Delta Dental of Washington Answers Member Questions on New Reimbursement Model
WSDA has been in conversation with Delta Dental of Washington (DDWA) about their new reimbursement model. The following questions were posed by WSDA volunteer leaders about the model and answered by Delta Dental.
In addition to the following answers, DDWA also provided this message regarding their new reimbursement model.
Plan Inception Questions
1. Why did DDWA design and implement this new model?
The new reimbursement model, which came just one year into the tenure of Delta Dental of Washington (DDWA) CEO Mark Mitchke, is the result of the organization’s renewed commitment to work directly with the dental community to explore innovative ways to improve oral health throughout the state.
The primary objective of this new model is to design a reimbursement model that focuses on metrics that patients, employers, dentists and DDWA all care about. Delta Dental of Washington launched the new reimbursement model with the goal to test, listen, learn, and adjust regularly based on feedback from Member Dentists. DDWA evaluates the model for accuracy and enhancement annually based on the collected feedback.
Objectives:
- Create a reimbursement model that is transparent, equitable and rewards Member Dentists for prevention, access to care and patient satisfaction; things that dentists, patients, employers and DDWA care about most.
- Invest in our network as dentists are a critical partner in improving oral health in Washington.
- Offer a smaller set of standardized fixed fee schedules to reduce variability from one practice to the next. In 2019, DDWA had thousands of filed fee schedules in our systems. Today, nearly half of practices in the network are on one of the 50 fee schedules, or rungs as they are frequently described, in the new model.
- Create a system that is rational, easier to explain, and transparent.
- With consideration to the dental benefits market, ensure the new reimbursement model is sustainable from a competitive standpoint.
- Create a model in direct alignment with our vision of all people enjoying good oral health.
- Create a performance-based model which allows providers to have influence over future reimbursement levels.
2. Were any internal or external clinical guidelines or evidence-based research used in developing this new model?
The new model is the result of a year-long effort that included deep analysis as well as hundreds of meetings with Member Dentists across the state during Mark Mitchke’s listening tour. DDWA conducted multiple Member Dentist Surveys and used some of the evidence-based DQA guidelines as input metrics in the model. Through our discussions with Member Dentists and surveys conducted, there were commonalities identified in what providers considered best practices toward improving oral health. These included regular preventive visits, access to an established dental home and patient satisfaction with their healthcare provider.
Marketing, Plan Design, & Data Questions
3. Has DDWA developed or does it intend to develop any sort of internal ratings or rankings based upon any facet of this new model? If so, will these ratings and rankings be transparent to Member Dentists?
The inputs are used to calculate a fee schedule or rung for reimbursement and the metrics are available to Member Dentists through our online provider portal. Delta Dental of Washington does not have plans to expose metrics to subscribers.
4. Has DDWA developed or does it intend to develop any sort of benefits plan that will limit patient access to certain dentists based upon ratings or rankings informed by any facet of this new model?
DDWA has not developed any sort of benefit plans that will limit patient access to certain dentists based upon ratings or rankings informed by any facet of this new model. Current benefit plans encourage prevention, and the new reimbursement model rewards practices with increased prevention and access, which aligns with the DDWA mission of removing barriers and improving oral health.
5. How has DDWA announced this new model to patients and the public more broadly?
Delta Dental of Washington is excited about the new reimbursement model and has shared the model with providers, dental practice brokers and consultants, brokers and consultants that sell dental benefits, employers who purchase our plans, and other Delta Dental Member Companies.
6. Will DDWA communicate with patients, verbally or in writing, to encourage patients to become a patient of record with another Member Dentist based upon any facets of this model?
DDWA does not encourage patients to transfer to another dentist based on any facet of this model.
7. Are group practices, multiple locations with a single Tax Identification Number (TIN), treated differently than solo practices (one location with one TIN)? Do larger practices inherently get a benefit of a higher rung based on practice size and number of DDWA patients seen?
All practices are treated the same in the model. Practices (as identified by Tax ID Number/TIN) with multiple locations receive a weighted-average score across their locations. When calculating the score for patients seen (access), we remove large DSOs (Dental Service Organization) from the calculation to ensure small practice owners are not negatively impacted.
8. Would different locations under the same TIN be under the same rung and ladder, or is it possible different locations would be on different rungs or ladders?
The new reimbursement model is based on TIN and Specialty, which means locations under the same TIN will have the same rung score. If the practice has multiple locations, their scores are calculated on a weighted average of all locations.
Financial Impact Questions
9. The communications to-date state that no providers in the model have experienced rate cuts while some have seen or will see rate increases in the near future. Will DDWA implement Member Dentist rate cuts into the model? If so, when will rate cuts be added into the model?
Delta Dental of Washington recognizes that dental practices are still recovering from the COVID-19 pandemic and its associated impacts on practice employment, inflation, and patient volumes. No practices will have their fees reduced in 2023 due to lower performance scores on the model inputs. DDWA’s intent is to provide data and create transparency through the reimbursement model dashboard available on the provider portal, empowering practices to track and improve their scores over time. The Provider Compensation Committee (PCC), a subcommittee of the Delta Dental of Washington Board of Directors, will continue to monitor claims trends and practice costs over time to determine if fee increases or reductions will be implemented. Should fee reductions ever be implemented, DDWA will provide advance notice to providers, at least 12 months, to allow significant time for practices to improve their metrics.
10. How will DDWA’s loss ratio change once the new reimbursement plan is fully implemented? Will a higher percentage of premium dollars be spent on patient care?
While the new reimbursement was not designed to specifically influence loss rations, there are many factors that do impact DDWA’s loss ratio. Delta Dental of Washington is a mission-driven, not-for-profit organization, that is focused on improving oral health in Washington. In 2022, over $.93 of all premium dollars collected were passed through to dentists directly in claims payments.
11. Since the inception of the new model, has the statewide average for fees for the 20 most frequently billed codes increased or decreased and by how much?
The average allowed fees for the most frequently used codes have increased since the inception of the new model.
12. Will there be a difference in fees between specialists and general practitioners? Will there be a possibility of an increased fee for the most complex or difficult cases seen by specialists?
In 2021, using DDWA claims data and third-party analysis of other carriers’ fees, a competitive base-level fee schedule was developed for specialists. Any specialist that had fees below the base-level schedule, had their fees increased to the new fee schedules. In 2023, DDWA will also make inflationary adjustments to specialist fee schedules for codes that are impacted by higher lab costs.
13. With what frequency will fees be changed in this new model? Will any factors other than those outlined in the “reimbursement ladder,” “input algorithm,” and the four inputs (market cost index, prevention focus, access, patient retention) be used in determining fees coming forward under this new model?
DDWA and the PCC review fees annually to determine any changes to the model. These changes include reimbursement adjustments as well as modifications to the metrics. The PCC considers the current economy, competitive environment, network discount data, third party information, provider feedback and the demands of our employer groups in making their annual assessment and decisions.
“Reimbursement Ladder” Questions
14. How many ladders are there and how many rungs are on each ladder?
The model includes four ladders, one Premier and one PPO for General Practitioners and one Premier and one PPO for Pedodontists. There are 50 rungs on each ladder. There is a 7% discount between Premier and PPO fee schedules.
15. What is the variance in fees between each rung and also between the “highest” rung and the “lowest” rung?
While there are technically 50 rungs, the minimum rung any dentist can score is 11, with the highest being 50.
At an individual procedure level, there is an average of 14 percent increase from rung 11 to rung 50.
At a provider revenue level, there is an average 30 percent increase from rung 11 to rung 50.
On average, there is a 0.9 percent increase per procedure code from one rung to the next. Depending on the code, some are a little higher and some are a little lower.
16. Are there any limits, caps, or quotas on the number of members that can be assigned to a particular “rung”?
No, there is no limit, caps, or quotas on the number of members that can be assigned to a particular rung.
17. Please elaborate on the “input algorithm.” What are the weights for each of the four inputs (market cost index, prevention focus, access, patient retention) used in the “input algorithm”? Are there any additional inputs beyond the four identified above? Please describe any additional inputs.
The new reimbursement model is based on four input metrics: market cost index, prevention focus, access, and patient retention.
Market Score: Practice costs (market costs) are determined by blending average submitted fees from claims, average hygienist salaries, and average commercial rent costs for specific geographic areas of the state. Market Cost scoring determines the starting rung on the fee ladder (Rung 1-10). Practices within the same market area will receive the same Market Cost score.
The remaining three metrics (prevention, access, retention), add up to another 40 rungs above the initial market cost rung.
Prevention: There are two measures for preventive input. This metric is weighted the most, at 50 percent:
- Cleaning Rate: the percentage of unique DDWA patients receiving cleaning procedures.
- Fluorides for elevated risk children: the percentage of elevated risk DDWA patients through age 18 receiving topical fluoride application.
For General Practitioners, the cleanings metric is weighted 80 percent and the fluoride metric for children with elevated caries risk is weighted 20% of the total preventative score. For Pediatric Dentists, the fluoride application for patients with elevated caries risk represents 100 percent of this score. For practices with no children, the fluoride metric is not included, and the practice is not negatively impacted due to the exclusion of the metric.
Access: Patient demand is the number of unique Delta Dental of Washington covered patients seen at each location. Each covered family member with a dental service, counts as a unique patient. Access is a weighted average patient count for a TIN across all locations. This metric is weighted at 25 percent. DSOs with large patient counts are not included when calculating this metric to ensure independent practices are not impacted.
Retention: Patient retention is determined by calculating the years since the first service date for each Delta Dental of Washington patient seen. This input only includes patients seen more than two years ago and does not include patients only seen once with a problem focused exam. This metric is weighted at 25 percent. New providers with less than five years of retention data are given the median retention score to ensure they are not penalized for being new to practice.
Market Cost Index Questions
18. DDWA has identified four inputs that will determine which “rung” on the “reimbursement ladder” a dentist will be assigned. Regarding the Market Cost Index, please elaborate on the size and scope of DDWA’s geographic markets. How many geographic markets will DDWA use in Washington? What is the average number of dentists in each market? How many dentists are in the largest and smallest markets?
The Market Cost Index is a scoring input designed to recognize relative differences in practice costs across Washington state based upon a practice’s geographic location. The different markets within the Market Cost Index are broken up into urban cities (e.g., North Seattle, Bellevue, Tacoma, Spokane), suburban counties (e.g., non-Seattle King County, Non-Tacoma Pierce County, Non-urban Spokane County), and all other rural counties. The dentist population density within each market does not influence the Market Cost Index score.
19. With what frequency is the “Market Cost Index” being updated? How often will reimbursement rates be adjusted based upon this input?
The Market Cost Index is a relative scoring input. A practice’s score on this metric is purely based on their practice’s geographic location. This metric is designed to recognize relative differences in practice costs across Washington state and not designed to scale with broader market changes in practice costs. Changes to the underlying ladder methodology and fees as a result of dental market cost changes, including any inflationary adjustments, will continue to be reviewed on an annual basis by the PCC.
20. DDWA has indicated that it will use data from the Bureau of Labor Statistics (BLS) to determine an average dental hygienist salary per market. There is an approximately two-year lag between now and the most current BLS data on dental hygienists. Will DDWA incorporate more accurate data into its market cost index?
The Market Cost Index was designed to incorporate data from BLS to provide relative hygiene salary cost differences by Washington market. There are no current plans to replace this data source in the calculation of the relative scores by market. However, additional sources of market data (e.g., practice surveys and studies) around labor costs have been consulted more recently to aid in the PCC’s inflationary support decision. DDWA will continue to leverage as much relevant and timely data as is available in its analysis of provider costs and compensation.
21. Will the Consumer Price Index (either for the market more broadly or for dental services specifically) be used in the “market cost index” in any way? Will dental office costs beyond hygiene labor and commercial rent be a factor in the “market cost index” in any way? If not, why not?
DDWA is currently unaware of any specific, validated publicly available measure of dental practice administrative CPI. The Market Cost Index metric is designed to be a proxy for factors that contribute to a practice’s relative overhead burden with staffing and commercial rent being significant items. Additionally, DDWA looks at submitted costs assuming those reflect practice costs. DDWA does not have the current capability to collect specific dental practice administrative cost data from over 4,000+ practices across Washington state. DDWA will continue to research and analyze ways to enhance our understanding of practice cost dynamics, including new and more relevant sources of actionable, timely supporting data.
Prevention Focus Questions
22. Were clinical guidelines or evidence-based research used to develop DDWA’s definition of “at- risk children”? If so, please identify the guidelines and/or research.
Yes, we used DQA guidelines to identify children at elevated risk. Children are defined as eligible members 18 years of age who had a qualifying procedure within the previous three years identifying them as having elevated risk. For children who meet the guidelines of elevated risk, one fluoride treatment, either D1206 or D1208, in the 12-month reporting period will give “credit” for the fluoride treatment.
Please refer to the DQA technical specifications for the list of specific qualifying treatment codes.
23. Will general practitioners who do not routinely provide care to children be negatively impacted in their prevention focus score?
The prevention metric includes two components, cleanings for adults and fluoride for “at-risk children.” If the practice sees no children, the fluoride measure does not apply to their practice, but if the practice sees any “at-risk children” they are held to the fluoride metric.
24. All dental offices have patients that are non-compliant with treatment plans or preventive care guidance for a whole host of reasons and the number of non-compliant patients varies greatly across practice locations. Will dentists with more non-compliant patients be penalized in this new model?
The DDWA model metric calculation measures all providers equally. Additionally, there is an expectation that all practices will face similar obstacles such as the number of non-compliant patients.
25. How will DDWA ensure that dentists are not penalized for providing care to vulnerable patient populations that experience barriers (socio-economic, transportation, language, etc.) to obtaining optimal care? Does placing reimbursement incentives on prevention discourage dental offices from bringing more patients in vulnerable populations into dental practices? Are these policies consistent with increasing health equity?
Though there is an expectation that all practices will face similar obstacles, Delta Dental of Washington does recognize there are practices with unique patient populations, with clinics who primarily treat children with disabilities being one example. This reimbursement model may not be compatible with those practice types. As such, consideration remains on how to handle those rare cases.
26. Does DDWA anticipate any additional measures or factors will be added to the “prevention focus input”? If so, when would these potential measures be added? What clinical guidelines and/or evidence-based research will be used to develop any additional metrics or measures added in the future?
Delta Dental of Washington launched the new reimbursement model with the goal to test, listen, learn, and adjust regularly based on feedback from Member Dentists. DDWA evaluates the model for accuracy and enhancement annually based on the collected feedback. Any changes to the existing model will be communicated well in advance to provide an opportunity for practices to manage the change. DDWA continues to use industry standard ADA and DQA measures as our guideline for creating any changes to the metrics.
Access to Care Questions
27. DDWA has stated that a maximum cap will be placed on the number of patients with DDWA dental benefits counted to reach the highest score on this input. What is the maximum cap on the number of patients counted in this input? Is it a percentage of patients or a finite number of patients?
The goal of the access metric is to encourage patients to see any dentist they choose and reward dentists who see more DDWA patients. The cap is in place to avoid penalizing smaller practices. Each Market Area has a “maximum patient count” which is not to exceed 1600 patients per year for a particular TIN. In areas where practices are smaller than the maximum, patient counts will be lower than 1600.
28. In a presentation released by DDWA, it states that one dental office will be measured in relation to “peer practices.” Please define “peer practices.” Are “peer practices” based on size, specialty, age of providers, mile radius, and/or other factors?
Peer practice for General Practitioners and Pedodontists is defined as any practice within the pre-defined market. DDWA identified market types and markets within them for this purpose:
- Urban: Consists of seven major cities in Washington, with boundaries as defined by common geo-mapping software. These include Bellevue, North Seattle, South Seattle, Spokane, Tacoma, Vancouver.
- Suburban: Consists of the counties surrounding these cities, excluding the cities themselves. These include Clark, King, Pierce, Snohomish, Spokane, Thurston counties.
- Rural: Consists of the rest of Washington as a single unit.
29. In a presentation released by DDWA, it states that one dental office will be measured in relation to “neighboring dental offices.” Please define “neighboring dental offices.” Are “neighboring dental offices” based on size, specialty, age of providers, mile radius, and/or other factors?
Peer practice and neighboring dental offices were used interchangeably in the presentation/our communications.
- Urban: Consists of seven major cities in Washington, with boundaries as defined by common geo-mapping software. These include Bellevue, North Seattle, South Seattle, Spokane, Tacoma, Vancouver.
- Suburban: Consists of the counties surrounding these cities, excluding the cities themselves. These include Clark, King, Pierce, Snohomish, Spokane, Thurston.
- Rural: Consists of the rest of Washington as a single unit.
30. In alignment with DDWA’s vision that “all people can enjoy good oral and overall health with no one left behind,” can you please define “good oral health” and elucidate on whether that definition is being incorporated in this reimbursement model?
While there are not yet industry-recognized, peer-reviewed definitions of quality oral health outcomes, there are several correlated behaviors/activities that align with favorable oral and overall health. Focus on prevention and actively seeking and obtaining preventive dental care is known to reduce potential for dental caries as well as to contribute to lowering risks for medical conditions like pregnancy, and from comorbidities such as diabetes and heart disease. Access to a dentist is a key driver of enabling patients to assess their oral health risk and to manage their overall health. Establishing a consistent patient dental home (i.e., retention) has been proven to result in better overall oral health outcomes versus lack of a dental home.
Patient Retention Questions
31. How will DDWA measure patient retention for patients who experience a life-changing event (marriage, retirement, job change, etc.) that remain as a patient of record, but no longer have a DDWA dental benefit?
All patients for a practice, including those who experience life changing events, are factored into the retention scoring. There are a multitude of reasons why a patient may no longer be seen by a particular practice. The DDWA retention calculation measures all providers equally, with an expectation that all practices will face similar obstacles such as patients leaving town.
32. Please define “retained.” If a patient does not seek treatment for several years, are they still considered “retained” for the years when treatment is not provided? Some patients with excellent oral health have routine dental appointments at a frequency greater than one year; will these patients be considered retained every year or simply in years when treatment is provided?
Patient retention is determined by calculating the years since the first service date for each Delta Dental of Washington patient seen. This input only includes patients seen more than two years ago, and it does not include patients only seen once with a problem-focused exam.
Example: A patient who saw Dr. A, then Dr. B for a while, then returned to Dr. A, will be credited to Dr. A for the entire period, and also to Dr. B for the period between the first and last visits to Dr. B.
33. If a DDWA-contracted dentist purchases a dental practice from another DDWA-contracted dentist, will the four inputs (market cost index, prevention focus, access to care, and patient retention) remain constant for the new practice owner?
DDWA recognizes that the newly purchased practice owners would require additional time to build the practice and maintain the scores. The standard procedure is to allow the new practice owner to be on the previous owner’s “rung” for 24 months.
This article originally appeared in the Summer 2022 issue of WSDA News.
