Physicians Call for End to Sneaky “Silent PPOs”

TMA NEWS RELEASE 

Physicians Call for End to Sneaky “Silent PPOs”


March 15, 2013  

A North Texas doctor was shocked last year to discover a health plan was using a discounted rate he had agreed to 20 years ago, in spite of the fact that he had canceled all of his insurance contracts since then.

Dawn C. Buckingham, MD, a member of the Texas Medical Association (TMA) Council on Legislation, shared the physician’s story before the Texas House Insurance Committee. The committee is examining silent Preferred Provider Organizations (silent PPOs), which many doctors and others in health care consider a sly practice. A company listed the doctor as a member of a health plan’s network and offered a discounted rate for the care he provided, without the physician’s permission or knowledge.

Silent PPO activity is evident when an insurer or third-party payer accesses a physician’s contract rate using a secondary or “rental” network. Often such networks do not have a valid contractual relationship with the physician.

Most physicians accept lower rates from health plans to treat the patients enrolled in that particular plan in exchange for potential benefits including the possibility of seeing more patients, and direct, prompt payment. The problem occurs when silent PPOs apply that same lower rate to other contracts (or patient bills) without the doctor’s permission or knowledge.

House Bill 620 by Rep. Craig Eiland (D- Galveston) would regulate these companies or networks that sell, lease, or share physician discounts without the doctor’s knowledge or consent to ensure they obtain express agreement from the physician and provide prior notification of who may access the contract. It would take the “silent” out of silent PPOs.

“Silent PPOs are a huge problem because these networks apply rates physicians might have agreed to with one company, to other companies without the physician even knowing. It confuses patients because they believe they’re choosing a physician who contracted with their health plan and is ‘in network,’ but actually they’re choosing a physician with no contractual obligation to their insurance company,” Dr. Buckingham explained. “We’re looking forward to this regulation so physicians will stop being undersold, patients will stop being misled, and the networks will have transparency in what they’re doing.”

Dr. Buckingham showed the house committee a chart detailing the complex story of Philip Korenman, MD, a Plano psychiatrist, who, along with his patients, is a victim of a silent PPO.
TMA, the Texas Pediatric Society, the Texas Academy of Family Physicians, BlueCross BlueShield of Texas, and the Texas Hospital Association support HB 620. Sen. Charles Schwertner, MD (R-Georgetown), a TMA member physician, will carry the companion bill, Senate Bill 822.

“We see patients every day who get stuck in the middle [because of silent PPOs],” said Dr. Buckingham. “We hear all the time about big surprises you get when you seek medical care and you thought you were doing all the right things within your insurance company, and it turns out they misled you, gave you the wrong information, and now you end up with a tremendous bill.”
“We want to stop this and make sure there’s transparency in the process so patients can make the correct decisions based on accurate information.” She asked lawmakers, “Would this be acceptable behavior in any other type of business in this state?

TMA is the largest state medical society in the nation, representing more than 47,000 physician and medical student members. It is located in Austin and has 112 component county medical societies around the state. TMA’s key objective since 1853 is to improve the health of all Texans.

 

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Contact: Pam Udall
phone: (512) 370-1382
cell: (512) 413-6807
Pam Udall  
Brent Annear
phone: (512) 370-1381
cell: (512) 656-7320
Brent Annear 
 

Visit the MeAndMyDoctor.com blog for interesting health care discussions.

 


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