Texas Medical Association: Testimony House Criminal Jurisprudence
House Bill 4385 by Representative Vaught
April 7, 2009
By: Jerry Hunsaker, MD
Good morning. My name is Jerry Hunsaker, MD. I am an ophthalmologist from Corpus Christi. Today, I am testifying on behalf of the Texas Medical Association representing nearly 44,000 physicians and medical student members.
I would like to thank Chair Fletcher and the committee members for the opportunity to testify in support of House Bill 4385.
Why Texas Patients Need HB 4385?
According to the Texas Department of Insurance (TDI), more than 17.5 million Texans are covered by insurance. Most insured Texans pay higher insurance premiums and co-pays for the ability to choose a physician of their choice outside of the health plans’ network.
However, it has been discovered that some health insurance companies use tools that push more cost onto patients for out-of-network care. In January 2009, after a year-long investigation, the New York attorney general (AG) found that “insurers unfairly saddle patients with too much of the cost of out-of-network care.”
The centerpiece of the investigation was Ingenix, Inc., a wholly-owned subsidiary of UnitedHealth Group. Ingenix compiles schedules that many large health insurance companies, including those here in Texas, use to determine “usual and customary” and/or “maximum allowable” rates for out-of-network care.
The New York AG found that the Ingenix databases understated the market rate for health care services by up to 28 percent across the state of New York. Nationally, this may translate to at least hundreds of millions of dollars in losses that take the form of increased out-of-pocket costs for consumers over the past 10 years. The AG’s report described the industry calculations as “created in a well of conflicts” that produced information that was “unreliable, inadequate, and wrong.”
According to a recent TDI report, approximately 25 different health insurance companies use the Ingenix database products in some manner. Other companies offer the same or similar data to health insurers in Texas as well. However, there is little or no understanding of how insurers use this data to determine their usual and customary or “maximum allowable” payment for out-of-network services.
The use of databases in health insurance claims settlement has also come to the attention of Congress. On March 31, the United States Senate Committee on Commerce, Science and Transportation heard testimony from the AMA, United HealthGroup, Ingenix, and the NY Attorney General. The result was a call for the federal inspector general to determine the number of federal employees who might have paid too much for out-of-network health care and an inquiry of the 25 largest insurers about their practices.
HB 4385 would protect Texas patients
HB 4385 is good for Texas patients. In these tough economical times, every health care dollar counts. Texas patients need protections to ensure that they are not paying any more than necessary for their care and that their out-of-network claims are settled fairly. The practice of using databases or other technology to improperly deny or reduce a patient’s insurance benefit should not be acceptable conduct in Texas.
Closing
Chair and members of the committee I ask on behalf of the Texas Medical Association and our patients, that you please support HB 4385. Thank you again for the opportunity to testify. I will be happy to answer any questions that you may have.
Last Published: 4/13/2009
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