Status of settlement in litigation between Delta Dental of California and California Dental Association

UPDATE: The case management conference scheduled for August 25, 2017, was postponed by the court. A new date has been set for October 11, 2017. (updated 8/29/17)

June 29, 2017

SAN FRANCISCO — On April 21, 2017, the Superior Court of California granted preliminary approval to the proposed settlement of litigation between Delta Dental of California and the California Dental Association (CDA) regarding Delta Dental Premier® dentist contract terms and fee limitations. On June 8, 2017, the Court entered an order vacating the dates it had set for the approval process to allow the parties time to address an issue that has arisen regarding the proposed settlement.

CDA and seven individual dentists (collectively, “Plaintiffs”) are serving as class representatives on behalf of a proposed class of all California dentists who have been Delta Dental Premier dentists at any time from January 1, 2011, to April 21, 2017, regardless of whether they are CDA members. Plaintiffs filed an arbitration in 2013 and a Superior Court lawsuit in 2014, challenging Delta Dental’s 2013 actions to amend its Participating Dentist Agreement (PDA) with Premier dentists to remove a restriction on Delta Dental’s ability to reduce “maximum amounts allowed” for Premier provider contracted fees. Plaintiffs also challenged an inflation percentage (INAP) that Delta Dental established and applied to Premier dentists’ requests for higher fees. Delta Dental maintained that the PDA expressly permitted the proposed amendments and that they were in accordance with California’s Knox-Keene Act governing health care service plans. Delta Dental also maintained that use of the INAP did not breach the terms of the PDA. The initial proposed settlement of these issues resulted from mediation that concluded in the fall of 2016.

On April 21, 2017, the court entered an order granting preliminary approval of a proposed class action settlement, and class members were sent a class notice on May 11. The settlement that the court preliminarily approved includes, among other provisions, payments to some California dentists for limits Delta Dental placed on Premier fee increases made since January 1, 2011. In the course of validating the allocation of the payments under the settlement, Delta Dental discovered a miscalculation of the financial impact of the INAP limitation on fees of Premier dentists, which could affect the Proposed Settlement. The parties asked for, and the court is allowing, additional time for the parties to review the procedures to develop a revised estimate of the alleged INAP impact, and to confirm the number and identity of all class members whose fee payments were reduced by application of the INAP.

The payments provided in the proposed settlement are for requested increases that were limited in whole or in part; they are not related to fee reductions. At no time did Delta Dental reduce Premier fees or announce a reduction in such fees.

On June 23, class members were mailed a notice informing them that the court has vacated the dates to object to or opt out of the proposed settlement and also has vacated the final approval hearing that was scheduled for August 31, 2017. The court has scheduled a case management conference for August 25, 2017.

Delta Dental maintains that, at all times, it has followed its PDAs with Premier dentists and complied with both the letter and spirit of California’s Knox-Keene Act. Delta Dental’s agreement to settle this lawsuit is not an admission of liability or wrongdoing. Nonetheless, Delta Dental is satisfied to resolve this issue and remains committed to all its participating dentists.

More information on the proposed settlement may be found at www.DeltaDentalOfCaliforniaSettlement.com.

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