BUREAU OF INSURANCE

BASIS STATEMENT AND SUMMARY OF COMMENTS

02-031 C.M.R. CHAPTER 835

DENTAL INSURANCE PLAN LOSS RATIO REPORTING

Acting Superintendent of Insurance Timothy N. Schott hereby adopts rule Chapter 835, “Dental

Insurance Plan Loss Ratio Reporting,” pursuant to 24-A M.R.S. §§ 212 and 4319-B. The

purpose of the proposed rule is to establish standards for calculating average loss ratios for plans

providing dental care services, reporting dental loss ratios to the Superintendent, determining

Executive Director of the Legislative Council.

The public hearing took place as scheduled by videoconference. The rule is hereby adopted as

proposed, subject to the changes discussed below in response to the comments and a few non-

substantive editorial corrections.

Comments

The following persons commented at the hearing:

Jay Nutting, Maine Street Solutions

on behalf of National Association of Dental Plans (NADP),

America's Health Insurance Plans (AHIP), and

American Council of Life Insurers (ACLI)

Mr. Duffy and Ms. Ossenfort also submitted timely written comments, as did:

Bernard J. LaPine

Director, Regulatory and Legislative Affairs

United Concordia Insurance Company

Writing jointly, Owen Urech for NADP,

Amanda Herrington for AHIP

Cindy Goff for ACLI, and

Dan Demeritt for Maine Association of Health Plans (MeAHP)

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Summary of Comments and Bureau of Insurance Responses

They recommended revising the definition of administrative cost expenditures to exclude

mention of payroll expense.

Instead, we added a new Section 5(2)(D)(7) as follows:

Payroll, except for positions dedicated to activities that improve oral and overall

activities;

This clarifies that payroll directly related to quality improvement activities may be

recognized as a quality improvement expense. We also revised the definition of

administrative cost expenditures as follows to clarify that it does not include expenses

that would meet the general definition but are specifically classified in some other

category: for example, quality improvement payroll, or community benefit charitable

expenses in lieu of taxes.

“Administrative cost expenditures” means a carrier’s financial administrative,

marketing and sales, commission, distribution, claims operation, utilization

review, network operations, charitable, and payroll expenses, but does not include

expenses specifically recognized under this rule as expenses for activities that

improve dental care quality or as community benefit expenses.

proposed. The practice of excluding commissions from premium is illegal in Maine.

With narrow exceptions that are not relevant here, 24-A M.R.S. §§ 2174 and 2403 define

premium to include the entire cost of coverage and prohibit charging add-on fees.

Although there is a further exception at 24-A M.R.S. § 2412-A permitting fee-based

compensation in lieu of commissions for “large commercial risks,” those alternative

arrangements are only permitted for property and casualty insurance, not for medical or

dental insurance.

C. Section 5(1) Activities That Improve Dental Care Quality: All the commentors were

concerned with the proposed language stating that carriers “shall” implement such

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carriers to implement such activities or programs. They requested a change of “shall” to

“may” in Section 5(1).

is not to regulate the underlying activities, but rather to address their impact on the dental

Accordingly, the Bureau has revised the introduction to Section 5(1) as follows:

evidence-based developments in treatment, receive credit under Subparagraph

6(1)(A)(2) for implementing and maintaining activities that improve dental care

These To qualify for recognition as activities that improve dental care quality,

these activities must:

D. Section 5(1)(A), criteria for quality improvement: Anthem suggested the paragraph be

amended to read as follows: “Improve oral and overall health and advance oral health

quality, including increasing the likelihood of desired outcomes compared to a baseline;

reducing dental disparities among specified populations; and improving patient safety,

reducing medical errors, or lowering infection in ways that are capable of being

Are Be grounded in the implementation, development, or improvement of

evidence-based dental care, widely accepted best clinical practice, or criteria

issued by recognized professional dental associations, accreditation bodies,

government agencies, or other nationally recognized health care quality

F. Section 5(1), information technology expenses: Anthem requested a new paragraph

clarifying that quality improvement activities include information technology to support

effective case management, care coordination, chronic disease management, medication

and care compliance, and other important oral and overall health initiatives.

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Bureau Response:

for information technology expenses, as discussed below, is for “upgrades in information

technology that are designed primarily or solely to improve claims payment capabilities

or to meet regulatory requirements for processing claims.” Section 5 is not intended to

provide a comprehensive list of all qualifying activities, and any attempt to do so would

recommended that this section be deleted. This definition doesn't recognize the

relationship between overall health and oral health, and would prohibit carriers from

including claims in which dental is intertwined; i.e. diabetes can lead to periodontitis,

pregnancy can cause periodontal disease in expectant mothers, etc.

Bureau Response: The Bureau agrees that these expenses can promote dental quality, but

the reason for the exclusion is to avoid double-counting and misattribution of expenses.

Section 5 (2)(A) is consistent with the federal exclusion at 45 CFR § 158.150(c)(2), and

is therefore adopted as proposed.

H. Section 5(2)(D)(2) Exclusion for claims adjudication expenses. Anthem stated that

because updates in health information technology qualify as a credit towards the MLR

under the ACA, the provision designating claims adjudication as an administrative

or to meet regulatory requirements for processing claims”;

earlier comments, information technology expenses are not unconditionally recognized as

quality improvement expenses. If the primary purpose of the expense is the improvement

of health care quality, it could qualify as a quality improvement expense if the other

standards are satisfied. If the primary or sole purpose is claims processing, it is an

administrative expense.

I. Section 5(2)(D)(6), provider credentialing expenses: Anthem stated that provider

credentialing is designated as a healthcare improvement activity in the federal MLR

calculation under the ACA. Therefore, they suggested striking subparagraph 6.

Bureau Response: Anthem’s statement is unsupported by any citation and appears to be

erroneous. 45 CFR § 158.150(c)(10) expressly lists “provider credentialing” as one of

the activities that “must not be included in quality improving activities.”

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J. Section 5(2)(D)(7), payroll: As noted earlier, the classification of payroll as an

administrative expense was revised, in response to the comment by NADP, AHIP, ACLI,

and MeAHP, to distinguish between payroll in general and payroll specifically related to

quality improvement. This new subparagraph was added to codify that distinction:

(7) Payroll, except for positions dedicated to activities that improve oral and overall

Bureau Response: Although quality improvement activities might be useful to publicize

for marketing purposes, that does not make marketing itself a quality improvement

activity. Therefore, Subparagraph (8) is adopted as proposed. On the other hand,

the suggested revision to Subparagraph (9), which as revised reads as follows:

(8 9) Calculating and administering individual enrollee or employee incentives; unless

L. Section 6(1)(B), exclusion of taxes and fees from premium: NADP, ACLI, AHIP and

MeAHP requested amending this section to allow a carrier to deduct community benefit

expenditures, as defined at 45 CFR § 158.162(c), up to the amount of any state taxes, if a

been subject to Maine’s two percent premium tax. As revised, this paragraph reads as

follows:

The denominator is the total amount of premium revenue, excluding federal and

state taxes and licensing and regulatory fees paid. For nonprofit carriers that are

exempt from Maine taxes, the pro rata share of the carrier’s community benefit

expenditures may be excluded, in the same proportion that the carrier’s premium

for fully and partially credible Maine dental plans bears to the carrier’s total

premium for all lines of business, up to a maximum of two percent of the gross

premium, before exclusions, for fully and partially credible Maine dental plans.

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M. Section 6(3), implementation date: NADP, ACLI, AHIP, and MeAHP requested that the

implementation for the proposed rule of July 31, 2023 would cause significant difficulties

for dental plans in Maine to provide valuable data and comply with these important

requirements and requested a delay until July 31, 2024.

Bureau Response:

The Bureau rejects this request. The controlling statute, 24-A M.R.S. § 4319-B(6)(C),

instructions are currently available on the Bureau website to assist carriers with the

N. Reporting Template – national data: United Concordia objected to the reporting

fewer covered lives, asserting that 24-A M.R.S. § 4319-B(2) makes the Maine dental loss

Bureau Response

based on partially credible state experience. It is a matter of actuarial judgment whether

national data is relevant in a particular case, and Section 6(2) as adopted makes the use of

national data permissive rather than mandatory and calls for giving appropriate weight,

on a case-by-case basis, to Maine and national experience.

Bureau Response

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