From the
PRESIDENT
ROBERT “BOB” H. COUCH, MD, MBA
GLMS President | [email protected]
LET'S BE FAIR
A
chill is in the air, so it must mean that
the Kentucky Legislature is in session. This year, we will have the long
session with 60 legislative days in place until
adjournment in mid-April. Even before the
start of the session a number of bills had been
pre-filed, placing issues on the table early.
There are several topics of particular importance to physicians this year, as in every
year. A few items are carryovers from last
year to address concerns that didn’t end with
passage of legislation. One of the major issues
for us relates to fair contracting practices of
insurance companies. I really should call it
unfair contracting practices, but I’m trying
to be positive.
Given the power that insurance companies
have over the livelihood of physicians, concentration of that power through mergers and
acquisitions of insurance companies makes
fair contracting practices imperative. We as
physicians often go through extensive negotiations with insurers when new contracts
are discussed and expect that the material
features of a contract will remain in place for
the life of the agreement. Insurance companies may, however, amend agreements with
physicians only if at least 90 days advanced
notice is provided.
The devil is in the details. Currently, managed care companies are required to notify
physicians about “material changes” to an
existing negotiated contract. These material
changes are defined within the regulation
as “a change to a contract, the occurrence
and timing of which is not otherwise clearly
identified in the contract, that decreases the
health care provider’s payment or compensation or changes the administrative procedures
in a way that may reasonably be expected to
significantly increase the provider’s administrative expense.”
Unfortunately, the only recourse given to
the physician is to withdraw from the plan,
* To listen to Dr. Couch’s article as a podcast or watch the video,
visit our link on www.glms.org.
provided that the physician gives the insurance company written notice of their intent
to withdraw no later than 45 days prior to
the effective date of the material change. The
net effect of all of this is to give physicians
a narrow window to “opt out” of a potentially significant change in their insurance
contracts. If you miss the 45-day deadline
to give notice, you have in essence agreed
to the change.
Herein lies the problem. Insurance companies don’t have to go out of their way to give
notice of significant changes. You could be
notified of a potential 20 percent decrease
in reimbursement, for example, through an
ordinary and characterless letter that arrives
in your office. There are no other requirements for how notice is to be given, other
than that it is to be written. In the course of
a month, my office has hundreds of pieces
of non-descript mail pass through. Most of
it does not make it to my attention. Such is
often the fate of these insurance company
notifications. They don’t have to be special in
any way, and the cynical side of me suspects
that insurance companies go out of their way
to make these notices appear non-descript.
If the notice is overlooked and the physician
does not opt out of the material change, the
contract terms can be amended without any
other discussion at all. This isn’t fair or just.
Physicians should have the ability to accept
a change to a contract, not just let it happen
to them.
The solution is present in one of the bills
pre-filed by Senator Ralph Alvarado, a physician from Winchester starting his second
session in the Kentucky Senate. His bill outlines procedures requiring managed care
companies to give adequate notice to physicians about material changes. He brings up
important provisions such as a face-to-face
meeting between the insurance company and
physician to discuss changes along with a
requirement for notice to be given via the
use of certified mail.
Ultimately, the honest solution for any material change in a contract is for both parties
to be knowledgeable about the changes and
agreeable to them. The current system allowing physicians to “opt out” of significant
changes is bad. It’s bad for physicians, and
it’s bad for patients.
It’s important to remember how patients
are affected by these changes which can