fact that these activities were difficult to sort through and understand, for physi- cians as well as for legislators. Her testi- mony and that of Dr. Korenman were a critical part of educating lawmakers on the subject. So was sponsorship of the bill by physician-legislator and first-time state senator Dr. Schwertner, who understood how such activities can burden physi- cian practices. “This bill is about truth in contracting and shining a light on these silent PPO networks. It’s a great win for medicine to finally get this bill across the finish line,” he said. The legislation also won key support
from Blue Cross and Blue Shield of Tex- as. The health plan does not use rental networks, but still must comply with the new law, says BCBSTX Chief Medical Of- ficer Dan McCoy, MD. “Everything about the health insur- ance marketplace is complicated,” he said. “It just makes sense we should know who these entities are and what they represent. It also makes sense phy- sicians should know what they are going to get paid for services they bill.” The new protections also coincide with the launch of a federally run health insurance marketplace in Texas on Oct. 1, another likely impetus for the bill’s long-awaited passage, Dr. McCoy added. The Blues plans to participate in the exchange and as new products spring up,
“we felt like it was critically important for Texas physicians to knowingly con- sent to participate in any new networks and new products that will be available as part of this change,” he said. “We felt also this bill would help to fix the con- fusion (surrounding silent PPOs) … and really ensure Texas consumers would ultimately have access to a network of physicians offered under the federal exchange.”
Another TMA legislative victory this
session, Senate Bill 1221 by Sen. Ken Paxton (R-McKinney), will provide simi- lar protections for physicians as Med- icaid managed care companies look to offer commercial exchange plans using Medicaid payment rates. The law, which also took effect Sept. 1, ensures physi- cians know when their discounted con- tract rates under Medicaid managed
September 2013 TEXAS MEDICINE 43
care or the Children’s Health Insurance Program (CHIP) are applied to other products.
In passing SB 822, lawmakers ironed out some wrinkles in earlier proposals that drew opposition in the past from multiple interested parties. The bill’s authors amended provisions that some business groups worried would disrupt employer-funded benefit plans and streamlined the notification and consent provisions, easing concerns from health plans and PPOs about their ability to comply with the requirements. Admin- istrative penalties at TDI replaced pro- visions subjecting companies to court action.
The American Association of Pre-
ferred Provider Organizations changed its position midsession to support SB 822. The Texas Association of Health Plans opposed earlier legislative efforts, but was neutral in this session, as was the Texas Association of Business. The Texas Association of Benefit Administra- tors was opposed to certain provisions.
Out in the open The registration provisions under the new law will for the first time provide an inventory of the various contracting entities and any of their affiliated com- panies or subsidiary networks, whether they are PPOs that assemble and sell or rent out physician networks, third-party administrators that access those con- tracts to process payers’ claims, or insur- ers. TDI also must make that registration information publicly available.
That level of transparency alone will save practices significant amounts of time and money chasing down improper claims, says Bill Reynolds. He is founder of Austin-based nVenio Analytics, which helps physicians recover improperly paid claims. (See “Claims Detectives,” August 2013 Texas Medicine, pages 57–60.) Beginning in 2000, for example, a number of PPO networks began consoli- dating, putting roughly a dozen of the larger national networks under single ownership. But a company still can pass negotiated contract rates on to any num- ber of its subsidiaries, he says. So if phy- sicians contract with one company, their discount still may be shared with half-a- dozen other companies. “It takes a lot of detective work to fig-
ure that out,” but the new law will make it easier for doctors to know whom they are dealing with, rather than stabbing in the dark, Mr. Reynolds said. While it’s currently difficult to tell how many of those networks operate in Texas, he es- timates that most practices see patients from around half-a-dozen different re- gional PPO networks and a dozen more national players. The disclosures will make it a lot less expensive for practices to resolve im- proper claims, he added, saying that on average it can cost $50 to chase down a $40 payment.
Physicians also will get to see which fees apply to which networks, specifi- cally HMOs, PPOs, exclusive provider organizations, or Medicare Advantage or Medicaid managed care plans. Com-
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