Louisville Medicine Volume 63, Issue 9 - Page 7

From the PRESIDENT ROBERT “BOB” H. COUCH, MD, MBA GLMS President | bob.couch@glms.org 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