Dental coverage plans - dental loss ratio - rules - definitions

(b) Dental coverage plan means a health coverage plan that includes coverage for the costs of dental care services. Dental coverage plan includes a plan issued by a prepaid dental plan organization that has a certificate of authority to operate pursuant to part 5 of this article 16.

(c) (I) Dental loss ratio means the percentage of premium dollars collected each year for a dental coverage plan that the dental coverage plan incurs on dental services provided to an enrollee, separate from overhead and administrative costs.

(II) The dental loss ratio is calculated by dividing the numerator by the denominator, where:

(A) The numerator is the sum of the amount incurred for clinical dental services provided to enrollees, the amount incurred on activities that improve dental care quality, and the amount of claims payments identified through fraud reduction efforts; and

(B) The denominator is the total amount of premium revenue, excluding federal and state taxes, licensing and regulatory fees paid, nonprofit community benefit expenditures, and any other payments required by federal law.

(2) (a) The commissioner shall define by rule:

(I) Expenditures for clinical dental services;

(II) Activities that improve dental care quality;

(III) Overhead and administrative cost expenditures; and

(IV) Nonprofit community benefit expenditures that are aligned with exclusion parameters and limits outlined in 45 CFR 158.162; except that the commissioner shall ensure that only expenditures that improve access to dental services or enhance dental health, and no overhead or administrative costs, are reported under this section.

(b) The definitions promulgated by rule pursuant to this section must be consistent with similar definitions that are used for the reporting of medical loss ratios by carriers offering health benefit plans in the state. Overhead and administrative costs must not be included in the numerator as described in subsection (1)(c)(II)(A) of this section.

(3) (a) On or before July 31, 2024, and on or before July 31 each year thereafter, a carrier that issues, sells, renews, or offers a dental coverage plan shall file a dental loss ratio form electronically with the division for the preceding calendar year in which dental coverage was provided by the dental coverage plan. The commissioner may create a new reporting form or use an existing reporting form to facilitate data collection. The commissioner shall ensure that fields are reported consistently by carriers. The filing must:

(I) Report the calculated dental loss ratio according to the formula in subsection (1)(c)(II) of this section;

(II) Separately report each data element described in subsection (1)(c) of this section;

(III) Report additional data that includes the number of enrollees, the plan cost-sharing and deductible amounts, the annual maximum coverage limit, and the number of enrollees who meet or exceed the annual coverage limit;

(IV) Report data by market segment and product type, as defined by rule of the commissioner; and

(V) Be in a form and manner as prescribed by rule of the commissioner.

(b) For the report to be submitted on or before July 31, 2024, a carrier shall also submit the information required in subsection (3)(a) of this section for the plan years 2021 through 2024.

(c) If the commissioner deems that data verification of a carrier's dental loss ratio for a dental coverage plan is necessary, the commissioner shall give the carrier at least thirty days' notification prior to beginning the verification process with the carrier.

(d) (I) By January 1 of the year after the division receives the dental loss ratio information collected pursuant to subsection (3)(a) of this section, the division shall make the information, including the aggregate dental loss ratio and the data reported pursuant to subsections (3)(a)(II) and (3)(a)(III) of this section, available to the public in a searchable format on a public website that allows members of the public to compare dental loss ratios among carriers by plan type by:

(A) Posting the information on the division's website; or

(B) Providing the information to the administrator of the all-payer health claims database established pursuant to section 25.5-1-204. If the division provides the information to the administrator, the administrator shall make the information available to the public in a format determined by the division.

(II) The division shall report the data in subsection (3)(a) of this section and, if available, subsection (4)(a) of this section to the general assembly during the State Measurement for Accountable, Responsive, and Transparent (SMART) Government Act hearings held pursuant to part 2 of article 7 of title 2.

(4) (a) Once the division has collected the data pursuant to subsection (3) of this section for two calendar years, the commissioner shall promulgate rules that create a process to identify any carriers that significantly deviate from average dental loss ratios and to investigate the causes of the deviation. Such process shall include:

(I) Calculating an average dental loss ratio for each market segment using aggregate data for a three-year period, consisting of data for the dental loss ratio reporting year that is being reported and the data for the two prior dental loss ratio reporting years;

(II) Identifying as outliers the dental coverage plans that fall outside of a set number of standard deviations from the average dental loss ratio, as determined by rule of the commissioner based on review of the data and consideration of the impact of nonprofit community benefit expenditures on any outlier calculation.

(b) The commissioner may apply more restrictive standard deviation metrics over time to prevent declines in the average dental loss ratio in a market segment and may establish by rule additional criteria for use in identifying outliers.

(5) (a) The commissioner may enforce compliance with the reporting requirements in this section and impose a penalty or remedy against a person who violates this section.

(b) The commissioner may investigate or take enforcement actions against carriers that are determined to be outliers pursuant to subsection (4) of this section and rules adopted pursuant to said subsection (4) and impose a penalty or remedy against a person who violates this section.

(6) The commissioner may promulgate rules to implement this section.