Texas Medical Association Testimony to Sunset Advisory Committee
June 24, 2008
Presented by: Albert Gros, MD
Texas Medical Association
Good evening. My name is Dr. Albert Gros. I am an OB/Gyn physician from Austin. On behalf of the Texas Medical Association (TMA) and more than 43,000 physicians and medical student members, I would like to thank the chair and members of the Sunset Advisory committee for the opportunity to testify on the Texas Department of Insurance (TDI) and Office of Public Insurance Council (OPIC) Sunset Staff Report.
I want to begin by thanking the Sunset staff for their time, effort, and thoughtful recommendations. Both TDI and OPIC are important state agencies for improving the health of the health insurance marketplace and the health of Texas patients.
As we all know, Texas has more uninsured citizens than any other state in the country. One in four Texans is uninsured. At the same time, Texas leads the nation in population growth, which means that demand for health care is only going to increase. Especially if the demographic trends continue, which point to Texans getting older, less educated, heavier, and poorer. It is critical during this sunset process that we equip TDI and OPIC with the tools the agencies need to ensure that Texas consumers, whether as individuals, small or large employers, or ultimately as patients, have access to quality and affordable health insurance.
The health insurance industry's business practices greatly affect health care consumers - our patients. Health carriers' marketplace conduct also impacts physicians both as small employers and as health care professionals who provide important health care services to patients.
TMA has provided the TDI commissioner and staff, and Sunset staff with many recommendations in the past six months on how to strengthen both TDI and OPIC to better serve the needs of Texas' small businesses and patients. However, today I am going to focus my testimony on only three of these recommendations. The three recommendations I am going to address are the need for the Sunset Advisory committee to:
- Grant TDI authority over the conduct of unregulated preferred provider organizations (PPOs),
- Provide TDI the ability to regulate data mining and pattern recognition by health insurance companies, and
- Give the department the strategic direction and authority to create mechanisms that will help more Texans purchase health insurance.
Regulation of Silent or Rental PPOs
TMA applauds the TDI and Sunset staff for recommending a statutory change that requires all PPOs to obtain a certificate of authority from TDI to operate in Texas. We also applaud the department's suggestion that the legislature set principles for marketplace conduct that must be met in order to keep that certificate.
TMA recommends that when the legislature develops these principles, it address them in a two-step process. The first, to set what the minimum requirements for a certificate of authority should be, then set the minimum for continued corporate behavior.
Because PPOs are merely a network of contracts, before a certificate of authority can be issued, the PPO should have its network certified as adequate and verified by TDI. The physician network should consist of primary care physicians, surgical and medical specialists, and hospital-based physicians such as radiologists, pathologists, and emergency room physicians. Texas must ensure a patient is capable of having his or her basic health care needs met without seeking care out of network. When PPO networks do not live up to their promises to have physicians available and honor the appropriate contracted rate, patients are stuck with unexpected financial responsibilities.
The second step would be to outline marketplace conduct designed to protect the buying, selling, or leasing of a physician or other health care provider's contract rate without his or her permission or knowledge. In addition, inappropriate access to a physician's negotiated rate must be prevented.
Additional regulatory authority over PPO networks will help TDI to ensure consumer claims are settled fairly. It would also protect consumers - our patients - from exposure to medical expenses they did not expect. This is important to Texas' small business employers and patients.
The intent of this broadened authority is to address prevailing market practices used by PPOs (and the insurance companies that solicit the network services and rates) to sell, resell, or lease physician contract rates without express physician authorization and notice, or act as "silent PPOs." You can find examples of these and our recommendations for your consideration in TMA's June 9 written responses for Issue #3, which are in your packets today.
TMA also has created a list of recommendations for your consideration. You can find this list in our written testimony.