ADA calls for ERISA, Medicare Advantage reform

Association responds to FTC’s request for information

The ADA is offering its perspective on how certain anticompetitive regulations impact the dental sector, in response to the Federal Trade Commission’s request for information on reducing anticompetitive regulatory barriers.  

In comments filed May 21, ADA President Brett Kessler, D.D.S., and Interim Executive Director Elizabeth Shapiro, D.D.S., J.D., applauded the agency’s examination of how federal regulations may inadvertently hinder competition and choice in health care. The letter highlighted the ADA’s interest in promoting competitive, innovative and patient-centered practices in the dental marketplace, and recommended specific actions for the Federal Trade Commission to take.  

Three areas of federal policy in particular reduce competition or create market distortions in dental care and coverage, according to the ADA. These include: 

• Employee Retirement Income Security Act preemption that takes dental plan oversight away from the states. 
• Lack of loss ratio requirements and other limitations on Medicare Advantage dental benefit plans.  
• Other federal regulatory frameworks impeding innovation or favoring dominant insurers, including policies from the Centers for Medicare and Medicaid Services, Department of Labor, and Internal Revenue Services.  
   
  The ADA noted that a large number of Americans with dental insurance receive those benefits through employer-sponsored plans, many of which are self-funded and governed by the Employee Retirement Income Security Act, known as ERISA. This law was enacted to set minimum standards for private employer benefit plans, but includes certain preemption language that some administrators of some self-funded plans argue exempts the plans from state laws.  

“In practice, this means that self-funded dental benefit plans (and importantly the insurers or third-party administrators that service them) consider themselves to be largely exempt from state insurance department oversight,” Drs. Kessler and Shapiro wrote. “While [the Employee Retirement Income Security Act] preemption was intended to allow uniform plan administration across states, its overextension in the health and dental realm has become a double-edged sword: it often creates a regulatory vacuum in which no regulator (state or federal) effectively oversees important aspects of dental coverage, to the detriment of competition and consumer protection.” 

The ADA expressed concern that the overly expansive interpretation of the law reduces transparency and accountability in dental insurance, and negatively affects pricing and provider contracting. It urged the Federal Trade Commission to consider reforms such as supporting clarification of ERISA’s limits, promoting transparency of plan fiduciary status, and establishing a federal floor for key patient protections.  

In the letter, the Association also commented on how the current regulatory treatment of dental coverage in Medicare Advantage distorts competition and limits beneficiary choice in the senior dental market. Many senior Americans seek dental coverage through Medicare Advantage plans that include dental benefits, with roughly 97% of enrollees in plans that advertise some dental coverage.  

However, several features of  dental benefit regulation in Medicare Advantage lead to outcomes that do not necessarily serve patients’ best interests and raise questions about fair competition, according to the ADA. These include highly variable and limited benefits, a lack of transparency and standardization, provider network and participation barriers, and exclusion from medical loss ratio calculations.  

The ADA recommended the Federal Trade Commission engage with CMS to ensure the competition among Medicare Advantage plans on dental benefits “shifts from marketing gimmicks to genuine value for consumers.” The letter supported specific steps such as standardizing benefit disclosures, including dental in medical loss ratio and oversight measures, and protecting provider participation.  

“We respectfully urge the [Federal Trade Commission] to consider convening a workshop or issuing a report focused on competition in dental markets, as a follow-up to this [request for information]. Such an initiative could elevate the visibility of dental-specific competition issues that often fly under the radar, and ultimately lead to concrete policy actions by the [Federal Trade Commission] or partner agencies. The ADA would be eager to participate in and contribute to any such efforts,” Drs. Kessler and Shapiro concluded.