)
Sales Taxes – For a few more days, dental materials that stay in the patient’s mouth and most one-time use items utilized for treating patients will continue to be exempt from all sales taxes. But beginning April 1, 2016, those items will be subject to 5% of state sales tax for a three-month period (through July 1, 2016). And, for two years after that, those items will be subject to a 3% sales tax. On the plus side, those items will continue to be exempt from all local sales taxes.
One caveat to the sales tax situation: the language in the bill that created the new additional one percent sales tax is unclear, and it COULD be interpreted as not applying to items covered by the dental device exemption. The LDA is seeking guidance on this from the Louisiana Department of Revenue (LDR). Even though the odds don’t exactly favor the law being interpreted as we’d hope, LDA members will be informed immediately when we get a definitive response from LDR.
Franchise tax – Beginning in 2017, it is possible that a few large dental practices MIGHT be affected by Act. No. 12, which expanded franchise tax liability to include some LLCs. However, any LLC that can qualify to make election to be taxed as an S Corp for federal income tax purposes would remain exempt from franchise tax. The S Corp eligibility exemption is expected to apply to virtually all the dental practices set up as LLCs. If your practice is an LLC, you may wish to consult with your CPA, just to be sure.
Patients' Compensation Fund (PCF) Reduction in Surcharge (9/3/15)
At its July meeting, the Patients' Compensation Fund (PCF) voted on an 11.3% reduction for dentists in the PCF surcharge.
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