Enforce Network Adequacy

TMA Testimony by Ray Callas, MD

Maintaining Network Adequacy
In SUPPORT of HB 3911 by Rep. Hubert Vo
House Insurance Committee

April 2, 2019

Thank you, Mr. Chairman and Committee Members for allowing me to testify today. My name is Dr. Ray Callas and I am an anesthesiologist from Beaumont/Houston, Texas. I am a member of the Texas Medical Association’s Board of Trustees and today I am testifying in support of House Bill 3911 on behalf to the Texas Medical Association and its nearly 53,000 members across the state and the Texas Society of Anesthesiologists. 

I would like to thank Representative Vo for filing this legislation to make sure Texas patients get the adequate insurance networks they deserve. HB 3911 seeks to strengthen network adequacy oversight of health plans by allowing the Texas Department of Insurance to proactively examine PPO networks the same way HMO networks are examined. 

In a recent TMA survey, physicians were asked why a health plan terminated their contract. A health plan narrowing its network was one of the top responses. 42 percent appealed the termination, and of those who appealed only 7 percent were successful. Data from 2010 to 2018 shows that the number of physicians receiving a contract when attempting to join a network has dropped from 47 percent to 31 percent; 30 percent of the time physicians are told by a health plan that their network is full, or they are not enrolling new physicians. I will also add that 21 percent of physicians in this category did receive a contract but said it was an unacceptable offer. 

Overall, the median number of managed care contracts a physician has continues to decline. Physicians want to be in-network. When in network they receive a patient base for care, they do not have to chase down their payments, and a health plan is subject to prompt pay penalties. 

Last year the Texas Society of Anesthesiologists discovered that Humana unilaterally terminated all private anesthesia group contracts mid-contract. There was no dispute over rates; in fact, several groups offered to lower their rates, but Humana was not interested. This left over 200 facilities in Texas with no anesthesia coverage with Humana, including the children’s hospitals in Austin and San Antonio. It also meant that the only coverage for anesthesia was at academic hospitals in Houston, San Antonio, and the DFW Metroplex. Humana did not notify the Texas Department of Insurance nor did it update its directories of this huge drop in coverage. Ultimately, Humana was fined $700,000 for its blatant disregard for state network adequacy laws but also for its misleading information to the Texas Department of Insurance and to its enrollees. It was required to come into compliance or lose its certification in Texas.

We believe Representative Vo’s bill will assist in strengthening network adequacy oversight and ensure the patients of Texas are receiving the coverage for which they are paying.

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Last Updated On

April 02, 2019