Require Timely Updates to Network Directories

TMA Testimony by John Scott, DO

House Insurance Committee
House Bill 1880 by Rep. Sarah Davis

April 9, 2019

Mr. Chairman, members of the subcommittee, my name is Dr. John Scott and I am a practicing anesthesiologist from Keller, Texas. I am testifying on behalf to the Texas Medical Association and its almost 53,000 members across the state of Texas and the Texas Society of Anesthesiologists in support of HB 1880.

In a recent TMA survey, physicians were asked why a health plan terminated their contract. A health plan narrowing their network was one of the top responses. 42% appealed the termination and of those who appealed only 7% 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% to 31% and 30% 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% of physicians in this category did receive a contract but said it was an unacceptable offer.  

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

HB 1880 will help prevent out-of-network bills through proper consumer information but will also help in ensuring insurance companies have adequate networks.  While the bill as substituted does keep the 30 day update for directories intact, it does require that upon notice of contract termination by a health plan that an update must be made to reflect this change, in the directory within two days of the effective date of the change.  Additionally, in an era of more surprise bills due to the narrow networks of health plans, this information being accurate leads to be another tool in the toolbox of consumer protection.

HB 1880 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 non-compliant health plans at the cost of the health plan.  

HB 1880 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 EPO plan at least once every three years, with the cost assessed to insurers.   

The bill also requires TDI to perform network adequacy examinations of networks used by the two insurers that are named in the highest number of mediation requests for the prior year.  We believe these requirements will go a long way towards increasing insurer compliance with TDI’s existing network adequacy regulations. 

The bill allows TDI to conduct an investigation of a health plan if the health plan is making a significant number of terminations without cause and to impose a penalty if the terminations caused, wholly or partly, an inadequate network to be used by the health plan.  

HB 1880 contains extremely important concerns. Last year the Texas Society of Anesthesiologists learned that all of the private anesthesiologist groups in Texas were unilaterally terminated in the middle of their contracts for no cause by Humana leaving over 200 facilities with no anesthesia coverage, including all the hospitals in Austin Texas, even Dell Children’s Hospital. After bringing this to the attention of the Texas Department of Insurance, Humana was fined $700,000 not only for the mass terminations which caused their networks to violate network standards but for failing to notify TDI of the terminations. TDI threatened to revoke their network’s certification in Texas if they did not come into compliance. But TDI would never have known something was wrong if TSA did not bring it to their attention.

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.   

HB 1880 seeks to not only protect the consumer, but also improve network adequacy and the value to consumers of the health coverage they are being sold.   

I thank you for the opportunity to testify and I am happy to answer any questions. 

86th Texas Legislature Letters and Testimonies

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Last Updated On

April 12, 2019