Are Dental Practices Overpaying for Membership Plan Compliance?
Compliance is essential for structuring legal, transparent, and fair dental membership plans, safeguarding practices from fines or legal issues. However, not all states regulate membership plans or require licensure, and misconceptions can lead to costly overcompliance.
Practices in non-regulated states spend thousands annually contracting with Discount Plan Organization (DPO’s) who lead practices to believe that DPO compliance is required in every state.
But the truth is that many states do not require a DPO-license and some states do not regulate discount plans at all. The consequence of overcompliance is unprofitable plans or expensive plans that do not serve patients who need to access oral care.
The Root of Compliance Confusion
Payer Networks
Historically, dental practices joined payer networks, accepting 10-20% (now 25-50%) discounts off UCR fees in exchange for new patients directed by insurers. Being “in network” helped practices fill their schedules with insured patients.
Outcome: Practices offered discounts in exchange for a steady flow of new patients.
Discount Plan Organizations (DPOs)
Companies like Membersy, Careington, and Subscribili emerged, obtaining DPO licenses to administer membership plans. Practices agreed to 15-20% UCR discounts and paid commissions to DPOs, but unlike with payer networks, no new patients were guaranteed. Many practices mistakenly believe DPO administration is mandatory for compliance.
Outcome: Practices offer discounts and pay DPO commissions for perceived compliance, often without added benefits.
Clarifying Compliance Needs
Of the 24 states that require a DPO license, 8 permit dentists to contract directly with their patients under Direct Primary Care (DPC) legislation. The ADA has compiled a list of these states, and here, no DPO license is required to offer discounts through membership.
In just 17 states, for compliance purposes, practices and groups can contract with a DPO, or apply for their own DPO license, a fairly simple matter. Please ensure that you seek your own legal counsel to ensure that your plans are compliant, and do not rely on this advice only.
Steps to Avoid Overpaying
By understanding state-specific requirements and critically evaluating vendor services, dental practices can ensure compliance without overpaying, keeping membership plans affordable and competitive.
- Research State Requirements
Visit your state’s insurance department website or contact them to verify if a DPO license is required. Many states have direct primary care agreement (DPC) legislation, which allows you to implement an in-office dental plan without having to register as an insurance company. - Scrutinize Vendors
Request detailed service breakdowns and evidence of necessity. Avoid long-term contracts without clear justification. - Consider Self-Administering
Apply for your own DPO license if needed (we can help!), or explore platforms like Plan Forward, which enable practices to manage plans directly without third-party involvement. - Leverage Professional Resources
The American Dental Association (ADA) and state dental associations can provide guidance.
Note : This guide pertains specifically to Plan Forward, not general membership plan software. Plan Forward empowers dental practices to administer plans independently and own their fee schedule, handling patient enrollment, plan selection, contracting, and fee collection without third-party intermediaries.
