TMA Testimony by Sara Austin, MD
Senate Committee on Business and Commerce
House Bill 1514
May 14, 2015
Good morning, Chairman Eltife and members of the committee. My name is Dr. Sara Austin, and I am a practicing neurologist in Austin. I also am a member of the Texas Medical Association's (TMA's) Council on Legislation. I am here today representing TMA and its more than 48,000 physicians and medical student members. I would like to thank Chairman Eltife and committee members for the opportunity to testify in support of House Bill 1514 and to explain why it is needed. HB 1514 is designed to decrease the challenges and confusion the Affordable Care Act (ACA) has created for both physicians and patients in Texas, plus create opportunities to emphasize the need for personal responsibility in regard to premium payments.
Texas physicians are glad to have more of their patients covered through the ACA marketplace. But that new coverage compounds and highlights the many administrative challenges that physicians and their staff have experienced even before the marketplace existed. Some of the marketplace issues and challenges are:
- How do you distinguish which type of coverage the patient has?
- Is it a private, commercial HMO or PPO product, or is it a qualified health plan (QHP) product?
- Has or hasn't the patient paid the premium?
- Is the patient in a 90-day grace period for payment?
- Is the patient subject to a "narrow" or "limited" network often found in ACA plans?
- Does the patient understand the limitations of the network that came with the level of coverage he or she purchased?
These are just a few of the questions my office staff has to consider for every patient my practice sees. Couple these with the current administrative challenges and the lack of health insurance literacy in general, and you have a very confused health care marketplace for both health care providers and the first-time insured.
Coverage Differentiation Is Not Readily Apparent
Many insurers offer products both inside and outside the exchange. Those products can encompass:
- Traditional, commercial HMOs and PPOs sold outside the exchange, and
- Qualified health benefit plans (QHP-HMO and QHP-PPO plans) purchased both outside the exchange and through the exchange.
First and foremost, the physician office needs to be able to readily differentiate by reading the patient's identification card whether the coverage is a private commercial plan, a QHP purchased outside of the exchange, or a QHP that is purchased through the exchange. It is important that a physician's office be able to discern what level of coverage each patient has, as well as whether or not the coverage may be subject to the 90-day grace period.
Impact of the ACA's 90-Day Grace Period
The importance of knowing whether a QHP is purchased through the exchange stems from the 90-day grace period's impact on services provided to these patients. Under the ACA, some people who purchase their coverage through the exchange also have the benefit of a 90-day grace period to bring premium payments current when they are in arrears. The federal government requires insurance companies to cover services for the first 30 days of the grace period. For the remaining 60 days of the grace period, insurance companies are required to continue providing coverage for services, but are later permitted to retroactively terminate the insurance policy should the covered person not make all unpaid premium payments by the end of the 90 days.
This means insurance companies may demand that physicians return payments the companies made to them for services. Physicians are then left to attempt to collect directly from the patient for those services, which the patient may have received months ago. This is not unlike what happens in the current commercial market today, with retro-terminations for ineligible employees who left employment. However, that time frame is at least limited to a 30-day grace period.
No Consistency in How Insurers/HMOs Identify the Various QHP Plans
Insurers and HMOs are inconsistent regarding identification of a QHP on the patient's ID card, and in some cases, there is a complete omission of whether the QHP was sold through the exchange. Due to this lack of consistency, the physician's practice has to take additional administrative steps in its office work flow. Staff have to stop and contact the insurance company directly to find out if the patient has qualified health plan coverage through the exchange or has purchased coverage outside of the exchange - as opposed to simply looking at the patient's ID card at the time of check-in.
Fourteen insurance companies offer QHP exchange products in Texas. In addition to their commercial insurance products, these 14 alone could represent as many as 64 different QHP offerings under several different exchange products due to the different metal levels (gold, silver, and bronze plans) for HMO and PPO exchange products.
ID Card Samples
Attached are just a few examples of sample ID cards from the various payers (Attachment 1). I challenge you to be able to tell one type of coverage from the other based on these examples. Please note that Aetna does indicate a QHP in the upper right-hand corner of its ID card. This acronym makes it extremely easy to know at a glance that this patient's coverage is not the same as Aetna's commercial product or even the Teacher Retirement System product Aetna administers. As far as the Blue Cross Blue Shield cards, it is almost impossible to discern at a glance what type of coverage in general the patient may have because all the cards are so similar.
You can see how much easier it would be if QHP was placed on all insurer/HMO ID cards as applicable.
Collection Efforts Could Be Minimized and Treatment Uninterrupted
Collection efforts by physician practices are costly, disruptive, and not always successful. In any small business, when a customer receives services or goods but does not pay for them, the charges for those goods and services increase for those who do pay. The same is true for physician offices, and the effect of the grace period may be increases for those who do pay for the services they receive. Having the ID card information easily available will enable physicians and their staff to educate patients about the importance of paying their portion of the premium every month.
This is especially important for physicians who provide medical treatment over spans of more than a month or longer than 90 days, such as in my own neurology practice for chronic conditions like multiple sclerosis and Parkinson's, in obstetrics/gynecology for pregnancies, in oncology for cancer treatments, and in orthopedics for surgery with needed follow-up physical therapy or rehab services.
It is important for physicians and their staff to know this information because exchange plans have out-of-pocket maximums that can affect the collection of copays and deductibles. It will give the physician or his or her staff the opportunity to stress to these patients their potential out-of-pocket costs and another opportunity to stress the importance of continuing to pay their portion of the premium that is not subsidized by the federal government.
What the "QHP" Does and Doesn't Do
There are coverage distinctions when it comes to qualified health plans. Those that are bought outside the marketplace exchange and those that are bought through the exchange. More importantly, 85%-90% of QHP policies purchased through the Exchange are subject to the 90-day grace period. The "QHP" indicator will let the physician office easily identify, the majority of the time, when the 90-day grace period applies. This indicator provides information necessary for the physician to remind patients about the importance of continuing to pay his or her portion of the premium. Otherwise, the insurance policy will be retro-actively terminated leaving the patient uncovered until January 1st of the next year and susceptible to paying for their care completely out of their own pocket.
I urge the committee to support HB 1514. This bill will provide much-needed information and opportunities to educate consumers about the coverage they purchased. More importantly, patients will better understand the impact of that purchase and the responsibilities that come with it. In addition, physician offices will have at their fingertips information enabling them to counsel their patients well in advance of any proposed treatment as well as during that treatment timeframe about the importance of being current with their premium payments. In Medicine and health care we call this a "teachable moment". It is used often for many other situations with patients that we see.
By making timely premium payments:
- Patients, and subsequently their treatment will continue to be covered,
- Insurer/HMO recoupment of payments for services already received will be minimized, and
- The likelihood of physicians pursuing collection from the patient for those recouped amounts will be lessened.
Thank you for the opportunity to testify and provide our perspective. I will be happy to answer any questions.