TMA Readies for Fight Over Network Adequacy
Legislative Affairs Feature - March 2007
By Ken Ortolon
In 2005, the Texas Medical Association fought health plans to a stalemate over network adequacy and balance billing. Now, organized medicine is girding for a rematch as the Texas Association of Business, a staunch health plan ally, says it will take a "hard-line" stance to ban balance billing in this year's legislative session.
But a Texas Senate committee that studied the issue prior to this session declined to recommend such a ban. Instead, it called for both health plans and physicians to do a better job of disclosing to patients that their out-of-pocket expenses may be higher than expected.
Meanwhile, TMA has thrown its support behind legislation in the Texas House of Representatives that requires more transparency in the health care system, sets standards for network adequacy, and ensures that more health insurance premium dollars are actually going toward health care instead of corporate profits.
TMA officials expect these issues to be hard fought, but they want to make sure that employers who are paying the premiums and the patients understand exactly what they're getting for their money.
Who Gets the Bill?
In 2005, several lawmakers filed legislation after constituents complained they were billed for services they thought their health plans should cover. The problem was that while the patients were treated in hospitals and other health facilities that were part of their health plan's network, the hospital-based physicians who cared for them were not.
One of those bills, Senate Bill 1738 by Sen. Robert Duncan (R-Lubbock), originally would have banned balance billing by out-of-network physicians. He eventually dropped the ban from the bill in favor of language requiring patients to be told they might be billed for charges above what their health plan paid.
The measure passed the Senate but failed to clear the House, prompting Lt. Gov. David Dewhurst to direct the Senate State Affairs Committee, chaired by Senator Duncan, to study balance billing and network adequacy during the interim.
The committee subsequently recommended that lawmakers require patients to be told that balance billing is possible, but did not recommend a ban, which Senator Duncan says would have been unfair to physicians.
"If you just ban balance billing, then basically you place the providers there in an inferior position when bargaining for health plans contracts," he said. "We didn't think that was fair."
The committee's recommendations also would increase transparency in the health care system through implementation of a process for disseminating real data on prices of health care services by geographic region. The committee also would grant the Texas Department of Insurance authority to set network adequacy standards.
The report said lawmakers should look into allowing hospitals to negotiate with health plans on behalf of their hospital-based physicians and requiring hospitals and their hospital-based physicians to contract with the same health plans. It also said the legislature should encourage the use of "smart cards" for providers to ascertain enrollees' coverage levels, network status, and health plan specifics that could help decrease balance billing.
TMA President-Elect William W. Hinchey, MD, says most of the recommendations look good in principle, but physicians cannot support giving hospitals the right to negotiate for them.
"All the plans would have to do is hold off and team up with the hospitals," said Dr. Hinchey, a San Antonio pathologist. "It puts any physician group that provides services to a hospital - whether it's pathologists, radiologists, emergency room doctors, anesthesiologists, hospitals, intensivists - at a real competitive disadvantage."
Putting Patients First
While TMA generally supports most of the State Affairs Committee recommendations, the association has endorsed legislation by state Rep. Patrick Rose (D-Dripping Springs). Dubbed the "Putting Patients Before Profits Health Insurance Reform Act," the measure sets clear standards for network adequacy and the percentage of premium dollars that must go toward patient care.
The bill requires health plans to have under contract at least 80 percent of the hospital-based physicians in each specialty practicing in an in-network facility. A plan's network also could be deemed inadequate if it pays more than 20 percent of claims out of network.
The bill also requires insurers to put a minimum of 90 percent of premium dollars toward patient care. Other provisions require physicians, facilities, and health plans to provide more information to patients, such as written estimates of charges, notice that they may be billed for services provided by out-of-network physicians, and lists of any specialties with which the health plan does not have a contract at an in-network hospital.
"We think it's important patients know who's in their network and if their health plan has an adequate network," said Austin I. King, MD, chair of TMA's Council on Legislation. "We don't want people to be surprised when they go to the hospital and then get a bill from the pathologist or the radiologist. We want the patient to understand what it is to be out of network and that it's not the fault of the physicians but is a problem with their plan failing to negotiate in good faith to bring physicians into their network."
While they see increased disclosure as an important step, TAB says it will still push for an outright ban on balance billing.
"It is a hard-line position, no doubt, but we don't want to see the consumers in the middle," said Shelton Green, TAB government affairs manager. "Regardless of whether physicians have a contract with a plan, if they see a patient who is a member of that plan, they're still going to get paid something, whether it's usual and customary charges or some percentage of billed charges."
Dr. King argues that usual and customary is "absolutely laughable" because the plans, themselves, decide what constitutes usual and customary.
"If you banned balance billing, you would really destroy hospital-based physicians' ability to negotiate with plans at all. You're saying you have to take whatever the plan decides to pay you, and that's it."
Ken Ortolon can be reached by telephone at (800) 880-1300, ext. 1392, or (512) 370-1392; by fax at (512) 370-1629; or email Ken Ortolon.
March 2007 Texas Medicine Contents
Texas Medicine Main Page