Bill Would Address Inaccurate Insurance Directories

Testimony by Ray Callas, MD 

House Insurance Committee
House Bill 2760 by Rep. Greg Bonnen, MD 

April 4, 2017

Thank you, chairman and members of the House Insurance committee for allowing me to testify.

My name is Ray Callas. I am an anesthesiologist from Beaumont, and today I am testifying on behalf of the Texas Medical Association and its now more than 50,000 physicians and medical students. I also serve as the chair of TMA’s Council on Legislation, and today I will be testifying “for” House Bill 2760 as filed.

With increasing use of narrow and inadequate networks by health insurances companies, it is becoming more and more important that:   

  1. Consumers have the provider directory information needed to make the best choice for their health care while avoiding surprise or unwanted bills, and 
  2. The Texas Department of Insurance (TDI) be empowered to increase oversight of network adequacy.

We appreciate HB 2760’s focus on accomplishing these two important goals.

TMA’s physician survey results show:  

  • A 30-percent drop in Texas physicians’ ability to join networks since 2010, and
  • Six out of 10 Texas physicians have found times they were listed as being in network when really they were not, and 56 percent have detected cases where they were not listed in a plan but should have been.

Additionally, it has been reported that more than 300 Texas hospitals do not have even one available emergency physician who is in network with three of the state’s largest health insurance companies. 

For the majority of Texas counties, TDI has approved waivers for several health plans with major network deficiencies in one or more specialty.

I think these data show that now more than ever, it is important for health plans to communicate information accurately about a physician or provider’s network status and for TDI to receive additional authority to examine the adequacy of networks used by health plans. 

With modern technology, there should be no issue in business daily updates to a health plan’s online provider directory.  

HB 2760 also holds a health plan accountable for a pattern of inaccurately representing a provider’s network participation status in a directory by requiring TDI to perform an investigation of noncompliant health plans at the cost of the health plan.  

Furthermore, TDI’s interim testimony on network adequacy on June 1, 2016, revealed the state of Texas has strong network adequacy law and regulations, but enforcement has been difficult with TDI’s limited resources, and narrow networks have become more prevalent in recent years.

HB 2760 empowers TDI to increase its oversight of network adequacy by requiring TDI to perform examinations of the adequacy of networks used by a PPO plan and an exclusive provider organization plan at least once every two years, with the cost assessed to insurers.   The bill also requires TDI to perform network adequacy examinations of networks used by the two insurers named in the highest number of mediation requests for the previous year. We believe these requirements will go a long way towards increasing insurer compliance with TDI’s existing network adequacy regulations. 

The bill also allows TDI to conduct an investigation of a health plan that makes a significant number of terminations without cause and to impose a penalty if the terminations caused, wholly or partly, the health plan to have an inadequate network.  Health plans frequently claim their networks are inadequate because physicians and providers refuse to contract. However, if a network inadequacy is caused by a health plan terminating physicians and providers for no good reason, then TDI should increase its scrutiny of that plan and should not grant it a waiver from network adequacy requirements.  

We feel this legislation will be extremely helpful in informing and protecting Texas patients while helping enforce network adequacy law and regulations.  

I thank you for the opportunity to testify, and ask for your support of HB 2760.

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Last Updated On

April 17, 2018