Section 7: Establish Fair and Transparent Insurance Markets

From the giant Texas Medical Center to a solo practitioner in a tiny Panhandle crossroads, physicians’ practices fuel the economic engines that grow Texas. The economic benefit of doctors’ offices goes beyond the hundreds of thousands of direct jobs they support, including the quite-quantifiable ripple effect of those jobs and tax dollars through the local economy. It also takes in health care’s obvious, but somewhat less tangible, contribution to Texas’ continued economic development.

Physicians are small, midsize, and large employers. Solo practices often run on a shoestring, with only a nurse and one or two staff, while small or large groups use more support staff for medical and administrative functions. Regardless of practice size, physicians must be recognized as important businesses and employers who contribute billions of dollars to state and local economies. Physicians’ practices must remain viable to continue providing jobs and quality patient care in rural and urban Texas.

The Affordable Care Act (ACA) requires most Americans to have health insurance. By April 1, 2014, enrollment through the health insurance exchange marketplaces topped 7 million nationally — more than 733,000 were Texans. 

While Texas physicians want better access to coverage for their patients, they are frustrated by the confusion and administrative burdens imposed by the federal government’s implementation of insurance exchanges. Some of the many questions physicians and their office staff must have answered include:  

  • How do I determine that my patient purchased insurance coverage through the marketplace? 
  • Is my patient covered by a private commercial plan, HMO or PPO product, or by a subsidized qualified health plan product? 
  • How do I determine if my patient has paid his or her premium? 
  • Is my patient in a 90-day grace period? 
  • Did my patient purchase a narrow network plan that could prevent him or her from seeing a specialist? Does my patient understand the limitations of the provider network that came with the level of coverage purchased? 
  • What is the impact to my practice when health plans require electronic funds transfers or virtual credit card payments?  

While the ACA exchanges have brought about new insurance coverage opportunities for Texans, significant problems remain — and potential new ones are developing — with traditional health insurance companies and Texas’ workers’ compensation program. 

Coverage differentiation needed on patient identification cards 
Health insurers are providing a variety of insurance products inside and outside the ACA health insurance exchanges. These products include commercial HMOs, exclusive provider organizations (EPOs), and PPOs outside the exchange and qualified HMO and PPO plans inside the exchange, some of which are purchased with federal premium subsidies. Physicians’ office staff need to be able to determine and distinguish via the patient’s identification card if the coverage is a private commercial plan, an exchange plan, or a subsidized exchange plan.  

Physicians need to know this information to collect accurate copays and deductibles, as they can differ in commercial versus exchange plans. More important, they need this information when discussing treatment options with their patients, especially if a patient’s care spans several weeks or months. This becomes further complicated for patients in a subsidized exchange plan because they have a 90-day grace period to make their premium payments. 

Impact of the 90-day ACA grace period 
Under the ACA, people who buy a subsidized plan on the exchange also have the benefit of a 90-day grace period to bring premium payments current when they are in arrears. The federal government requires insurance companies to cover services for the first 30 days of the grace period. After the remaining 60 days, insurance companies may retroactively terminate the insurance policy if the insured person doesn’t make premium payments. This means that insurance companies may demand physician payments for services be returned even if the physician followed all the rules and requirements in providing care to the patient. When this happens, the physician is forced to seek payment directly from the patient, which is expensive, disruptive, and usually not successful, as care has already been rendered. In some cases, the physician has already dispensed expensive medications to the patient, resulting in a direct, out-of-pocket cost to the practice. TMA is asking the Centers for Medicare & Medicaid Services to require insurers who sell health plans on the ACA exchange to provide immediate notice when patients enter the 90-day grace period.  

When customers of any small business receive services or goods and intentionally do not pay for them, the cost of those items increases significantly for all the customers who do pay. Those same free market principles impact physician practices: The grace period may increase charges for those patients who do pay for the medical services they receive. 

Impact of narrow networks on access to care 
Some health plans sold through the ACA health insurance exchanges use “narrow networks,” that is, they limit the doctors and hospitals their patients can use. Go to Doctor A or Hospital A, and the plan will pay all or most of the bill. Go to Doctor B or Hospital B, and the patient will have to pay all or most of the bill. Narrow networks could mean some newly insured people are no longer covered when they see their former physician or go to their local hospital. A narrow network may mean physicians and hospitals with the appropriate expertise and resources for patients with rare or complex health problems may be available only with much larger out-of-pocket costs than the patient anticipated when purchasing his or her health insurance.[31]

Narrow networks have become increasingly popular, growing from 15 percent of the insurance plans that employers offered in 2007 to 23 percent in 2012.[32

Often, health plans advertise they have physicians, hospitals, and health care providers contracted to provide services, making it appear they have robust networks. This can be misleading to patients when the entire advertised network is not available when they need care. Patients who purchase coverage with a low premium discover they are required to use a limited or narrow network of physicians. In some cases, patients will end up paying more out-of-pocket costs even when they choose to see a physician inside the larger network but who is not part of the limited network. Health insurers should be required to disclose network limitations up front and in their marketing information so patients understand their out-of-pocket costs may be more when they actually need health care. 

Improving health plans’ communications about narrow networks would allow physicians and their staff to spend less time trying to explain the limitations of the insurance plan to the patient and more time focusing on patient care. 

Preserve the proprietary nature of negotiated rates in physician contracts
Under the guise of “transparency” and “decreasing the cost of health care” at the federal and state levels, there is much discussion about making the physician’s proprietary negotiated contract rates with health plans publicly available and allowing persons who are not parties to the contract to use those rates.  

To promote market competition, businesses in general are not required to share their contract rates with the public or with those who are not parties to the contract. This same free market principle also should apply to physicians’ practices. 

In health care, a “gag clause” was once an insurance company contract provision that prevented physicians from discussing all medical care options with their patients. Today, it is a loaded term some groups use to portray a barrier to consumers seeking health care price information. These groups are proponents of increased “price transparency” and use “gag clauses” to describe contract details between insurers and physician groups or hospital systems. The gag clauses are actually contractual provisions to prevent the parties to the contract from disclosing their negotiated fees to anyone outside the contract. When we buy groceries, we are not privy to the discount Walmart or H-E-B negotiated and paid its suppliers for their inventory. These prices are not publicly disclosed, even to the stores’ customers. 

Gag clauses do prohibit sharing of proprietary contract information to parties who are not health plan members or who are not a party to the contract between the health plan and physician or provider. Unfortunately, third-party administrators in Texas and other states have been pushing recently to require health plans, physicians, providers, or the state to disclose proprietary negotiated rates to the public. 

In reality, gag clauses do not prohibit health plans from sharing contract payment information with their own members for determining out-of-pocket payments. In fact, Texas’ Senate Bill 1731 passed in 2007 requires health plans to provide actual payment information to their enrollees when requested. Texas insurers have invested many millions of dollars into transparency tools that disclose estimated insurer payments and out-of-pocket payments for many services — none of which is prevented by any physician contract term. 

Virtual credit cards/electronic funds transfers — administratively simple but for whom? 
Health plans today rarely use paper checks to pay physicians. Instead they are using electronic payment methods, such as virtual credit cards (VCCs) and electronic funds transfers (EFTs). While physicians want health plans to simplify their administrative process to ensure timely payment, they don’t want it to come at an additional cost. Unfortunately, VCCs and EFTs do add more cost to physician practices and serve only to benefit the health plan. 

The American Medical Association (AMA) released a white paper on the impact of these two payment options on physician practices, which stated:   

  • Virtual credit card payments are a valid electronic alternative to paper checks, but they come with a cost to the physician practice. Just like credit card payments, VCC payments are subject to interchange and transaction fees. Those interchange fees can run as high as 5 percent for these corporate “card not present” transactions. Physicians are often unaware of these high fees when accepting VCC payments.   

Unlike traditional credit card payments received from patients, the processing fees for VCCs do not come with corresponding benefits. Patient credit cards ensure physician payment by shifting patient debt collection responsibility to the credit card companies. This helps eliminate the risk of bad debt that plagues physicians’ practices. VCCs do not offer risk reduction for physicians but instead carry increased processing charges. Meanwhile, credit card companies often offer health plans up to a 1.75-percent rebate for paying physician and provider claims with VCCs.   

  • Electronic funds transfers are similar to direct deposit offered by many employers. Automated clearinghouse (ACH) EFT is a funds transfer tool in which payment is processed over the ACH Network, a payment system implemented by the National Automated Clearing House Association. Unlike percentage-based interchange fees associated with VCCs, ACH EFT payments are subject only to a standard transaction fee (approximately 34 cents) regardless of payment amount. As shown in AMA’s table on the next page the difference in processing fees can have a substantial impact on physician payment. As of Jan. 1, 2014, the U.S. Department of Health and Human Services required all health plans to use ACH EFT to pay physicians that request and register for this payment method.   

Plans, however, may require other payment methods, such as VCC, within their contracts with physicians to avoid using ACH EFT.[33

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Although EFTs may seem to be a better alternative than VCC, EFT payments are not without their downside. A health plan may stipulate that if the physician accepts payment through an EFT, he or she has to accept the amount of the EFT as “acceptance as payment in full.” This notation impacts the physician’s ability to appeal an incorrect payment from the health plan or collect any additional amounts due from the patient, if applicable. (For more on EFT problems, see Section 5: Repeal Harmful and Onerous Federal Regulations.)

Workers’ compensation 
Texas employers expect their employees’ work-related injuries to be treated appropriately and efficiently. Injured workers should be able to receive clinically appropriate and affordable health care quickly and without having to travel too far. Treatment for injured workers must be clearly defined, fair, easy to understand, accountable, and easily accessible.  

Acknowledging that physician participation is crucial to the success of the workers’ compensation system, the Texas Department of Insurance-Division of Workers’ Compensation (TDI-DWC) has taken steps to reduce and stabilize costs, and improve injured workers’ access to quality care and return-to-work outcomes while minimizing administrative complexities. These steps include the adoption of:   

  • Fair fee guidelines for professional services, inpatient and outpatient hospital services, and ambulatory surgical center services; 
  • Science-based treatment and return-to-work guidelines for non-network claims; 
  • Certification and monitoring of workers’ compensation health care networks; 
  • Rules to streamline dispute resolution; and 
  • Rules to streamline preauthorization requests.   

Despite these improvements, barriers still exist that prevent physicians from treating injured workers. One area is in DWC’s designated doctor program. 

Designated doctors make recommendations about an injured employee’s medical condition or help resolve disputes about a work-related injury or occupational illness. In the past two years, physician participation has dropped dramatically due to changes in state law in 2011. Doctors were previously allowed to schedule as many as five designated doctor exams when they traveled to locations away from their practice. Now, they can schedule only one exam. The time away from a physician’s office to perform only one designated doctor examination is usually cost-prohibitive. 

Insurance companies also frequently question the medical necessity of care physicians provide to injured workers. These determinations are being made by nonphysicians who don’t have the training or expertise to reach such conclusions. TMA continues to advocate for actual peer-to-peer reviews of medical necessity for surgical procedures. It is critical that actual physicians, not other health care professionals without the equivalent medical training, review physician recommendations for treatment. 

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  • Require health plans to clearly differentiate on their enrollee ID cards when the patient bought coverage through the Affordable Care Act exchange and whether the coverage is a subsidized exchange plan.

  • Require any insurance product (sold inside or outside the health insurance exchange) that uses a “narrow” or “limited network” to publicly disclose this network structure up front as well as any corresponding limitations to consumers and physicians.

  • Prohibit health plans from imposing “acceptance as payment in full” notations on any electronic funds transfer or checks that are deposited without knowledge of the notation.

  • Recognize the private nature of contracting by keeping physicians’ negotiated contract rates with health plans proprietary. 

  • Eliminate barriers to physician participation in the Texas workers’ compensation system.

  • Ensure that peer reviews of physicians in the workers’ compensation system are performed by physicians, not by providers without equivalent or appropriate training and education.

 


Healthy Vision 2020

 


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    They should reinstate Medicaid payments so patients can have a better treatment

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