TRENTON, N.J. – Gov. Phil Murphy signed legislation Friday (S2507/A605) sponsored by Assemblywoman BettyLou DeCroce that would stop dental insurance companies from selling or renting their provider networks and discounts to third parties. These arrangements, referred to as “silent PPOs” or “rental networks,” are often made without the knowledge of dentists or patients.
“This law is all about transparency and protecting patients and dentists from these hidden and very expensive insurance agreements,” said DeCroce (R-Morris). “People should know what is being covered by their health insurance and dentists should know what to expect for reimbursements.”
Dentists and other providers generally join a health insurance’s PPO network and agree to take lower compensation than they otherwise might charge in exchange for a flow of patients. When the health insurance company sells or rents their PPO network to a third party without notifying the providers it is called a silent PPO. The in-network dentist then unknowingly provides service at a discounted rate to patients not in the original network.
Most health care providers are not even aware they are in a silent PPO until they receive reimbursement from a third party that claims entitlement to a payment reduction.
Silent PPOs hit a nerve in patients, too. Without accurate cost and benefit information, patients could end up receiving an unexpected bill or forgo treatment because of the out-of-pocket price.
“No one deserves a surprise statement in the mail,” said DeCroce. “Not only can this impact their pockets, but also their health.”
The law only permits health insurers to contract with third parties if they give dentists in their network the ability to opt-out of such an agreement.