2005 Legislative Compendium: Inadequate Health Plan Networks

 

Balanced Billing Bills Stopped in Their Tracks  |  Balanced Billing Near Misses  | On the Horizon  

HMOs promise their enrollees that they will provide prepaid health care for a premium. However, they often fail to provide an adequate network of primary care physicians in their plans, leaving enrollees with unexpected medical expenses. A number of legislators and their staff have been victims of an unexpected charge and are blaming the one they receive their bill from - the physician.

At the heart of the inadequate networks issue is deciphering who is ultimately responsible for medical expenses incurred out of network. Insurance companies don't want to be held accountable for creating adequate networks or informing their enrollees about adequacy of their plans. In essence, they want to keep breaking their promise to enrollees and surprise them with unexpected expenses, while continuing to post record profits and pay their senior executives millions in salaries and bonuses.

During the 2005 legislative session, more than 175 bills were filed relating to managed care. Among these, the issue that commanded center stage was the prohibition of balance billing by out-of-network facility-based physicians. It was quite a contrast from 2003; the only bill that TMA monitored on balance billing was Senate Bill 1313 by Sen. Leticia Van de Putte (D-San Antonio), which never escaped from the Senate State Affairs Committee. SB 1313 would have prohibited physicians from balance billing patients under any circumstances.

In 2005, the balance billing debate was one of the most contentious issues of the 79th legislative session. Eleven bills were filed relating to balance billing, or more accurately stated, inadequate health plan networks. Of the 11 bills, TMA opposed eight as filed. The good news is that not one of these dangerous bills passed. The bad news is, the issue of inadequate networks is not going away anytime soon. The Senate State Affairs Committee, chaired by Sen. Robert Duncan (R-Lubbock), likely will revisit the topic during the interim, as it did in 2004. 

Senator Duncan authored SB 1738 this session, one of only two inadequate network bills that made it out of committee in the originating chamber. The other bill was SB 698 by Senator Van de Putte. Ultimately, both bills were substituted in the Senate State Affairs Committee and called for more disclosure requirements for health plans and hospitals, rather than a prohibition on balance billing. In the last days of session, both bills died before reaching the House floor.

Balanced Billing Bills Stopped in Their Tracks

Prohibition on Balance Billing

SB 698 by Senator Van de Putte and its companion bill, HB 2665 by Rep. Senfronia Thompson (D-Houston), limited the ability of noncontracted physicians to balance bill enrollees for charges not paid by the health plan. SB 698 would have prohibited facility-based physicians and health care providers from billing enrollees for out-of-network health care services and force physicians to take the "usual and customary rate" assigned by the patient's insurance plan. Physicians would be allowed to bill only if they provided proper notice to the enrollee, before services were rendered, that they were not in the network.

TMA argued that balance billing is a symptom of health plans' failure to provide adequate physician networks so their beneficiaries can be treated by in-network physicians. SB 698 was amended to require health plans, hospitals, and physicians to tell patients they might be billed for portions of noncontracted facility-based physician fees not covered by the health plan.

Consumer Right to Know Act

SB 1738 by Senator Duncan and Rep. Carl Isett (R-Lubbock) would have 1) broadly defined "facility-based physician" to apply to any physician who provides services in a health care facility; 2) prohibited balance billing of the patient if the physician accepted the plan's "usual and customary rate" (which is set at the whim of the health plan); and 3) prohibited balance billing even when the physician did not accept the health plan's "usual and customary" rate if the physician didn't tell the patient in advance he was out-of-network. The bill also placed certain disclosure requirements about physician network participation on facilities and physicians, with no similar requirements for health plans.

The Texas Association of Business and the Texas Association of Health Plans (TAHP) strongly supported the bills and helped draft them. After considerable advocacy by organized medicine, SB 1738 evolved into a disclosure requirement of certain information to patients and consumers. Health plans and facilities would have been required to provide notice that 1) some facility-based physicians (amended to be defined as radiologists, anesthesiologists, pathologists and emergency department physicians) might not be included in the health plan's provider network, and 2) a facility-based physician not included in the health plan's network could balance bill the patient for amounts not paid by the health plan.

Facility-based physicians would have been required to furnish an itemized billing statement of the services provided when billing a patient for amounts not paid by the patient's health plan. SB 1738 also would have required facility-based physicians to provide a telephone number that the patient could call to discuss alternative payment arrangements. The patient also needed to be informed that she could file a complaint against the physician with TSBME. In addition, physicians would have been required to allow patients with outstanding amounts greater than $200 to set up a payment plan, and would have been prohibited from furnishing adverse information to a consumer reporting agency regarding amounts owed by the patient for one calendar year from the first statement date.

Facility-based physicians violating the SB 1738 requirements would have been grounds for TSBME taking disciplinary action, ranging from a public reprimand to an administrative penalty, to the possible suspension of a physician's license to practice medicine.

Balanced Billing Near Misses

Two bills were filed that would have steered the debate from physician balance billing to holding insurance companies more accountable. HB 2279 by Rep. Dawna Dukes (D-Austin) and its companion, SB 1516 by Sen. Robert Deuell, MD, (R-Greenville) would have established criteria for network adequacy and would have forced plans to initiate mandatory mediation with noncontracted physicians. This bill would level the playing field when it comes to the network negotiating table. It clearly defines an  "adequate network" and outlines the requirements for completeness and timeliness of services to be provided; it places penalties on "networks" that fail to negotiate in good faith to achieve an adequate network. "This only makes sense; health insurance plans promise enrollees coverage for health care, and they need to provide adequate networks that don't hit the patient with unexpected medical expenses for necessary out-of-network services," stated Representative Dukes. "The Medical Coverage Assurance Act requires networks to truly be networks that provide what they promise."

HB 2299 authored by Rep. John Smithee (R-Amarillo) would have encouraged HMOs and PPOs to develop adequate networks of physicians and providers for their enrollees. If a patient incurs charges, the HMO or PPO would be required to pay the full amount charged by a noncontracted physician. In essence, it would have required insurance plans to keep their promise to provide or arrange for health care. It would have required health plans to pay billed charges for out-of-network services.

On the Horizon

Because the issue of inadequate health plan networks more than likely will be revisited in the 2007 legislative session, TMA has the opportunity to reframe the debate from the onset, positioning physicians in a favorable light and holding insurance companies accountable for shifting their financial risk to physicians and Texas patients. Over the next 18 months, a special Ad Hoc Committee on Managed Care and Insurance will direct this effort. The ad hoc committee will conduct research and gather data necessary to reframe the issue from one that prohibits noncontracted physicians from balance billing to one that focuses on strengthening the requirements for health plans to create and maintain adequate networks. The committee will examine the financial advantages and perverse incentives health plans have to maintain inadequate networks ─ networks that prevent access to basic health care services for those insured by their plan. The committee will partner with specialty societies affected by potential legislation.

Inadequate Health Care Networks Staff Contacts:
  • Hilary Dennis, Legislative Affairs, (512) 370-1370
  • Teresa Devine, Health Care Financing, (512) 370-1415
  • Lee Spangler, JD, Office of the General Counsel, (512) 370-1337

 

 

 

 

 

 

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