Balance-Billing, Step Therapy Measures Highlight Insurance Wins for Medicine
Charting the Texas Legislature: Insurance — August 2017
Tex Med. 2017;113(8):27-29.
By Joey Berlin
Balances left on medical bills and unwarranted changes to medication: Those are just two of the ways in which health insurers can and do make life difficult for patients and physicians throughout Texas.
Two bills that the Texas Medical Association backed this legislative session — and that earned Gov. Greg Abbott's signature — won't eradicate those problems in Texas. But they should create some relief from the headaches that those two issues have caused throughout the years.
Under one measure, mediation for balance billing will become available to more patients in a much wider array of care settings, giving them a much-needed recourse while preserving a physician's right to be paid for his or her services. Under the other, a physician's judgment on whether specific medication is working can more quickly override a health plan's efforts to cut costs through step therapy mandates.
Those changes, which essentially take effect on Jan. 1, 2018, highlight a highly successful session for medicine concerning insurance.
Beaumont anesthesiologist Ray Callas, MD, who served as chair of TMA's Council on Legislation during the regular session, gives medicine a high grade for its legislative work on insurance, both for beneficial bills that passed and bad bills that bit the dust.
"If you were going to score it [on] a zero-to-10 scoring system, I would give it probably an 8.5," Dr. Callas said. "I think we moved the needle forward in order to protect patients and to hold insurance companies accountable."
Mediation for Many More
In the midst of widespread patient anxiety and publicity over unexpected medical bills, the House of Medicine worked diligently to address surprise billing situations.
Senate Bill 507 by Sen. Kelly Hancock (R-North Richland Hills), which Governor Abbott signed on May 23, built on the gains Senator Hancock made with a 2015 law that lowered the threshold for many patients to initiate balance billing mediation. (See "No More Surprises," May 2016 Texas Medicine, pages 26-36.)
SB 507 maintains the current threshold of $500 after copayments, deductibles, and coinsurance and expands mediation to all physicians and other practitioners who provide out-of-network services at certain in-network facilities — namely, hospitals, birthing centers, ambulatory surgical centers, and freestanding emergency departments. SB 507 also expands mediation to out-of-network emergency care. The new law adds patients covered by the Teacher Retirement System of Texas.
The legislation requires health plans and practitioners who send a bill for out-of-network services to include a "conspicuous plain-language explanation of the mediation process."
Dr. Callas, who was also a member of TMA's Task Force on Balance Billing, which studied the issue last year, says SB 507 answers the interim charge assigned to the Senate Business and Commerce Committee last year to make recommendations to protect patients from surprise billing.
"Even the health plans testified … that the mediation process is working," Dr. Callas said. "The mediation process will continue to work as long as we give it a chance to work. I know we don't have the volume that we need to see, but so far, so good."
In testimony delivered to the committee in March, Dr. Callas noted that mediation had been working well and had served as a "tremendous patient protection with the narrowing of insurance networks." In 2010, Dr. Callas noted, there were just 14 requests for mediation. In 2016, there were 1,677 requests.
"Because mediation is working, we are happy to see the mediation process protected, as the initial informal conference call is where 95 percent of disputes are resolved. We feel maintaining this process is in the best interest of the patient to have a timely resolution of an out-of-network balance bill," Dr. Callas said. "Furthermore, requiring both the insurance company and the health care providers to notify the patient on how to request mediation, using simple, standard language on both the explanation of benefits and billing statements, is better for the patient."
TMA lobbyist Clayton Stewart says SB 507 offers significant protection for both physicians and patients, allowing a safeguard for doctors to bill for their services when a health plan's coverage falls short.
"I think it's going to give patients more of an opportunity than ever to really dispute their bill if they feel that they need to," he said. "It's a great education piece as well, because during that informal conference call, when most of this is being resolved, the patient's learning more about their health plan and what's covered, what's not covered, [and] why they did get the balance bill."
Denton obstetrician-gynecologist Joseph Valenti, MD, who also was a member of TMA's balance billing task force, says that although SB 507 addresses many of the issues with surprise billing, patients continue to be unaware of the problem of narrow insurance networks.
"People need to know what their rights are," he said, referring to SB 507's requirement that notice of possible mediation be written in plain language. "That being said, they also have to understand that there are a lot of doctors who want to be in network who can't be for various reasons: because panels are closed or networks are very narrow to decrease costs. That's something that insured patients need to complain to insurance companies about."
One other TMA-backed measure of Senator Hancock's to address surprise billing, Senate Bill 2210, passed the Senate but didn't make it out of the House Insurance Committee. As filed, SB 2210 would have required health plans to update their network directories every two business days, instead of the current requirement of every month. Inaccurate or outdated health plan practitioner directories can lead to surprise bills because patients don't know who is in a plan's network. The failure of that bill was the main reason Dr. Callas graded the session an 8.5 for medicine's insurance interests.
"If we would've gotten that, I would say we would've had a 9.5 or 10 for this session," he said. "But we will continue to work on Senator Hancock's legislation this interim in order to try to get a live directory up and running, so patients can benefit and physicians can benefit, in that regard, so they can know who they can refer … to another in-network provider."
TMA examines why surprise bills occur and recommends policy changes to address them in a recent white paper. (See "The Truth About Surprise Bills.")
A Big Step Forward
If a patient's prescription medication is working, a health plan's step therapy protocols are no reason to switch the patient to another drug. That's the medicine-backed basis of Senator Hancock's Senate Bill 680, which also earned Governor Abbott's signature in late May.
A step therapy override allows a physician to continue prescribing an effective medication even if an insurer's step therapy plan calls for a change. Under SB 680, a health plan generally has three days to determine whether to approve a physician override. The current process can take as many as 53 days. The bill also prevents patients from having to go through the step therapy process a second time if their coverage changes.
Austin hematologist-oncologist Sylvia Jaramillo, MD, testified for TMA on SB 680 at a Senate Business and Commerce Committee hearing in March.
"Step therapy is a tool that insurance companies use to manage utilization of high-cost drugs by mandating the use of low-cost alternatives first, and only allowing patients access to higher-cost drugs after failure of the first drug," Dr. Jaramillo told the committee. "This can increase risk and expose patients to potentially ineffective treatments. This can cause delay in access to appropriate care, which ultimately affects patient outcomes."
She told the committee that health plans often apply step therapy mandates to patients with blood disorders and cancer, and they're also commonly implemented in iron replacement for anemic patients. Lower-cost iron products mandated by step therapy protocols can cause throat closures, allergic reactions, and heart attacks, Dr. Jaramillo said.
"While sometimes step therapy sounds reasonable," she told the committee, "it can be very dangerous."
Senator Hancock said it was a physician-legislator, Rep. Greg Bonnen, MD (R-Friendswood), who brought the issue to his attention. Representative Bonnen introduced the physician-override measure in the other chamber, via House Bill 1464.
"Nobody wanted to admit that these issues were taking place, but then they didn't want you to fix them," Senator Hancock said. "And it [involved] crafting something that was fair and looking out again for those patient-constituents' interests ― making sure that once they found a protocol that worked, that just because their company changed insurance or they changed insurance, they didn't have to go backward in their care."
Another TMA-supported insurance measure that passed both chambers was Senate Bill 1076 by Sen. Charles Schwertner, MD (R-Georgetown), which mandates that a patient will pay the lesser cost between the patient's copay and the cost of the prescription. Governor Abbott signed that bill in mid-June.
Bad Bills Fail
Medicine's advocacy also was instrumental in halting detrimental insurance-related legislation. A large-scale push from TMA members in May helped stop what would have been a devastating and unique overregulation of the business of medicine. House Bill 4011 by Rep. Dustin Burrows (R-Lubbock) would have restricted a physician's ability to report a nonpaying patient to a credit reporting agency. To make such a report, under HB 4011, a physician would have had to receive a signed disclosure form from the patient with an itemized statement of the amounts to be billed for nonemergency medical services before those services were ever provided.
HB 4011 would have applied to hospitals and other health care practitioners as well. But almost 800 TMA physician members contacted their representatives opposing the legislation, leading to its overwhelming defeat on the House floor in early May.
Similarly, Senate Bill 2127 by Sen. Larry Taylor (R-Galveston) also failed to advance. That bill would have prohibited credit reporting agencies from including on credit reports a collection account for certain health care services provided by out-of-network physicians.
And HB 1675 by Rep. Dan Flynn (R-Van) would have made it more difficult for physicians to opt out of receiving payment by virtual credit card. In April, Dr. Callas told legislators that HB 1675 made it unclear how physicians would know they had the right to opt out and how they would exercise that right.
“With the number of claims that physician practices process, this would be overly burdensome and force some into a payment method they would not otherwise choose," Dr. Callas said in written remarks.
Looking ahead to what could come in future legislative sparring with insurance companies, Mr. Stewart says medicine has to realize that health-plan corporations present a "tough battle" for individual physicians and medical practices.
"But together, there's a lot of power in physicians to really fight off the insurance companies,” he said. “And I think that we had an extraordinarily successful both defense and offense this session in the insurance realm."
Joey Berlin can be reached by phone at (800) 880-1300, ext. 1393, or (512) 370-1393; by fax at (512) 370-1629; or by email.
The Truth About Surprise Bills
Connect the dots between insurance companies' business practices and the stressful surprise bills patients get in the mail in the TMA white paper "The Truth About 'Surprise Bills': How Health Insurance Company Practices Leave You Without the Coverage You Thought You Bought." The paper explains the factors involved in surprise billing in language written for laypeople, journalists, and policymakers. To download the white paper, and easy-to-understand handouts for patients, visit the TMA website.
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