Dental practices often assume that having a direct contract with an insurance carrier automatically protects them from shared network agreements. While this is frequently true, it is not universal, and misunderstandings around overrides are a common cause of unexpected reimbursement changes.
This page explains when a direct contract does override a shared network agreement, when it does not, and why practices must understand carrier-specific rules.
The General Rule: Direct Contracts Usually Override
In most cases, a direct contract takes priority over any shared network agreement.
When a direct contract is in place:
The carrier pays under the direct fee schedule
Shared network agreements sit behind the direct contract
The shared network does not apply unless the direct contract is removed
This is how many major carriers, including Cigna and MetLife, typically operate.
Why Shared Networks Still Matter
Even when a direct contract exists, shared networks still matter because:
They can apply after a termination
They may apply to other carriers connected through the direct contract
They can influence which fee schedule is used if multiple paths exist
Understanding what sits behind the direct contract is critical before making changes.
Important Exceptions to the Override Rule
Not all carriers follow the override rule consistently.
A key exception discussed in the transcript is Ameritas:
Emeritus does not always allow direct contracts to override shared network agreements
If multiple paths exist, Ameritas may select the lowest-paying fee schedule
This can occur even when the practice believes it has a direct contract in place
This behavior increases the risk of silent downgrades.
How Multiple Network Paths Create Risk
When a practice participates in:
A direct contract, and
One or more shared network agreements
The carrier may have multiple reimbursement paths available.
If no opt-out exists:
The carrier may default to the lowest-paying path
A downgrade can occur without a contract termination
This is why some practices experience reimbursement changes without knowingly changing participation.
What Happens After a Direct Contract Is Terminated
Once a direct contract is terminated:
The override protection is removed
Shared network agreements may become active
Pickup through shared networks is not guaranteed
Practices should expect:
A participation gap
Uncertainty around which networks may reattach
Possible changes in fee schedules
The Role of Opt-Outs
Opt-outs are the primary way to control shared network behavior when a direct contract is in place.
Key points from the transcript:
Some carriers allow agreement-specific opt-outs
Others apply opt-outs globally across all shared networks
Opt-outs prevent unintended pickup or downgrades but do not terminate contracts
Opt-out rules vary by carrier and must be evaluated individually.
Why Assumptions Create Problems
Many practices assume:
A direct contract fully protects them
Shared networks are irrelevant once direct
Downgrades only happen after termination
These assumptions are often incorrect and can lead to reimbursement surprises.
Summary
A direct contract usually overrides a shared network agreement, but not always. Carrier-specific rules, multiple network paths, and exceptions — particularly with Emeritus — can allow shared networks to apply even when a direct contract exists. Practices should understand override behavior and use opt-outs where necessary to protect reimbursement.
