The Tennessee Medical Association, which represents thousands of Tennessee physicians is pushing for a new state law that would add much needed predictability in contracts between health plans and health care providers. It is our top legislative priority this session and, if passed, will be the first law of its kind in the U.S.
The Provider Stability Act passed unanimously in both chambers of the Tennessee General Assembly and was signed by Governor Bill Haslam on Wednesday.
The sponsors Sen. Bo Watson and Rep. Jon Lundberg have already lined up more than 30 co-sponsors in the General Assembly and expect more to follow as the Healthcare Provider Stability Act (SB 2427/HB 2303) moves through legislative committees. Physicians are informally calling it the Payer Accountability bill because it will do just that: hold payers accountable for the agreements they make with health care providers.
The Provider Stability Act requires health insurance companies to give a 60-day notice to a healthcare provider when reimbursement rates change, if such changes are a result of a policy change at the sole discretion of the payer. It also limits fee schedule changes to once in a 12-month period, and requires a 90-day notice of those changes.
The Tennessee Medical Association, which represents more than 9,000 Tennessee physicians, has pushed the measure since 2014. The law will go into effect in 2019.
No other state currently has these types of provisions in place.
“This is a huge win for physicians and all healthcare providers in Tennessee,” said TMA President Keith G. Anderson, MD of Memphis. “TMA listened and has responded to members’ growing frustrations by bringing some stability and predictability to the marketplace.”
Medical practices enter into contracts with health plans to spell out exactly what will be paid for the services provided by the physicians to patients covered by that health insurance plan. The contracts are routinely written, however, to allow insurers to lower payment at any time, for any reason. If doctors do not agree to this, health plans will drop them from the network, forcing patients to find a new physician or pay higher “out-of-network” fees. These contracts protect health plans only by ensuring that they have no legal obligation to maintain the original payment amount, and they often don’t, arbitrarily cutting physicians’ reimbursement in the middle of a contract period.
The TMA listened to its members’ growing frustration and made it a priority to bring some stability and predictability to the marketplace. Our intent is simply to have health plans honor network contract provisions throughout the full contract term and stop these one-sided, “take-it-or-leave-it” rate cuts that disrupt patient care.
Insurance companies claim the bill will affect patient care, and they are correct. Under the current system, when doctors incur an unexpected change in reimbursement from a health plan, they may be forced to stop providing a procedure, inconvenience patients by sending them elsewhere for a routine diagnostic test, or drop out of the network altogether. Patients suffer by having to pay more out of pocket for the same service, lose time out of work or school to get a test done, or choose another doctor who is in their network. Patients want to keep their doctor. The new law will effectively eliminate those scenarios and protect the important patient-physician relationship.
If enacted, in no way will the law interfere with any federal or state payment mandates, which are totally unrelated to commercial plan rates. It will not affect payment for new procedures or technology. It will not obstruct payment reform models that reward providers for meeting certain quality and cost measures, or penalize them when they don’t.
It will allow for annual contract renegotiation’s. It will not require them.
Physicians just want insurance companies to stick to an agreement, once it is in place, for at least 12 months before they make changes.
Doing so will streamline the administrative process for all parties involved, eliminate unnecessary hassle, enhance relationships between health care providers and insurers and, most important, safeguard patient care.
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