TMA Testimony by James Humphreys, MD
House Insurance Committee
House Bill 2838
April 2, 2013
Good afternoon, Chairman Smithee and members of the committee. My name is James Humphreys, and I am a pathologist in San Antonio and member of Texas Medical Association’s Council on Legislation. On behalf of the TMA and 47,000 physicians and medical students, I would like to thank the chair and committee members for the opportunity to respectfully testify today in opposition to HB 2838 by Chairman Smithee.
Our opposition today is not to transparency in general or to the disclosure of a quote or estimate. Rather, we are concerned about the impracticality of compliance in some circumstances and the impossibility of compliance in others. TMA has policy that supports transparency but not approaches that are administratively burdensome or that require forfeiture of funds or payment for noncompliance — especially when it is impossible to foresee or predict in advance all the services that will be needed.
You have heard that purchasing medical care is analogous to purchasing a loaf of bread, a tank of gas, and even a bag of potato chips. I can assure you that neither the members of this committee nor any of the patients for whom I examine specific tissue samples or body parts want me to consider my evaluation of their tissue samples to be similar to or as common as any of those product purchases. Nor should you consider your specific diagnosis or treatment approach to be as common as those comparisons would seem to suggest. You are not a widget.
The individual nature of medical conditions, coupled with the highly variable nature of insurance coverage and benefit design, make it impractical for any physician in my specialty, or any physician for that matter, to provide a binding quote or otherwise forfeit all or a portion of a payment.
The bill REQUIRES a health care practitioner licensed to provide health care services in this state to disclose to the patient the price that will be accepted as payment in full for the service and to provide that in writing at least 48 hours before providing the service(s). It appears the way this is written, physicians must know in advance who they will be providing services to and provide that quote in writing prior to services rendered or forfeit any payment that would be the patient’s responsibility, which could be all or a portion of the payment not made by the plan.
Also, as written, the bill seems to dismiss the immediacy that is at times present even in “routine,” planned procedures. For example: During an elective, planned gall bladder removal, the surgeon notices a suspicious mass on a lobe of the liver. He biopsies the mass and sends it for interpretation. The bill as written would disallow the pathologist to bill and collect for that unforeseen service based on any initial quote previously provided to the patient.
As a pathologist, I could not comply with the 48-hour timeframe and provision of a written quote in the bill if it passed. It is rare that I have any interaction, face to face or otherwise, with the patients for whom I provide services. For example, on any given day, I receive a list of patients that are on the surgery schedule. This list contains the patient’s name, patient ID number, and the procedure being done. During the course of the day, for those surgeries to which I am assigned, I will begin to receive tissue specimens sent to me from those operating rooms. I am neither provided nor aware of the billing or coverage information of the patient at the time I am performing the service, nor would it matter. Regardless, I evaluate those specimens accordingly and provide my services and reports to all the appropriate parties. All this is well before I am given any patient billing or coverage information and well before any payment is received.
Sometimes while the surgery is actually in progress, especially for tumor removal, I will be asked to evaluate multiple tissue specimens as a tumor is being removed. This is to make sure that the tissue margins around the tumor are clean and clear. This lets the surgeon know while the patient is still undergoing surgery if the tumor has successfully been removed or if more dissection needs to be done.
At the time of my services, I typically don’t know if that patient (or patient’s specimen) is covered by a commercial insurer, Medicare, Medicaid, TRS, ERS, TRICARE, Medicaid Managed Care, or Medicare Advantage. What I do know is that the charge [my price] I submit on the claim to each of these payers is the same for the same service, but the payment I receive will be vastly different and is largely determined by the benefit design of the insurance coverage purchased by the patient; my contract rate if I am in-network; or if out-of-network, what the plan decides to pay — and by the way, the out-of-network payment amount is not an amount that is shared with physicians. In addition, patients’ out-of-pocket responsibilities are vastly different, vary from benefit plan to benefit plan, and are even affected by the timing of the service during a year as deductibles are met or not met.
There is no conceivable way to determine or predict all of these services in advance, much less to provide a binding, concrete quote in advance, even if a patient does contact me well before his surgery. Under current law, I am required to provide an “estimate” upon request if the patient is proactive enough to request one, but unlike HB 2838 before you today, current law does not require me to provide a binding quote to each and every patient, then forfeit payment due to my inability to foresee every conceivable service or circumstance. In addition, current law requires the patient to inquire of their health plan, and the health plan to provide, what the health plan will pay and what the patient’s out-of-pocket payment responsibility will be.
What current law (Senate Bill 1731 from 2007) requires is that ANY out-of-network physician must provide an estimate of charges upon request from the patient. In addition, to lessen the impact of unanticipated amounts patients would have to pay under their coverage agreement (See Sec. 1456.004 of the attached Insurance Code, PDF), any out of network facility-based physician, like myself (i.e., a pathologist, radiologist, anesthesiologist, neonatologist, or emergency room physician), is already required to send a billing statement that:
- Contains an itemized listing of the services and supplies;
- Tells the patient the health plan paid a rate below my billed amount;
- Provides a phone number for the patient to call to discuss the statement and payment issues; and
- Tells the patient that he or she may discuss alternative payment arrangements:
- If the balance owed is greater than $200, the physician is required to provide a payment plan and may not furnish adverse information to a consumer reporting agency regarding an amount owed by the patient for receipt of medical treatment, and
- If the amount owed is greater than $1,000, the physician must notify the patient of the availability of a mediation process for those covered by a preferred provider benefit plan.
Although it is after the service has been provided, it is important to note that existing law does address how physicians must assist the patient with larger-than-anticipated out-of-pocket costs and at the same time protect patients’ credit. However, other practitioners do not have the same duty under existing law.
If HB 2838 were to pass in its current form, physicians will likely have to quote their billed charges each and every time for all patients, both insured and uninsured. I say that because:
- As a contracted provider, the health plan does not provide physicians with a complete fee schedule of all the services they will pay for under contract for every payable service, nor do physicians always know whether or not the patient has met his or her deductible. Consequently, physicians would have to quote their billed charge in order to ensure that they would receive, at the very least, all amounts due under their fee schedule and the patient’s out-of-pocket responsibility, or otherwise forfeit.
- If the service requires prior authorization, and indeed the physician obtained prior authorization, physicians would still have to quote their billed charges because the health plan will state that the prior authorization is not a guarantee of payment. So, if the health plan fails to pay or denies any or all of the services after the fact, the only way for physicians to collect on the services provided would be to have quoted billed charges. Otherwise, physicians would have to forfeit those amounts that they had anticipated the plan should have/would have paid under the prior authorization obtained.
- In between the time physicians provide the quote and service(s) to the patient, and the time the claim is considered for payment or is actually finalized, the patient may have become ineligible. Under this scenario, the plan’s payment would be recouped and the physician would be unable to look to the patient for payment. Thus, once again, billed charges would have needed to be quoted to avoid payment forfeiture.
- Lastly, if and when the physician provides an out-of-network service, the amount the physician would have to quote must be his or her billed charge. Physicians will not, at the time of the binding quote, know if the health plan will make an offer to settle the claim or whether the patient lacks coverage, through benefit exclusion.
One other obvious operational challenge that physicians will face if this bill is enacted occurs when the patient is covered by an HMO. Because the HMO contract pays a per member/per month (PMPM) capitation fee, is the capitated physician expected to quote to the patient his or her PMPM, the billed charge, or just the patient’s copay? How will this work to ensure a capitated physician will not forfeit his or her PMPM payment or the patient’s copayment?
Chairman Smithee and members of the committee, it is difficult as you can see to mandate and hold one stakeholder in the market to a binding quote in isolation and expect forfeiture of payment, especially when that stakeholder’s ability to comply with the law is subject to the actions/inactions of other stakeholders. Thank you again for allowing me to testify today. I would be happy to answer any questions.