State insurance regulators have taken action against a silent PPO, fining Great-West Life & Annuity Insurance Co. $8,000 for inappropriate physician discounts on claims.
A Texas Department of Insurance (TDI) order says the company, recently purchased by CIGNA, violated the state insurance code because it applied discounts to out-of-network claims when it was not contractually allowed to, or was not given authority to access discount information, or did not notify physicians before taking the discounts.
The order says Great-West "does not dispute that they applied PPO discounts on out-of-network claims. Great-West has indicated, for example, that they applied a … discount on approximately 11 out-of-network claims in February 2006."
TDI investigator Mike Jackson said the agency began probing silent PPOs after receiving numerous complaints from physicians.
During the 2007 legislative session, TMA supported House Bill 839 by Rep. Craig Eiland (D-Galveston), but the bill never made it to the House floor for debate. Had it passed, TDI would have the authority to pursue not only the insurer, but also the secondary networks that are inappropriately leasing, selling, or brokering the physician's discount he or she negotiated only with the insurer.
TDI is undergoing the "sunset process" before the 2009 legislative session. In its self-evaluation to the Sunset Commission that reviews agency activity, TDI recommends broadening its regulatory authority to give it jurisdiction over secondary networks involved in discounting activity without a physician's knowledge or consent. TMA strongly supports this recommendation.
In addition, TMA is working with the American Medical Association and other state associations on possible model language to be incorporated into Texas legislation for the 2009 session. Regulation of secondary networks is one of TMA's insurance policy priorities this upcoming legislative session.
Public Information Officer John Greeley says TDI previously fined UniCare Life and Health Insurance Co., and Humana $15,000 and Metropolitan Life $5,000 for improperly applying network discounts to providers.
"In these instances, the carriers may have accessed discounts that the health care providers in the PPOs may not have anticipated or approved through a direct contract with the carrier," a November/December 2007 TDInSight article said.
Action , May 16, 2008