The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Appropriations Committee on Agriculture, Environment, and General
Government
BILL: CS/SB 892
INTRODUCER: Banking and Insurance Committee and Senator Harrell
SUBJECT: Dental Insurance Claims
DATE: February 12, 2024
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Johnson Knudson BI Fav/CS
2. Sanders Betta AEG Pre-meeting
3. FP
Please see Section IX. for Additional Information:
PLEASE MAKE SELECTION
I. Summary:
CS/SB 892 revises provisions within the Florida Insurance Code relating to covered dental
services, contractual agreements, and dental claims payments by an insurer, prepaid limited
health service organization (PLHSO), or a health maintenance organization (HMO). The bill
provides the following changes:
Revises the definition of covered services, and as a result, if an insurer, HMO, or PLHSO
denies service due to a contractual limitation (maximum benefits paid prior to the end of the
plan year), then the procedure would be considered a non-covered service and the dentist
would not be subject to the negotiated rate, and may charge patient a higher rate;
Prohibits a contract between a dentist and a health insurer, HMO or PLHSO from limiting the
method of claim payments for dental services to credit card payments only;
Requires a health insurer, PLHSO, or HMO to disclose in writing to a dentist any fees
associated with an electronic funds transfer (EFT) and alternative payment methods at least
10 days before the insurer, HMO or PLHSO pays a dentist via EFT;
Prohibits an insurer, HMO or PLHSO that pays a claim to a dentist through Automatic
Clearing House (ACH) from charging a fee solely to transmit the payment unless the dentist
has consented to the fee; and
Limits circumstances in which an insurer, HMO, or PLHSO may deny the payment of a
claim if the procedure was previously authorized by an insurer, HMO, or PLHSO prior to the
dentist rendering the service. These circumstances include:
o Benefit limitations being reached subsequent to the issuance of the prior authorization;
REVISED: BILL: CS/SB 892 Page 2
o Inadequate documentation submitted by a dentist to support the originally authorized
procedures and claim;
o Changes in the insured’s condition or new procedures are provided to the insured
subsequent to the issuance of the prior authorization;
o The denial of the dental service claim was due another payor being responsible for
payment or the dentist has already been paid for the procedures identified in the claim;
and
o The person receiving the procedure was not eligible to receive the procedure on the date
of service and the insurer, HMO, or PLHSO did not know of the ineligibility.
The bill has an indeterminate, likely insignificant impact to state revenues and expenditures. See
Section V., Fiscal Impact Statement.
II. Present Situation:
State Regulation of Insurance
The Office of Insurance Regulation (OIR),
1
is responsible for all activities concerning insurers
and other risk bearing entities, including licensing, rates, policy forms, market conduct, claims,
issuance of certificates of authority, solvency, viatical settlements, premium financing, and
administrative supervision, as provided under the Florida Insurance Code.
2
To transact business
in Florida, a health insurer or health maintenance organization (HMO) must obtain a certificate
of authority from the OIR.
3
The Agency for Health Care Administration (AHCA) regulates the
quality of care provided by HMOs under part III of ch. 641, F.S. Prior to receiving a certificate
of authority from the OIR, an HMO must receive a Health Care Provider Certificate from the
Agency.
4
As part of the certification process used by the Agency, an HMO must provide
information to demonstrate that the HMO has the ability to provide quality of care consistent
with the prevailing standards of care.
5
Dental insurance in Florida operates within a regulatory framework overseen by state agencies
such as the OIR and the Florida Department of Financial Services (DFS). These agencies ensure
that dental insurance plans comply with state laws and regulations to protect consumers and
ensure fair practices within the industry.
The Agency for Healthcare Administration (AHCA)
The AHCA is the chief health policy and planning entity for the state.
6
The AHCA is responsible
for health facilities licensure, inspection, and regulatory enforcement; investigation of consumer
complaints related to health care facilities and managed care plans; the implementation of the
1
The OIR is a unit under the Financial Services Commission, which is composed of the Governor, the Attorney General, the
Chief Financial Officer, and the Commissioner of Agriculture. Commission members serve as the agency head for purposes
of rulemaking under ch. 120, F.S. See s. 20.121(3), F.S.
2
Section 20.121(3)(a), F.S.
3
Sections 624.401 and 641.49, F.S.
4
Section 641.495, F.S.
5
Id.
6
Agency for Healthcare Administration (AHCA), About the Agency for Health Care Administration,
https://ahca.myflorida.com/about-the-agency-for-health-care-administration (last visited Feb. 8, 2024) BILL: CS/SB 892 Page 3
Certificate of Need program; the operation of the Florida Center for Health Information and
Policy Analysis; the administration of the Medicaid program; the administration of the contracts
with the Florida Healthy Kids Corporation; the certification of health maintenance organizations
and prepaid health clinics; and other duties prescribed by statute or agreement.
7
The head of
AHCA is the Secretary, who is appointed by the Governor, subject to confirmation by the
Senate.
8
Dentists and the Oversight of Dental Practices in Florida
A dentist is licensed to examine, diagnose, treat, and care for conditions within the human oral
cavity and its adjacent tissues and structures.
9
Dentists may delegate certain tasks
10
to dental
hygienists and dental assistants, but a patient’s “dentist of record” retains primary responsibility
for all dental treatment on the patient.
11
The Board of Dentistry within the Department of Health (DOH) is the state’s regulatory board
for the practice of dentistry, dental hygienists, and dental assistants under the Dental Practice
Act.
12
A dentist is licensed to examine, diagnose, treat, and care for conditions within the human
oral cavity and its adjacent tissues and structures.
13
Any person wishing to practice dentistry in this state must meet specified requirements and apply
to the DOH for licensure. Applicants must sit for and pass three examinations prior to
licensure:
14
The National Board of Dental Examiners dental examination (NBDE);
A practical examination, which is the American Dental Licensing Examination developed by
the American Board of Dental Examiners, Inc.;
15
and
A written examination on Florida laws and rules regulating the practice of dentistry and
dental hygiene.
To qualify to take the Florida dental licensure examination, an applicant must be 18 years of age
or older, be a graduate of a dental school accredited by the American Dental Association (ADA)
or be a student in the final year of a program at an accredited institution, and have successfully
completed the NBDE dental examination.
16
Dentists must maintain professional liability insurance or provide proof of professional
responsibility. If the dentist obtains professional liability insurance, the coverage must be at least
$100,000 per claim, with a minimum annual aggregate of at least $300,000.
17
Alternatively, a
dentist may maintain an unexpired, irrevocable letter of credit in the amount of $100,000 per
7
Id.
8
Id.
9
Section 466.003(2)-(3), F.S.
10
Section 466.024, F.S.
11
Section 466.018, F.S.
12
Section 466.004, F.S.
13
Section 466.003(3), F.S.
14
Section 466.006, F.S.
15
Rule 64B5-2.013, F.A.C.
16
Section 466.006(2), F.S.
17
Rule 64B5-17.011(1), F.A.C. BILL: CS/SB 892 Page 4
claim, with a minimum aggregate availability of credit of at least $300,000.
18
The professional
liability insurance must provide coverage for the actions of any dental hygienist supervised by
the dentist.
19
However, a dentist may be exempt from maintaining professional liability insurance
if he or she:
20
Practices exclusively for the federal government or the State of Florida or its agencies or
subdivisions;
Is not practicing in this state;
Practices only in conjunction with his or her teaching duties at an accredited school of
dentistry or in its main teaching hospitals; or
Demonstrates to the Board that he or she has no malpractice exposure in this state.
There are currently 17,161 dentists with active licenses to practice in Florida.
21
There are 40 out-
of-state registered telehealth dentists
22
and 43 dentists who hold temporary certificates to practice
dentistry in a state or government facility in Florida.
23
Health and Dental Insurance
Section 624.603, F.S., defines health insurance, also known as disability insurance, as the
“insurance of human beings against bodily injury, disablement, or death by accident or
accidental means, or the expense thereof, or against disablement or expense resulting from
sickness, and every insurance appertaining thereto. Florida law expressly excludes workers’
compensation coverage, except as provided in s. 624.406(4), F.S., from the definition of health
insurance.
24
Health insurance can protect consumers’ assets and pays medical expenses.
25
When
selecting health insurance, consumers can choose between a:
Traditional health insurance policy, where he or she select a health care provider, pay for
services when rendered, and submit the bill to the insurance provider for reimbursement of
the portion agreed to pay under the policy terms. In some instances, the health care provider
will submit the bill directly to the insurer and await payment; or
Managed care system, which combines the delivery and financing of health care services.
Under a managed care system, a consumer’s choice of doctors and hospitals are often
limited; out of pocket payments for medical care and services are often less; and health care
services are controlled by the managed care network.
26
18
Rule 64B5-17.011(2), F.A.C.
19
Rule 64B5-17.011(4), F.A.C.
20
Rule 64B5-17.011(3), F.A.C.
21
Department of Health, License Verification, available at https://mqa-
internet.doh.state.fl.us/MQASearchServices/HealthCareProviders (last visited Feb. 9, 2024).
22
Id.
23
Id.
24
Section 624.603, F.S.
25
Florida Department of Financial Services, Health Insurance and Health Maintenance Organizations, A Guide for
Consumers, https://www.myfloridacfo.com/docs-sf/consumer-services-libraries/consumerservices-documents/understanding-
coverage/consumer-guides/health-insurance-guide.pdf?sfvrsn=5546b2b_2 (last visited Feb. 8, 2024).
26
Id. BILL: CS/SB 892 Page 5
Health maintenance organizations (HMOs), preferred provider organizations (PPOs), Exclusive
Provider Organizations (EPOs), and point-of-service plans (POS) are types of managed care.
27
In
Florida, health care services programs are governed by ch. 641, F.S.
28
Dental insurance is a contract with an insurance company which provides benefits that can help
lower the cost of dental treatment.
29
Similar to health insurance, dental insurance, in exchange
for a premium paid, generally lowers the out of pocket expense associated with dental visits.
Dental insurance generally covers preventive, basic and major categories. Preventive care is
often covered 100 percent by dental insurance; basic care is generally covered at 80 percent; and
major care is often covered at 50 percent.
30
In some instances, dental insurance does not cover
cosmetic procedures, orthodontic treatments, or pre-existing conditions.
31
Under a dental
insurance plan, HMOs and PPOs work much like their health insurance counterparts.
32
Dental
HMO plans typically cost less than other dental insurance plans; offer lower monthly premiums;
less out of pocket costs; and limit providers to dentists and specialists in the HMO network.
33
Dental PPO plans generally are more expensive than a HMO; offer a higher monthly premium;
out of pocket expenses are higher; and, the consumer is able to choose dentist and specialists in
and out of network.
34
Health Maintenance Organizations
Health Maintenance Organizations (HMOs) in Florida operate within a regulatory framework
overseen by OIR. To offer health insurance plans in Florida, HMOs must obtain a license from
the OIR.
35
Managed care plans are the primary offerings of HMOs in Florida. These plans
provide comprehensive healthcare services to members for a fixed monthly premium.
36
Members
typically select a primary care physician from within the HMO's network, who serves as the
main point of contact for all healthcare needs and referrals to specialists.
37
Oversight of HMO Contracts with Dentists
A contract between an HMO and a dentist licensed under chapter 466, F.S., for the provision of
services to a subscriber of the HMO may not contain a provision that requires the dentist to
provide services to the subscriber of the health maintenance organization at a fee set by the
health maintenance organization unless such services are covered services under the applicable
27
Id.
28
Section 641.18, F.S., provides legislative intent with regards to health care coverage in Florida: “Faced with the
continuation of mounting costs of health care, coupled with the state’s interest in high-quality care, the Legislature has
determined that there is a need to explore alternative methods for the delivery of health care services, with a view toward
achieving greater efficiency and economy in providing these services.”
29
Humana, Dental Insurance, Dental FAQs, How does dental insurance work, https://www.humana.com/dental-
insurance/dental-resources/how-does-dental-insurance-work (last visited Feb. 8, 2024).
30
Id.
31
Id.
32
Id.
33
Id.
34
Id.
35
Section 641.21(1), F.S.
36
Medicare, Medicare Health Plans, Your Health Plan Options, Health Maintenance Organizations (HMOs), What’s an
HMO? https://www.medicare.gov/health-drug-plans/health-plans/your-coverage-options/HMO (last visited Feb. 8, 2024).
37
Id. BILL: CS/SB 892 Page 6
contract.
38
The term “covered services” means dental care services for which a reimbursement is
available under the subscriber's contract, or for which a reimbursement would be available but
for the application of contractual limitations such as deductibles, coinsurance, waiting periods,
annual or lifetime maximums, frequency limitations, alternative benefit payments, or any other
limitation.
39
Prepaid Limited Health Service Organizations
Pursuant to Part I of ch. 636, F.S., the OIR regulates PLHSOs. A PLHSO is any entity which, in
return for a prepayment, provides limited health services to enrollees through an exclusive panel
of providers.
40
Prepaid limited health service organization does not include:
An entity otherwise authorized pursuant to the laws of this state to indemnify for any limited
health service;
A provider or entity when providing limited health services pursuant to a contract with a
prepaid limited health service organization, an HMO, a health insurer, or a self-insurance
plan; or
Any person who is licensed pursuant to part II of ch. 636, F.S., as a discount plan
organization.
41
A PLHSO provides the following limited health services:
Ambulance services;
Dental care services;
Vision care services;
Mental health services;
Substance abuse services;
Chiropractic services;
Podiatric care services; and pharmaceutical services.
42
Oversight of Prepaid Limited Health Service Organizations
The PLHSO arrangements or contracts with providers PLHSOs are governed by s. 636.035, F.S.
A contract between a PLHSO and a dentist licensed under ch. 466, F.S., for the provision of
services to a subscriber of the PHLSO, may not contain a provision that requires the dentist to
provide services to the subscriber of the prepaid limited health service organization at a fee set
by the PLHSO unless such services are covered services under the applicable contract. As used
in subsection (7), the term “covered services” means dental care services for which a
reimbursement is available under the subscriber's contract, or for which a reimbursement would
be available but for the application of contractual limitations such as deductibles, coinsurance,
waiting periods, annual or lifetime maximums, frequency limitations, alternative benefit
payments, or any other limitation.
38
Section 641.315(11), F.S.
39
Id.
40
Section 636.003(7), F.S.
41
Id.
42
Section 636.003(5), F.S. BILL: CS/SB 892 Page 7
Statutory Cost Containment Requirements
Insurers or HMOs use many cost containment and utilization review strategies to manage
medical and drug spending and patient safety. For example, insurers or HMOs may place
utilization management requirements on the use of certain medical treatments or drugs on their
formulary.
Section 627.4234, F.S., requires a health insurance policy or health care services plan, which
provides medical, hospital, or surgical expense coverage delivered or issued for delivery in this
state to contain one or more of the following procedures or provisions to contain health insurance
costs or mitigate cost increases:
Coinsurance;
Deductible amounts;
Utilization review;
Audits of provider bills to verify that services and supplies billed were furnished and that
proper charges were made;
Scheduled benefits;
Benefits for preadmission testing; and
Any lawful measure or combination of measures for which the insurer provides to the office
information demonstrating that the measure or combination of measures is reasonably
expected to have an effect toward containing health insurance costs or cost increases.
Denial of Claims
Coverage for medical services can be denied before or after the service has been provided,
through denial of preauthorization requests, through denial of claims for payment, or a
retroactive denial of payment. As a condition for coverage of some services, providers or
insureds are required to request authorization prior to the provision of the procedure. The full
claim or certain lines of the claim may be denied, such as a surgery with charges for multiple
procedures and supplies.
There are many possible reasons for claim denials.
43
Claims may be denied due to an incorrect
diagnosis code, incomplete claim submission, or the submission of a duplicate claim. Eligibility
issues can cause claims to be denied. For example, a claim may be submitted for a service
provided prior to an individual’s effective date of coverage or after it has been terminated.
Finally, claim denials can occur when a determination is made that the service provided was not
covered or it was not medically necessary. Denied claims
44
may be appealed.
After an insurer or HMO pays a claim, the insurer or HMO may conduct a claims audit to verify
claims were paid appropriately and accurately. Such an audit can be triggered by a variety of
reasons.
45
Some of these situations include new billing guidelines have been established by
43
KFF (a/k/a Kaiser Family Foundation), Private Insurance, Claims Denials and Appeals in ACA Marketplace Plans in 2021
(Feb. 9, 2023), https://www.kff.org/private-insurance/issue-brief/claims-denials-and-appeals-in-aca-marketplace-plans/ (last
visited Feb. 8, 2024).
44
U.S. Department of Health and Human Services, HealthCare.gov, Health Insurance Marketplace, Appealing a health plan
decision, https://www.healthcare.gov/appeal-insurance-company-decision/ (last visited Feb. 8, 2024).
45
LW Consulting, Inc., 10 Factors that Could Trigger an Audit of Your Medical Records, https://lw-consult.com/10-factors-
that-could-trigger-an-audit-of-your-medical-records/ (last visited Feb. 8, 2024). BILL: CS/SB 892 Page 8
regulators; the provider has made significant changes to the original bill, such as the diagnosis of
the patient; the plan is notified that the enrollee’s coverage is terminated due to non-payment of
premiums; or the plan is notified that the enrollee has other health insurance coverage. After the
audit, an insurer or HMO may retrospectively deny a claim for a preauthorized service and try to
recoup the payment from the provider. Reasons for the retroactive denial may include fraud,
submission of incomplete or inaccurate information; nonpayment of premiums; exhaustion of
benefits; coordination of benefits; or if the individual was not enrolled or eligible for coverage at
the time services were rendered.
46
As a result, an insurer or HMO may try to recoup payment
from a provider by retroactively denying a previously paid claim.
Group Health Plans Retroactive Termination of Coverage
Retroactive termination of insurance coverage to an earlier date due to an employee’s discharge
is an increasing problem for some providers and consumers. Some plans may allow an employer
to cancel coverage of an employee retroactively more than 90 days post termination. Other plans
will accept retroactive terminations for up to the preceding three months, if the plan has not paid
any claims for the insurer or HMO during that period. If claims have been paid within the
previous 60 days, the coverage termination date may be established as of the end of the month in
which services were rendered.
When a provider is notified of a retroactive termination, the provider may have already verified
that the insured or subscriber was covered, rendered services in reliance and expectation of
payment, and even received payment. Retroactive terminations often result in the provider or the
consumer bearing the loss, despite the verified eligibility.
Federal Subsidized Individual Policies or Contracts and Grace Periods
The federal Patient Protection and Affordable Care Act (PPACA)
47
guarantees access to
coverage and mandates certain essential health benefits, including pediatric dental coverage,
48
and other requirements. To address affordability issues, federal premium tax credits and cost-
sharing subsidies are available to assist eligible low and moderate-income individuals to
purchase qualified health plans (QHPs) on a state or federal exchange (exchange).
49
For plan
year 2024, Florida enrollees accounted for about 20 percent (4,211,902 individuals) of the
46
Health First Health Plans, Provider Directory (July 19, 2022), https://hf.org/sites/default/files/2022-
09/hfhp_indiv_directory.pdf (last visited Feb. 8, 2024).
47
The Patient Protection and Affordable Care Act (PPACA) (Pub. Law No. 111–148) was enacted on March 23, 2010.
available at https://www.govinfo.gov/content/pkg/PLAW-111publ148/pdf/PLAW-111publ148.pdf (last visited
Feb. 8, 2024). The Health Care and Education Reconciliation Act of 2010 (Pub. Law No. 111–152), which amended several
provisions of the PPACA, was enacted on March 30, 2010, available at https://www.govinfo.gov/content/pkg/PLAW-
111publ152/pdf/PLAW-111publ152.pdf (last visited Feb. 8, 2024).
48
Dental coverage is an essential health benefit for children under age 18, and must be available for a child either as part of a
health plan or as a separate dental plan. See U.S. Department of Health and Human Services, HealthCare.gov, Health benefits
& coverage, Dental Coverage in the Marketplace, https://www.healthcare.gov/coverage/dental-coverage/ (last visited
Feb. 8, 2024).
49
In general, individuals and families may be eligible for the premium tax credit if their household income for the year is at
least 100 percent but no more than 400 percent of the federal poverty line for their family size. See Internal Revenue Service,
Questions and Answers on the Premium Tax Credit, https://www.irs.gov/affordable-care-act/individuals-and-
families/questions-and-answers-on-the-premium-tax-credit (last visited Feb. 8, 2024). BILL: CS/SB 892 Page 9
21.2 million total individuals) enrolled through the state and federal exchanges.
50
For plan
year 2023, approximately 3,108,149 Floridians enrolled, and about 97 percent received tax
credits.
51
Under PPACA, insurers and HMOs must provide a grace period
52
of at least three consecutive
months
53
before cancelling the policy or contract of a federally subsidized enrollee who is
delinquent if the enrollee previously paid one-month’s premium. During the grace period, the
insurer or HMO must pay all appropriate claims for services provided during the first month of
the grace period. For the second and third months, an insurer may pend claims. Insurers or
HMOs must notify providers that may be affected that an enrollee has lapsed in his or her
payment of premiums and there is a possibility the insurer or HMO may deny the payment of
claims incurred during the second and third months.
54
If the insured or subscriber resolves all outstanding premium payments by the end of the grace
period, then the pended claims would be paid as appropriate. If not, the claims for the second and
third month would be denied. If coverage is terminated, the termination date is the last day of the
first month of the grace period and the insurer may not recoup any payment for claims made
during the first month of the grace period. At the end of grace period, the provider may seek
payment for the medical services the insurer denied for months two and three. According to a
2014 survey, 48 percent of the providers not participating with any PPACA exchange products
cited concerns about assuming financial liability during the grace period as a reason for their
decision.
55
According to the OIR, there are plans on the exchange that offer dental coverage for either an
adult or child or both embedded in a policy or contract. There are plans on the exchange that
offer standalone dental coverage, and such coverage may vary by county. Typically, insurers and
HMOs submit rate filings for policies or contracts in June and finalize such filings by August for
the following calendar plan year.
56
Grace Periods for Policies or Contracts without a Federal Subsidy
The federal regulation governing grace periods for federally subsidized policies or contracts does
not affect policies or contracts of individuals who are not enrolled in an exchange QHP or who
50
U.S. Centers for Medicare and Medicaid Services, Marketplace 2024 Open Enrollment Period Report: Final National
Snapshot (Jan. 24, 2024), https://www.cms.gov/newsroom/fact-sheets/marketplace-2024-open-enrollment-period-report-
final-national-snapshot (last visited Feb. 8, 2024).
51
U.S. Centers for Medicare and Medicaid Services, Effectuated Enrollment: Early 2023 Snapshot and Full Year 2022
Average (March 2023), https://www.cms.gov/files/document/early-2023-and-full-year-2022-effectuated-enrollment-
report.pdf (last visited Feb. 8, 2024).
52
Example of grace period: Premium is not paid in May. Premium payments are made in June and July. Grace period would
end July 31. Coverage would be cancelled retroactively to the last day of May. See U.S. Centers for Medicare and Medicaid
Services, How to apply & enroll, Premium payments, grace periods, & losing coverage, https://www.healthcare.gov/apply-
and-enroll/health-insurance-grace-period/ (last visited Feb. 8, 2024).
53
45 C.F.R. s. 155.430.
54
45 C.F.R. s. 156.270.
55
Tracy Gnadinger, Health Affairs, Health Policy Brief: The Ninety-Day Grace Period, (Oct. 16, 2014) available at
http://healthaffairs.org/blog/2014/10/17/health-policy-brief-the-ninety-day-grace-period/ (last viewed Feb. 8, 2024).
56
Correspondence with Kevin Jacobs, Deputy Chief of Staff, Office of Insurance Regulation (Feb. 2, 2024). (On file with
Senate Banking and Insurance Committee.) BILL: CS/SB 892 Page 10
are enrolled in an exchange QHP and do not receive a subsidy. The grace period for these
individual policies or contracts remain at the length required under Florida law,
57
which varies
by the duration of the premium payment interval. During the grace period, the policy or contract
stays in force. The policy is in force during the grace period, thus the insurer or HMO must
affirm that an individual is insured, even when the payment is late and remains unpaid during the
grace period. If the insurer or HMO does not receive the full payment of the premium by the end
of the grace period, coverage terminates as of the grace period start date and the insurer or HMO
may retroactively deny any claims incurred during the grace period.
Prompt Payment of Health Insurer and HMO Claims
The Florida Insurance Code prescribes rights and responsibilities of health care providers, health
insurers, and HMOs for the payment of claims. Florida’s prompt payment laws govern payment
of provider claims submitted to insurers and HMOs, including Medicaid managed care plans, in
accordance with ss. 627.6131, 627.662, and 641.3155, F.S., respectively.
58
The law prescribes a
protocol for specified providers to use for the submission of their claims to an insurer or HMO,
as well as a statutory process for insurers or HMOs to use for the payment or denial of the
claims.
Division of State Group Insurance
Under the authority of s. 110.123, F.S., the Department of Management Services (DMS), through
the Division of State Group Insurance (DSGI), administers the state group health insurance
program under a cafeteria plan consistent with s. 125, Internal Revenue Code. To administer the
state group health insurance program, the DMS contracts with third party administrators for self-
insured health plans and insured (HMOs), as well as a pharmacy benefits manager for the state
employees’ self-insured prescription drug program pursuant to s. 110.12315, F.S.
Credit/Virtual Card Payments and Fees Imposed on Dentists
59
According to the American Dental Association (ADA), dental insurance companies and third
party administrators may pay dental offices with a credit or debit card instead of a traditional
check. Many companies provide virtual credit card services and offer a virtual stored-value debit
card program designed specifically for claims payments. Generally, the cards are delivered to the
57
Sections 627.608 and 641.31(15), F.S. The grace period of an individual policy must be a minimum of seven days for
weekly premium; 10 days for a monthly premium; and 31 days for all other periods. The grace period of a HMO contract
must be at least 10 days. For group policies, if cancellation is due to nonpayment of premium, the insurer may not
retroactively cancel the policy to a date prior to the date that notice of cancellation was provided to the policyholder unless
the insurer mails notice of cancellation to the policyholder prior to 45 days after the date the premium was due. Such notice
must be mailed to the policyholder's last address as shown by the records of the insurer and may provide for a retroactive date
of cancellation no earlier than midnight of the date that the premium was due. See also Section 627.6645, F.S.
58
The prompt pay provisions apply to HMO contracts and major medical policies offered by individual and group insurers
licensed under ch. 624, F.S., including preferred provider policies and an exclusive provider organizations, and specified
contracts.
59
American Dental Association, Credit/Virtual Card Payment (2021), https://www.ada.org/-/media/project/ada-
organization/ada/ada-org/files/resources/practice/dental-
insurance/ada_credit_virtual_card_payment.pdf?rev=36fd0dc0475a41eba0446a1b1f67cbfc&hash=833CFBB660D3A5232C
F8FB0F851A17A2 (last visited Feb. 8, 2024). BILL: CS/SB 892 Page 11
dental office either by fax or email. Then, the dental office processes the payment by entering the
card number, security code, expiration date and amount.
The ADA notes virtual credit card companies may market the quicker reimbursement as a benefit
for dentists to use the credit/virtual card; however, dentists may incur a higher processing fee for
virtual cards than a traditional debit or credit card transaction.
60
The ADA suggests that a dental
office can request to opt out of using the card and instead receive a paper check as payment for
services rendered.
61
The ADA suggests that a dental office may need to contact the card issuing
company and not necessarily the dental plan to resolve this payment issue.
62
The ADA noted
there is a reported reluctance on these companies’ customer service representatives to waive the
credit/virtual card as payment, which may cause a dental office to request to speak to either a
supervisor or manager within the company.
63
A representative of the Florida Dental Association noted that states have enacted legislation to
address credit or virtual card payments.
64
III. Effect of Proposed Changes:
Credit Card Payments and Fees (Sections 1, 3, and 5)
Section 1 amends s. 627.6131, F.S., relating to claims; Section 3 amends s. 636.032, F.S.,
relating to acceptable payments; and, Section 5 amends s. 641.315, F.S., relating to provider
contracts.
The bill prohibits a health insurer, health maintenance organization (HMO) or prepaid limited
health service organization (PLHSO) from specifying credit card payment as the only acceptable
method for payments to the dentist. The bill requires a health insurer, HMO or PLHSO to
provide a written notice to the dentist at least 10 days before the payment of a claim to a dentist
through electronic funds transfer, including but not limited to, virtual credit card payments the
following information:
The fee, if any, associated with the electronic funds transfer; and
60
American Dental Association, Credit/Virtual Card Payment (2021), https://www.ada.org/-/media/project/ada-
organization/ada/ada-org/files/resources/practice/dental-
insurance/ada_credit_virtual_card_payment.pdf?rev=36fd0dc0475a41eba0446a1b1f67cbfc&hash=833CFBB660D3A5232C
F8FB0F851A17A2 (last visited Feb. 9, 2024).
61
Id.
62
Id.
63
Id.
64
Correspondence from Joe Ann Hart, (Feb. 1, 2024) (on file with Senate Banking and Insurance Committee). See also
American Dental Association, Dental Insurance Reform, Virtual Credit Cards, Virtual Credit Card – Claim Payment
Restrictions, State Law (2021), https://www.ada.org/-/media/project/ada-organization/ada/ada-
org/files/resources/practice/dental-insurance/ada_dental_insurance_reform_virtual_credit_cards.pdf (last visited
Feb. 9, 2024). See Dental Medical Billing, State Laws Changing (Sept. 15, 2022), citing South Dakota, Kentucky and Kansas
as states who enacted legislation prohibiting dental benefit plans from limiting method of claim payment to virtual credit card
only. Available at https://dentalmedicalbilling.com/advice/state-laws-changing/ (last visited Feb. 9, 2024); See supra note 60,
the American Dental Association, noted 13 states have passed legislation to address credit/virtual card payments. Those states
are: Alabama, Arizona, Connecticut, Georgia, Louisiana, Maryland, Missouri, Nebraska, North Carolina, Oklahoma, Oregon,
Texas, and Utah. BILL: CS/SB 892 Page 12
The available methods of payment of claims by the health insurer, HMO or PLHSO
including instructions to the dentist on how to select an alternative payment.
Further, the bill:
Prohibits a health insurer, HMO or PLHSO that pays a claim to a dentist through an
Automated Clearing House (ACH) transfer to charge a fee solely to transmit the payment to
the dentist unless the dentist has consented to the fee;
Provides that these provisions may not be waived, voided, or nullified by contract;
Authorizes the OIR to enforce these provisions pursuant to their general powers provided in
s. 624.307, F.S.; and
Authorizes the Financial Services Commission to adopt rules.
Limitations on Insurers, HMOs, or PLHSOs Denying Payment of Claims for Procedures
Included in Prior Authorizations (Sections 1, 4, and 5)
Section 1 amends s. 627.6131, F.S., relating to claims; Section 4 amends s. 636.035, F.S.,
relating to provider arrangements; and Section 5 amends, s. 641.315, F.S., relating to provider
contracts.
The bill prohibits an insurer, HMO or PLHSO from denying any claim subsequently submitted
by a dentist for procedures that were included in a prior authorization unless at least one of the
following circumstances applies for each procedure denied:
Benefit limitations, such as annual maximums and frequency limitations not applicable at the
time of the prior authorization, are reached subsequent to issuance of the prior authorization;
The documentation provided by the person submitting the claim fails to support the claim as
originally authorized;
Subsequent to the issuance of the prior authorization, new procedures are provided to the
patient or a change in the condition of the patient occurs such that the prior authorized
procedure would no longer be considered medically necessary, based on the prevailing
standard of care;
Subsequent to the issuance of the prior authorization, new procedures are provided to the
patient or a change in the patient’s condition occurs such that the prior authorized procedure
would at that time have required disapproval pursuant to the terms and conditions for
coverage under the patient’s plan in effect at the time the prior authorization was issued; and
The denial of the claim was due to one of the following:
o Another payor is responsible for payment;
o The dentist has already been paid for the procedures identified in the claim;
o The claim was submitted fraudulently, or the prior authorization was based in whole or
material part on erroneous information provided to the health insurer by the dentist,
patient, or other person not related to the insurer; and
o The person receiving the procedure was not eligible to receive the procedure on the date
of service and the health insurer did not know, and with the exercise of reasonable care
could not have known, of his or her ineligibility.
Further, the bill provides these provisions may not be waived, voided, or nullified by contract.
Furthermore, any contractual clause in conflict with these provisions or that purports to waive BILL: CS/SB 892 Page 13
any requirements of these provisions is null and void. The bill authorizes the Office of Insurance
Regulation (OIR) to enforce these provisions pursuant to their general powers provided in
s. 624.307, F.S., and authorizes the Financial Services Commission to adopt rules.
Provider Contracts and Covered Services (Sections 2, 4, and 5)
Section 2 amends s. 627.6474, F.S., relating to provider contracts; Section 4 amends
s. 636.035, F.S., relating to provider arrangements; and Section 5 amends, s. 641.315, F.S.,
relating to provider contracts.
The bill revises the definition of covered services to mean dental care services for which a
reimbursement is available under the contract or agreement of the insurer, HMO or PLHSO,
notwithstanding the application of contractual limitations, such as deductibles, coinsurance,
waiting periods, annual or lifetime maximums, frequency limitations, alternative benefit
payments, or any other limitation. As a result, if an insured or subscriber reaches their benefit
limits prior to the end of plan year, the dentist is not required to bill the insured or subscriber at
the negotiated rate. The dentist may charge a higher rate.
Effective Date (Section 6)
Provides the bill is effective July 1, 2024.
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
None.
B. Public Records/Open Meetings Issues:
None.
C. Trust Funds Restrictions:
None.
D. State Tax or Fee Increases:
None.
E. Other Constitutional Issues:
To the extent the bill applies to contracts and insurance policies entered into or renewed
before the effective date of July 1, 2024, the bill could impair those contracts.
Article I, s. 10 of the United States Constitution prohibits state legislatures from enacting
laws impairing the obligation of contracts. The severity of the impairment is a key issue
when evaluating whether a state law impairs a contract. In Exxon Corp. v Eagerton,
462 U.S. 176 (1983), the Supreme Court suggested it would uphold legislation that BILL: CS/SB 892 Page 14
imposes a generally applicable rule of conduct designed to advance a broad societal
interest that only incidentally disrupts existing contractual relationships.
While Florida courts have historically strictly applied this restriction, they have exempted
laws when they find there is an overriding public necessity for the state to exercise its
police powers. This exception extends to laws that are “reasonable and necessary to serve
an important public purpose,”
65
to include protecting the public’s health, safety or
welfare. For a statute to offend the constitutional prohibition against impairment of
contract, the statute must have the effect of changing substantive rights of the parties to
an existing contract. Any retroactive application of a statute affecting substantive
contractual rights would be constitutionally suspect. Historically, both the state and
federal courts have attempted to find a rational and defensible compromise between
individual rights and public welfare when laws are enacted that may impair existing
contracts. The balancing process focuses on whether “the nature and extent of the
impairment is constitutionally tolerable in light of the importance of the state’s objective,
or whether it unreasonably intrudes into the parties’ bargain to a degree greater than is
necessary to achieve that objective.”
66
V. Fiscal Impact Statement:
A. Tax/Fee Issues:
None.
B. Private Sector Impact:
Dentists may experience savings in fees if they opt out of the payment of claims by credit
cards. Further, dentists may realize additional revenues if an insurer, health maintenance
organization (HMO) or prepaid limited health service organization (PLHSO) is limited in
their ability to subsequently deny claims they previously authorized.
The impact on insurers, HMOs or PLHSOs is indeterminate. While the bill establishes
specific criteria for claims denial and service coverage, which could improve clarity for
providers, compliance may result in costs. These costs include investments in systems
and staff training by insurers, PLHSOs, and HMOs to ensure compliance.
Insureds or subscribers that have exhausted their dental policy limits prior to the end of
the policy or contract period may not be able to obtain additional services at the
negotiated rate if the dentist chooses to use a higher rate.
Federal regulations govern the grace period and payment of claims of individuals
receiving federally subsidized products on the exchange. This bill would not apply to
such claims.
65
Searcy, Denney, Scarola, Barnhart & Shipley, Etc. v. State, 209 So. 3d 1181 (Fla. 2017) at 1192 (quoting Pomponio,
Pomponio v. Claridge of Pompano Condominium, 378 So. 2d 774 (Fla. 1980))
66
Id. BILL: CS/SB 892 Page 15
The provisions of the bill would not apply to ERISA (Federal Employee Retirement
Income Security Act of 1974)
67
self-insured plans. ERISA preempts the regulation of
such plans by the state.
C. Government Sector Impact:
The bill has an indeterminate, likely insignificant impact to state revenues and
expenditures. The Office of Insurance Regulation (OIR) estimates the bill could increase
enforcement action which would necessitate recurring funds of $30,000 to upgrade
positions in OIR’s Legal and Market Regulations offices.
68
This can be handled within
existing resources.
If the provisions lead to an increase in appeals or legal challenges related to denied
claims, it could necessitate additional resources for adjudication processes, potentially
adding to state expenditures.
The bill does not impact the Division of State Group Insurance, as there is no expansion
of services within the bill.
69
However, an increase in premium costs for state agencies
who provide primary dental coverage, resulting from reimbursement requirements
stipulated in the bill, could adversely affect state government expenditures.
VI. Technical Deficiencies:
The effective date of the bill is July 1, 2024. Typically, health insurers and HMOs file rates with
the Office of Insurance Regulation (OIR) in June for the next calendar year and finalize the rates
around August. The Division of State Group Insurance plan year is also on a calendar year basis.
VII. Related Issues:
None.
VIII. Statutes Affected:
This bill substantially amends the following sections of the Florida Statutes: 627.6131, 627.6474,
636.032, 636.035, and 641.315.
IX. Additional Information:
A. Committee Substitute – Statement of Changes:
(Summarizing differences between the Committee Substitute and the prior version of the bill.)
CS by Banking and Insurance Feb. 5, 2024:
The committee substitute eliminates a provision in the bill that would authorize a health
67
29 U.S.C. 1001 et seq. (1974).
68
Office of Insurance Regulation, Senate Bill Agency Legislative Analysis of SB 892 (Jan. 11, 2024) (on file with the Senate
Committee on Agriculture, Environment, and General Government).
69
Email from Jake Holmgreen, Deputy Legislative Affairs Director, Florida Department of Management Services to Eric
Lloyd, Policy Chief, House Subcommittee on Insurance and Banking (Jan. 29, 2024) (on file with the Senate Appropriations
Committee on Agriculture, Environment, and General Government). BILL: CS/SB 892 Page 16
insurer, a prepaid limited health service organization or a health maintenance
organization to charge a reasonable fee for other value-added services related to
automatic clearing house (ACH) transfers.
B. Amendments:
None.
This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.