This is an excerpt of Aetna‘s weekly Legislative Update:
TEXAS: All industry stakeholders were invited to attend a meeting last week with Senate leadership and the Commissioner of Insurance to discuss a proposed solution to the balance billing issue. The Commissioner laid out a multi-pronged approach that included the following proposed requirements: Carriers must negotiate in good faith toward the development of a statutorily defined “adequate network”; carriers must provide enrollees with notice before terminating contracts with hospital-based providers; carrier contracts with hospitals must prohibit exclusive contracts with hospital-based providers or prohibit balance billing where exclusive contracts are in place; noncontracted providers must coordinate with hospitals to provide good faith estimates to insureds prior to services being rendered; hospitals must assign contracted providers to patients covered by their carrier when possible; hospitals must give carriers 60 days notice prior to termination of hospital based provider contracts; if a carrier has five days notice of a procedure likely to involve balance billing, it must attempt to reach an agreement with the provider and provide insureds with information regarding its offer, the provider’s counter and anticipated balance bill to the insured prior to the procedure; if a carrier receives an estimate from an out-of-network provider prior to services rendered, the carrier must pay billed charges, and the provider’s rates will be published in a rate survey provided to consumers; where no estimate was provided to the insured, carriers may pay up to 125 percent of Medicare, accompanied by an offer to pay for binding mediation. All stakeholders were invited to provide feedback to the Commissioner regarding his proposal, which ultimately will require legislation.
Our Comments: PPO’s have successfully insulated the consumer from the reality of health care costs. The fear of balance billing is a good sales tactic utilized by those in the industry that are profiting from the system. The only thing PPO’s guarantee is the promise of no balance billing.
I am convinced, through two years of study and review of our health care delivery system, that we can cut medical costs by up to 50% or more by getting away from PPO networks and working directly with medical care providers. Rather than allowing others to set prices for medical care, we should set prices that are fair and reasonable, and transparent.
Competition needs to be introduced into the health care delivery system. A very good example of this is the case of a specialist we approached seven months ago. We invited the physician group to enter into a direct agreement with a client of ours at 115% of Medicare. They refused, stating that they were getting on average 185% – 225% of Medicare from the carriers. Then, just last week, they called wanting to sign an Agreement. Seems two employees of the employer, needing services, had told the provider that they would seek treatment elsewhere.
We have an incredible story regarding a group that eliminated their PPO plan last year – the plan savings were astounding. As a result, the plan is now considering removing their calendar year deductible completely and other benefit improvements.