Corporate board meetings, especially one attended by dentists, might not usually attract a lot of interest from the public, but a meeting scheduled for early September in Lynnwood should have the attention of the 2 million Washington state residents who get their dental insurance coverage through Washington Dental Service, also known as Delta Dental.
Dentists with the Washington State Dental Association, an affiliate of the American Dental Association, have requested the board of directors for the nonprofit coverage provider hold an election of Delta’s 4,500 member dentists regarding amendments to the nonprofit’s bylaws.
The intention, said Bracken Killpack, the WSDA’s executive director, is to ensure that Delta’s decisions are focused on patient care, that the insurance provider is more responsive to patients and dental providers and that Delta provide greater transparency into its operations and its board’s decisions.
Delta’s dentists are being asked to approve amendments to the coverage provider’s bylaws that would:
Set as policy that 94 percent of Delta’s revenue be directed to patient care, while capping administrative spending at 6 percent;
Refund to Delta’s customers any revenue over that 6 percent cap;
Require Delta work with the state Office of the Insurance Commissioner and participate on an independent review board regarding disputes between Delta and dentists regarding patient care, as other insurance providers are required to do;
Mandate that Delta’s board of directors make formal votes on all recommendations from its Member Advisory Board regarding patient care procedures, claims processing and other issues, and make the results of those votes available to Delta’s member dentists;
Make changes to who can serve and be elected to Delta’s board of directors to open up representation on the board;
Disclose its administrative expenses in detailed financial statements, including corporate contributions to its charitable foundation and spending on lobbying and advertising;
Disclose the percentage of patient claims denied and what percentage of denied claims are reviewed by a licensed dentist; and
Make Delta’s corporate records and board meeting minutes available to member dentists.
This isn’t, Killpack said, about increasing reimbursement rates for dentists. No such provision is suggested in the petitions to Delta’s board and would likely draw the attention of antitrust regulators if it were, he said.
The suggested bylaw changes are instead prompted by a steady rise in the nonprofit’s reserve funds and continuing frustration among dentists and patients with denial of claims and procedures and delays in care, said Dr. Marissa Bender, a Lynnwood dentist and past president of the Snohomish County Dental Association.
Bender has had to write off charges for some of her patients because Delta either required a delay in a procedure that she felt was not in a patient’s interest or because a pre-authorized procedure was later denied coverage by Delta.
There’s concern, Killpack said, that some decisions on whether a procedure will be covered are made by computer algorithms rather than by humans with knowledge of patient care.
At the same time, Bender and Killpack believe, there’s been a jump in what Delta spends on administrative expenses. According to figures compiled by the WSDA, between 2009 and 2014, administrative expenses ranged from a high of $76 million in 2011 to a low of $66 million in 2013. Those costs increased to $84 million in 2015, about 7.3 percent of its revenue of $1.15 billion that year. During that same period its reserves have risen from $145 million in 2009 to $239 million in 2015.
Administrative expenses are not likely to decline with Delta’s recent lease of prime office space in Seattle’s Lake Union neighborhood and its planned move from its current offices in Northgate. In February, according to the Puget Sound Business Journal, it signed a lease for 61,000 square feet at a 14-story building at 400 Fairview Avenue N., a neighborhood that is home to Amazon, the Allen Institute, UW Medicine and the Seattle Cancer Care Alliance.
The WSDA is basing its suggested 6 percent cap for administrative expenses on a 2011 letter from Delta’s board of directors to dental providers that announced a reduction in fees paid to providers. At the time, Delta said it had reduced administrative costs to six cents of every premium dollar, and to keep premiums affordable, it had to reduce payments to providers.
Current administration expenses are less than 9 percent of its revenues, with more than 90 percent going toward patient care, said Kristin Merlo, a Delta spokeswoman.
“Washington Dental Services is a leading advocate for expanding access to oral health care, and the biggest obstacle to that is the high cost of dental benefits,” Merlo said. “The employers who pay (for coverage) are demanding lower treatment costs.”
Dentists who provide care through Delta are eligible to attend the Sept. 6 board meeting at the Lynnwood Convention Center to vote on the bylaw amendments or can assign a proxy to vote in their absence. Ballots, with the proxy statement, have been sent to Delta dentists.
Delta’s board of directors has not issued a statement regarding its position on the WSDA’s suggested amendments. Merlo would only say, “that’s our board’s decision.”
Dentists should either participate in person or submit their vote and select a proxy for the Sept. 6 board meeting to assist in that decision.
Delta’s apparent reluctance to speak to the WSDA’s proposals shows that dentists may have correctly diagnosed a need for greater transparency by the nonprofit.
Getting Delta to respond to and consider recommendations that would aid patient care, affordability and responsiveness shouldn’t be like pulling teeth.