the representative and recognized resource of the dental benefits industry

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1 OFFICERS & DIRECTORS Chairman JOHN P. FOLEY Guardian Life Insurance Co. New York, New York Vice Chair GENE SHERMAN, DMD Starmount Life Insurance Company Baton Rouge, Louisiana Secretary / Treasurer BRUCE HENTSCHEL Principal Life Insurance Company Des Moines, Iowa GAIL M. GARCIA CIGNA Dental and Vision Care Plantation, Florida KAREN GUSTIN, LLIF Ameritas Life Insurance Co. Lincoln, Nebraska JEANNE HENSEL HumanaDental Insurance Co. Green Bay, Wisconsin RON INGE, DDS Washington Dental Services Seattle, Washington BRENT WILLIAMS Dental Select Draper, Utah DOYLE WILLIAMS, DMD DentaQuest Boston, Massachusetts November 9, 2006 Elena Fishman, Staff Counsel California Department of Insurance 300 Capital Mall, 17 th Floor Sacramento, CA Re: Comments on DOI 2 nd draft of LAP Pending Regulations Dear Ms. Fishman; The National Association of Dental Plans ( NADP ) is the largest non-profit trade association representing the dental benefits industry in the United States. Our members include major commercial carriers; national, regional and single state companies; as well as Delta Dental and Blue Cross Blue Shield plans offering all lines of dental benefits. NADP has 37 member plans that offer some type of dental benefits in California; specifically 24 NADP plans have PPOs and Indemnity type products that will be directly impacted by pending CA DOI regulations. In our letter of September 26, 2006, NADP explained how our dental plan members strive to help their enrollees understand their benefits and receive good dental care. This effort has been commonplace across the industry and will continue as a routine practice. Also in that correspondence, NADP estimated the average industry cost of these regulations at 1 to 1.8 million dollars per plan a cost that would ultimately be catastrophic for our dental and vision plans, and decrease consumers choice because it will negatively impact the number of specialized plans offering affordable dental and vision coverage in California. These additional costs are enormous when considering the standard monthly cost for a PPO/Indemnity dental plan averages only $30. In regards to the second draft, NADP would like to take this opportunity to provide our concerns on specific language, and suggest alternative verbiage so that the regulations are more appropriate and relevant to the operations of dental plans and the specialized industry as a whole. We ve listed our 8 recommendations in Attachment A for your review. They appear in the same order as the text of the regulations. I would like to thank you for keeping the regulatory process extremely streamlined and fair, and appreciate the time and energy that has gone towards developing these complex regulations. NADP looks forward to additional Executive Director EVELYN F. IRELAND, CAE National Association of Dental Plans LBJ Freeway Suite 935 Dallas, Texas Ph Fax

2 conversations with the Department of Insurance to ensure a better understanding of our industry for proper compliance. Please contact us with any questions or concerns you may have with regards to our following recommendations. Sincerely, Kris Hathaway Director of Government Relations National Association of Dental Plans Dallas, Texas Ph x 111 khathaway@nadp.org 2

3 Attachment A: Recommendation 1 Section Definitions: (a) NADP would suggest deleting race and ethnicity from the Demographic profile definition for several reasons: The gathering of this information is not required by the statute, and would add an enormous cost burden as companies would have to make IT adjustments by adding questions, data fields and other system requirements necessary to capture such information for so many millions of Californians. Enrollees could view race and ethnicity questions as an intrusion of their privacy, especially if it appears on their enrollment forms, which will become a survey instrument that many companies will likely utilize. The regulations only require this information to be utilized within the needs assessment every three years, and for no other purpose. For the cost involved and lack of utilization, the collection of this information seems completely unnecessary. There is no apparent benefit by including race and ethnicity during the LEP assessment. The statute s clear intent was to address language barriers in the health care field; not to gather information above and beyond the preferred language of an LEP insured. Suggested Language: Demographic profile means, at a minimum, primary/preferred spoken and written language of the insured., race and ethnicity. Recommendation 2 Section Definitions, Vital Documents (e) NADP would recommend altering the definition of Vital Documents so that health insurers have a complete understanding of the specific documents that are expected to be translated. This is crucial for the planning and approval process as well as budgetary concerns, as plans strives to correctly implement their language assistance programs. Suggested Language: Vital Documents includes but is not limited to the following documents when produced by the health insurer Recommendation 3 Section Definitions, Vital Documents (e)(7): A matrix of the categories of health insurance benefits outlines in the insurance contract including co-payments and coinsurance, exclusions and limitations in the following sequence: deductibles, lifetime maximums, professional services, outpatient services; hospitalization services; diagnostic and therapeutic radiological services; preventive health services emergency health care coverage including ambulance services; prescription drug coverage; durable medical equipment; mental health services; chemical dependency services; home health service; other services.

4 We recommend the deletion of this new item, as a matrix is not included in the authorizing statute. Further, there are distinct concerns regarding how this will be applicable to specialized plans for several reasons: Dental plans do not currently submit a matrix type document to the Department of Insurance. Many specialized plans would need to craft this paper as an entirely new document just to abide by this specific regulation. It is not considered a vital document within the dental benefits industry. The matrix as defined, seems to go directly against what is stated in the statute in Section 2, (b)(1)(b)(vi) Translated documents shall not include a health care service plan s explanation of benefits or similar claim processing information that is sent to enrollees, unless the document requires a response by the enrollee. We would note that the statute dictates the definition of vital documents and clearly states that it shall not exceed the federal CLAS standards, which does not include such a matrix. Recommendation 4 Section Language Assistance Program (c) NADP would recommend deleting, or in the alternative, changing the new addition of including a Commissioner s notice to enrollees, by way of an insurer s mailing, for several reasons: There is no statutory authority behind this request. The majority of specialized plans do not send out mailings on an annual basis. To mandate a separate mailing on an annual basis would increase the cost of this already expensive regulation. These costly mailings are duplicative, as health insurers are required to do the same notice to their enrollees, leading to redundancy and no additional consumer protection. In the same section, the regulations state; Health insurers shall develop a written notice that discloses the availability of language assistance services to insureds and explain how to access those services. Suggested Language: The Commissioner may develop a notice advising LEP insureds of the availability of language assistance services and how to access those services. Health insurers shall provide the notice developed by the Commissioner to their LEP insureds either electronically on their website or included in LAP related mailings to the LEP insureds. on an annual basis. Recommendation 5 Section Language Assistance Program (d) Section Health Insurer Monitoring Evaluation & Reporting (a) The inclusion of networks in the above sections needs to be removed from the regulation as it was not the legislative intent of the statute. NADP advocates the comments as submitted by the Association of California Life & Health Insurers regarding this issue, as they point out several key statutory concerns, including: The statute reflects that managed care products operate differently than PPO type plans, and did not include these types of contracts, as they are unenforceable by the insurer. 4

5 LEP insureds can utilize in and out of network providers in PPO/Indemnity products, implementing LAP procedures through the providers are virtually impossible. NADP is especially concerned regarding this new language as networks are a key component to the dental benefits industry; by requiring that all individual contracts be reviewed and amended could potentially make diminishing dental networks unworkable in California, especially in rural areas. Recommendation 6 Section Needs Assessment of Insured Population (a) NADP would recommend including the language below regarding language assessments to increase the methodology choices for health insurers. The suggested underlined language came directly from the CA DMHC (c)(1)(g) pending LAP regulations. Flexibility is the core of allowing health insurers to work appropriately within each plan design. Suggested Language: Health insurers may utilize a variety of methods, including census data, client utilization data from third parties, data from community agencies, third party enrollment processes, and statistically valid methods for population analysis. Health insurers may also make use of survey methods, including, but not limited to, the use of existing enrollment and renewal processes, newsletters, or other mailings Recommendation 7 Section Individual Access to Oral Interpretation Services (c) NADP would recommend the deletion of (c) in its entirety, as it discourages the use of family members as interpreters. This issue has been heavily debated in the California legislature, and until this issue is resolved in the legislature, regulatory agencies should not write law that has not been authorized by the legislature. The DMHC also had similar language that was stricken from their latest draft, as there was not any statutory language regarding this issue. NADP agrees that LEP insureds should always be told that they have the opportunity to receive oral interpretation, but to strongly discourage a family member to be involved if there is a language barrier could send mixed and confusing messages to the LEP insured. Recommendation 8 Section Department of Insurance Reporting NADP would recommend the delay of the DOIs report to the Legislature to allow additional time needed for completion of the LAP by health insurers. Even though the statute lists January 1, 2008 as the due date, in the same section SEC.4, Section (f), it reads; The commissioner may also delay or otherwise phase in implementation of the standards and requirements in recognition of the costs 5

6 The date, 1/1/2009 would correlate with the DMHC deadlines, making it easier for health insurers that also operate Knox-Keene licensed plans, to implement their LAP programs within the same time frame. Aligning the effective dates for health insurers and Knox-Keene licensed plans will reduce confusion for consumers, employers who offer both types of plans to their employees, and providers who contract with insurers and health plans. Suggested Language: Beginning on January1, 20098, the Department shall report biennially to the Legislature regarding health insurer compliance... 6