payers, physicians frequently wind up forfeiting a considerable percentage of charges for services they provide.
According to TMA surveys, 72 percent of all Texas physicians work in small practices of eight or fewer physicians.104
Small practices have little, if any,
leverage in negotiating with health carriers. When insurance carriers make an offer, they are generally too big and too busy to discuss with doctors what insurers believe to be minutia. Insurers, to ease their costs, want to administer “national paper.” The physician may have only two options: to take it or leave it. Artfully drafted, these contracts and related business practices often put physicians’ offices at the mercy of health carriers.
The above, coupled with increasing hassles and frustration with administrative policies and procedures imposed by health carriers, hurts the practice environment and affects physician recruitment, retention, and decisions relating to early retirement.
Texas’ 2003 prompt pay legislation addressed a number of physicians’ grievances regarding fair contracting in the regulated insurance market. For example, Texas requires timely payment when a physician submits a defined clean claim, and policies on bundling and downcoding are available on request. However, a new market has arisen since 2003.
The health care market has spawned a secondary market in physician contracts. The lack of regulatory oversight in the preferred provider organization (PPO) industry has resulted in the proliferation of entities that are engaged in the business of buying, selling, and leasing physician agreements and contract rates to any number of payers. These entities are called “rental network PPOs” or “lease network PPOs.” When the physician discount is shared without authorization from the physician, the arrangement is referred to as a “silent PPO.”
Other entities, called “repricers,” exist solely to find and apply the lowest discounted rate for its clients,
February 2013 TEXAS MEDICINE 59 A PHYSICIAN’S STORY
Noe Oliveira, MD McAllen
Taking Care of Patients Is Easy … Regulations Are Not
“If all I had to do each day was take care of the patient, that would be so easy, if that’s all I had to do. But instead, I have to deal with regulatory issues all day.”
usually without express authorization from the physician. The activities within this market, and the entities engaged in these activities, are virtually unregulated in Texas.
In retail, when a shoplifter takes a five-finger discount, it increases the cost of goods for everyone. The same is true when PPO networks take a discount that the physician has not agreed to offer.
The secondary market in physician contracts has gained national attention. In November 2008, the National Conference of Insurance Legislators (NCOIL) adopted a model law to regulate rental network PPOs. NCOIL’s model was the result of an effort among national associations of networks, physicians, and insurers. In Texas, in 2011, TMA introduced a bill based on the NCOIL model
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