Membership Plan Regulations: Everything You Need to Know to Keep Your Organization Compliant

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Dental membership plans improve access to affordable dental care while growing your recurring revenue. However, before you begin exploring which solution is best for your practice, it’s critical to understand the importance of regulatory compliance in creating a successful and sustainable dental membership plan. 

Seth Bills, General Counsel at Membersy, has navigated the health law space for nearly a decade. He’s well-versed in regulatory compliance, with a specific focus on Discount Medical Plan Organization (DMPO) and HIPAA compliance. In his experience, there are a few misconceptions about membership plan compliance that can significantly impact long-term success.

Dental membership plans: A regulated space

“When it comes to DMPO compliance, there seems to be a lot of confusion about whether individual providers can charge for discounts,” says Bills. “We obviously know that a provider can offer discounts to their own patients, but the fact is that any time you charge a fee to access a discount on health care services, you’re likely entering into a regulated space. And, the primary reason for that is consumer protection.”

A dental membership plan is essentially a contract between a provider and a patient. The patient pays a periodic fee in exchange for access to discounted fees, and the provider agrees to perform services at the specified rates. This type of arrangement is also called a discount medical plan (DMP). This is important, because DMPs are currently regulated in 35 states. These regulations are primarily intended to ensure that consumers get what they pay for when they purchase a membership, and they are typically enforced by the state insurance department.

Regulatory requirements for DMPs vary from state to state, and can include written plan agreements, compliant marketing materials and disclaimers, specific member communications, surety bonds, and cancellation rights, to name a few. Most states that regulate DMPs also require the operator to apply to be licensed or registered with the state prior to selling the plan. 

The risk of a non-compliant dental membership plan

Dental providers must ensure that their plan is compliant in states where their practices operate to protect their business from risk. Failure to comply with regulatory requirements can have serious implications for dental practices. In addition to legal and financial penalties, non-compliance can cause a plan to be suspended or terminated. A sudden cancellation of the membership plan could damage a practice’s reputation and lead to loss of patient trust, as well as a loss of revenue for the practice.

A partner to simplify dental membership compliance

Dental membership plans can be an effective way for dental providers to offer affordable dental services to their patients, promote patient loyalty, and increase case acceptance, all while generating a recurring revenue stream. However, compliance plays a key role in building a sustainable membership plan that will help you maximize ROI for providers and patients and avoid regulatory pitfalls.

“Navigating compliance can be expensive. It can be confusing, especially if you’re operating in multiple states. There’s no reason that you, the provider, should be tasked with researching state regulations and drafting compliant plan materials before you can get your membership plan up and running,” says Bills. “That’s where Membersy can help.”

Practices should be aware of the importance of compliance, but the right membership plan partner will help guide you through the complexity and streamline the process. Partnering with a full-service plan administrator, like Membersy, that has experience with state and federal compliance requirements can save dental providers time and money.

Ebook: “Fantasy vs. Fact: A Guide to Membership Plan Compliance”

For a deeper dive into the facts and myths that surround membership plan compliance, download Membersy’s ebook, “Fantasy vs. Fact: A Guide to Membership Plan Compliance.” Bills shares the top five misconceptions about compliance and distills the key facts you need to know. 

Some of the topics covered in the ebook include:

  • Common misconceptions about compliance requirements
  • Strategies for communicating with patients about plan benefits and restrictions
  • Tips for avoiding common compliance mistakes