The tri-state organization of the Delta Dental Plan of Michigan, the
Delta Dental Plan of Ohio, and the Delta Dental Plan of Indiana
administrates dental benefits for 3.5 million subscribers in almost
3,700 groups ranging in size from 10 subscribers to a half million.
Last year 6 million claims for dental treatment were processed andpaid.
There are many employee groups that extend beyond state
boundaries (for example, employers with offices in many states).
This creates difficulties in the uniform processing of benefit claims.
On the one hand, it would be costly and a duplication of effort for
each Delta Dental Plan to maintain its own nationwide provider
network (networks are generally confined to single states).
On the other hand, there are significant costs incurred when one
Plan processes claims using the network and associated data base of
another Plan. This is because individual plans within the Delta Dental
System are independent and have invested heavily in the development
of their respective networks and databases.
Two approaches have been taken to address such distributed employee
groups. When a group is large and sufficiently dispersed it becomescost
effective to use the network and associated data base of other Plans---
this approach has been formalized as DeltaUSA and is used
by many Plans. Otherwise, a Plan (Michigan in this case) partitionsthe
out-of-plan out-of-state providers and applies a custom fee structure
for each partition element. The current partition and associated fee
structure is deemed inadequate.
The ideal completed project deliverable is an optimal partition of the
49 states excluding Michigan.and an associated fee structure.
In addition, factors based on calculated relationships to Michiganfees
should be delivered for each of the state groupings that are arrivedat.