Proposed: October 15, 2001 at 33 N.J.R. 3617(a)

Adopted: January 29, 2002 by Donald Bryan, Acting Commissioner, Department of

Banking and Insurance.

Filed: January 29, 2002 as R. 2002 d. 59, with technical changes not requiring additional public notice and comment. (see N.J.A.C. 1:30-6.3).

Authority: N. J.S.A. 39:6A-4.6.

Effective Date: March 4, 2002.

Expiration Date: January 4, 2006.

Summary of Public Comments and Agency Responses:

The Department received seven timely comments on the rule proposal from:

Walter R. Bliss, Jr., New Jersey Counsel, Alliance of American Insurers;

Insurance Council of New Jersey;

State Farm Mutual Automobile Insurance Company;

New Jersey Manufacturers Insurance Group;

Jake Papay, Gebhardt & Kiefer

New Jersey Dental Association; and

Alma L. Saravia, representing the New Jersey Association of Osteopathic Physicians and Surgeons.

COMMENT: Several commenters stated that they supported the promulgation of a dental fee schedule to fill the gap left when the other auto medical fee schedule rules were adopted. However, these commenters also believed that the limitation of the schedule to only 62 codes limited its effectiveness as a cost control measure and recommended that more codes be added.

RESPONSE: The Department does not agree with the commenters. Limiting the schedule to the most commonly used codes permits cost savings while not mandating fees for very rarely performed procedures that may not be accurate. However, as noted below in response to another comment, the Department will review the codes on the schedule to see if codes should be added and to reflect changes in the CDT-3 codes.

COMMENT: One commenter supported the fee schedule as proposed if it still represented the

75th percentile of dental fees. If the fees had changed between proposal and adoption, the commenter requested that the schedule be amended upon adoption to reflect the change.

RESPONSE: Based on the information provided by the Department's expert, the dental fee schedule as proposed represents the 75th percentile of billed fees. N.J.S.A. 39:6A-4.6(a) requires that the fee schedules be updated biennially for inflation and to add new codes, if necessary.

COMMENT: One commenter noted that a number of codes from the CDT-3 manual published in 2000 were not included in the proposal. The commenter believed that these codes may not have been among the most commonly used because they are new but that some should, however, be included in the dental fee schedule. Specifically, the commenter noted the increasing use of dental implants to restore lost teeth and recommended that codes related to implants and abutments be added to the dental fee schedule. Another commenter provided a list of codes recommended for inclusion in the fee schedule.

RESPONSE: The Department will assess the need to include additional codes from the CDT-3 manual, including those referenced by the commenters and, where appropriate, adopt such codes in future rulemaking.

COMMENT: One commenter noted that some dentists use medical CPT codes for surgery to treat temporomandibular joint dysfunction when no surgery has been performed and when there are dental codes that would more accurately describe the treatment rendered. The commenter urged the Department to include language in the adopted rule that would require dentists to use dental codes to avoid inappropriate over-reimbursement.

RESPONSE: The Department will look into whether such a rule provision is necessary to address the commenter's concern. Future rulemaking will provide additional notice and opportunity for public comment. However, the Department notes that the existing rule requires providers to bill and insurers to reimburse only for services that were actually provided. The American Medical Association's Current Procedural Terminology (CPT) and the American Dental Association's Current Dental Terminology (CDT) publications contain relatively detailed explanations of what procedure(s) each code represents.

COMMENT: One commenter asked that the rule state that code 09610, therapeutic injection, should apply on a per visit basis and not to each injection the dentist made,otherwise excessive fees would be generated .

RESPONSE: The Department will look into whether such a rule provision is necessary to address the commenter's concern. Future rulemaking will provide additional notice and opportunity for public comment. However, the Department notes that the existing rule requires that when multiple procedures are performed on the same patient by the provider, the multiple procedure reduction formula applies. The exemption from this rule for treatment to different body parts only applies to operative or surgical procedures, which would not appear to include injections.

COMMENT: One commenter noted that the codes on the schedule do not follow the most recent version of Current Dental Terminology, Third Edition (CDT-3), Version 2000. CDT-3 codes begin with the letter "D" instead of the numeral "0". The commenter expressed the opinion that dentists would bill for services using the CDT-3 codes and that insurers would have to match the codes to those used in the fee schedule.

RESPONSE: The Department agrees with the commenter that the dental fee schedule should use the most recent version of the CDT codes. A comparison of the fee schedule codes with the CDT-3 codes reveals that the only way in which they differ is the use of the initial "D". There are no codes on the Department dental fee schedule that are not in CDT-3 and all the descriptions of the procedures are the same. Therefore, the Department will amend the rule upon adoption to substitute a "D" for the initial "0" on each code.

COMMENT: Two commenters noted that for those codes that are not included in the fee schedule, there is no definition of what constitutes the "usual, reasonable and customary fee" that is the maximum that the insurer can reimburse.

RESPONSE: The Department notes that "usual, reasonable and customary fee" has been the standard for payment for services since the fee schedules were originally promulgated. For codes that are on the schedule, an insurer's limit of liability is the usual, reasonable and customary fee for the service or the fee schedule, whichever is less. Likewise, the fee schedule has never been the universe of codes that can be billed and there have always been services for which there was no fee on the schedules. In such cases, the insurer's limit of liability is the usual reasonable and customary fee for the service. Nothing in the proposal of this new dental fee schedule has changed that standard. The Department is reviewing whether a definition of "usual, customary and reasonable" would assist payers and providers.

COMMENT: One commenter stated that the Department had implemented the medical fee schedule statute in an arbitrary manner by calculating dental fees on billed data while paid fee data was used to produce the physicians fee schedule. The commenter characterized the statement in the Summary of the proposed rule that the dental fee schedule was based on billed fees because dentists did not enter into fee discounting arrangements as a fallacy because of the existence of dental plan organizations (DPO's). The commenter provided a copy of its brief in a challenge to the physicians' fee schedule and recommended that the Department not adopt any fee schedules until the decision of the Appellate Division is rendered, or in the alternative, adopt a physicians' fee schedule based on billed fees.

RESPONSE: The Department does not agree with the commenter. The vendor hired by the Department to develop the fee schedules maintains a database of "allowed" or paid fees by physicians. The Department's vendor has been unable to locate any such database of allowed fees for dentists. DPO's are a very small part of the market and participating dentists are paid a capitated fee per enrolled person. All the fee schedules are calculated in accordance with N.J.S.A. 39:6A-4.6 and the Department declines to wait until the conclusion of litigation initiated by the commenter to adopt the dental fee schedule.

A Federal standards analysis is not required because the medical fee schedules, including the adopted dental fee schedule, and rules are not subject to any Federal requirements or standards.

Full text of the adoption follows (additions to proposal indicated in boldface with asterisks *thus*; deletions from proposal indicated in brackets with asterisks *[thus]*):

Appendix

Exhibit 2

Dental Fee Schedule