TMA Tells Legislatures About HB 2256: Health Plans and Transparency

 

Texas Medical Association Testimony: Senate State Affairs for House Bill 2256

May 20, 2009
Presented By: Dennis R. Watts, MD  

Good afternoon, Chairman Duncan and members of the committee. My name is Dennis Watts.  I am a practicing emergency medicine physician in Austin at the Seton Family of Hospitals emergency departments located throughout the city. These include Seton Medical Center, Seton Northwest, and Seton Southwest.  Today, I am testifying on behalf of the Texas Medical Association. I would like to thank Chairman Duncan and the committee members for the opportunity to testify in support of House Bill 2256. The bill provides important patient protections, as well as a mediation venue that doesn't exist today for resolution of disputes regarding out-of-network, facility-based physician claims. TMA appreciates that Representative Hancock recognizes how important it is to:

  • Provide disclosure about a patient's financial responsibility when it is possible to do so appropriately;
  • Provide a resolution process that holds health plans, hospitals, facility-based physicians, and patients accountable;
  • Evaluate the adequacy of networks in local markets; and
  • Evaluate the effects of health plan maximum allowable calculations on patient out-of-pocket costs.

Disclosure
No one likes to be surprised by unexpected out-of-pocket costs. But medicine is not an exact science, and each patient's medical treatment is unique, whether it's an elective or emergent service. When patients opt for an elective service or procedure, facility-based physicians or their representative are more than willing to discuss the patient's potential to receive a balance bill and the amount of that service. In emergency care, however, the Emergency Medical Treatment and Active Labor Act (EMTALA) prohibits me and my fellow physicians from even discussing money prior to caring for the patient, whether he or she came to us through the emergency room or as a direct admit from a physician's office.

We appreciate Representative Hancock's understanding of our limitation in providing disclosure in emergency situations. We also appreciate his sensitivity to the fact that our first duty is to the patient's well being and not to a disclosure mandate.

However, it is important for the committee to know that even for an elective procedure, it is a challenge for us to provide the required disclosure if the patient does not make an effort to find out before a hospital admission or procedure if an out-of-network physician will provide his or her services. Often, a facility-based physician will not even know until just before surgery to which patients he or she will be assigned for anesthesia services, reading x-rays, or examining tissue specimens. By that time, the patient already has had pre-op medication and would not be in any legal state of mind for a disclosure discussion - not to mention how inappropriate it would be for a physician to initiate a disclosure discussion at that time.   

Informal Settlement Teleconference
HB 2256 provides that in situations where the patient has met his or her copay, deductible, and coinsurance; no disclosure discussion has taken place; and the balance bill is greater than $1,000, an informal settlement teleconference is to occur prior to the mediation. That teleconference involves the patient, the facility-based physician, and the health plan. Some physicians today already use this preliminary approach to resolving what the patient may owe, which should reduce the number of mediations that take place . Today patient's face greater financial responsibility through high deductibles and coinsurance percentages. It is important that patients better understand their financial responsibility in context of their coverage, i.e, the value the health plan has decided to place on the service received vs. what the physician charged.

Mediation
Although the bill puts in place a mediation process, we hope that step often is not necessary. The more a patient actively seeks disclosure and takes advantage of the informal settlement teleconference, the less likely a full-blown mediation will follow.

Network Adequacy and Maximum Allowable Reimbursement
The two sections of the bill that speak to network adequacy and the impact of maximum allowable amounts on a patient's out-of-pocket costs are a piece of the puzzle that still must be addressed.

As you know Senator Duncan, from your work on Senate Bill 1731 from last session and the SB 1731 Network Adequacy Workgroup, a patient's out-of-pocket costs for out-of-network services are impacted dramatically by:

  • The adequacy of the health plan's network; and
  • The amount the health plan pays toward the patient's claim based on the health plan's determination of its maximum allowable amount for the out-of-network service.

Even though a plan may have what appears to be the best network with only a fraction of its facility-based physician claims being out-of- network, its determination of how much it pay for those services can cause its enrollees to have greater out-of-pocket costs than the other plans in the same local market. 

In addition, the great variations in what each plan pays out of network in a local market is evidence that how plans decide what to pay for out-of-network services is neither consistent, well understood, nor transparent to the patient.  

Hospital Disclosure of Facility-Based Physicians
Often the patient will seek care from a physician he or she thought - based on information the patient's health plan provided on its Web site - was in-network, when in fact the physician was not. Inaccurate information on health plans' online network lists is a significant problem: relying on this inaccurate information can cause patients to incur additional out-of-pocket costs.

The provision in the bill that requires hospitals to provide the name and contact information for each facility-based physician with privileges at its hospital will help patients understand who might be involved in their treatment during their hospital stay or procedure. Keeping the lists up to date and accurate will be another helpful step to ensure patients are informed.

Conclusion
Senator Duncan and committee members, SB 1731 from last session and HB 2256 you are considering today are good first steps toward making the health care market more transparent. However, it is imperative that health plans be accountable for the integrity of their networks and the data they provide their enrollees. As highlighted earlier, many factors in the health insurance market affect a patient's out-of-pocket costs. More work is needed so all of us - employers, patients, health plans, physicians, and other health care providers - can clearly understand the myriad of issues involved in the delivery of health care and their affect on patients, your constituents.

Thank you again for the opportunity to speak with you. I will be happy to answer any questions.


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