As we go to press, Congress is advancing patient protection legislation. The outcome may be determined before you receive this publication, but the Washington Office will notify neurosurgeons (via broadcast fax) of any late breaking news.
On July 24, 1998, the House of Representatives voted on two bills. In a close margin of five votes, the Democratic Patient Bill of Rights was defeated, while the Republican alternative (H.R. 4250 — the Patient Protection Act) passed by six votes. The Senate has delayed action on managed care reform until September. The Democratic Patient Bill of Rights is not likely to pass, but the Senate Republican plan has a reasonable chance. If that bill is passed, the House and Senate will hold a Conference Committee to reconcile the vast differences between their respective bills. If legislation is agreed to by the Conference Committee and passed by oth the House and Senate, it is unclear whether President Clinton will veto the bill. It is certain that the legislation will not include all of the patient protections sought by the Administration. President Clinton will have to decide whether to sign the bill on the premise that “something, is better than nothing.”
The House and Senate Republican Patient Protection Acts includes the following provisions:
| HOUSE | SENATE | |
| Access to Out-of-Network Specialists/Point of Service Option | A point of service option at the time of enrollment if the employer only offers one closed-panel HMO. Does not apply to ERISA and new Healthmart plans, and is not required if the health plan can prove that the option causes premiums to increase more than 1 percent. | A point of service at the time of enrollment if the employer only offers one closed-panel HMO. Only applies to ERISA plans and exempts businesses with 2-50 employees. |
| Gag Clauses | The legislation bans health plans from limiting communication between physicians and their patients regarding treatment decisions. | Same provision. |
| Appeals Process | The legislation requires that treatment denials be made within 30 days (10 days for urgent care and 72 hours for emergency care). Following a denial, the patient can appeal to an internal review board, but the internal reviewer is not required to be an independent physician trained in the specific medical specialty in question. Upon denial of an internal review, the patient may appeal to an external panel. The patient must pay $25-$100 to start the external review process, and it may last as long as 180 days. | The legislation requires that treatment denials be made within 30 days (72 hours for emergency care). Following a denial, the patient can appeal to an internal review board, but the internal reviewer is not required to be an independent physician trained in the specific medical specialty in question. Upon denial of an internal review, the patient may appeal to an external panel, but the service must be more than $1,000. |
| Information Disclosure | The legislation requires plans to notify enrollees of covered and non-covered benefits, co-payment amounts and appeal rights. However, other information such as medical necessity criteria, utilization review procedures and accreditation information is required only if the patient requests that information. | The legislation requires plans to notify enrollees of covered benefits, co-payment amounts and appeal rights. It also requires that information on pre-authorization and specialist referral rules be disclosed. However, other information such as utilization review procedures and accreditation information is required only if the patient requests that information. |
| Coverage of Emergency Services | Covers only emergency medical screening under prudent layperson standard. Subsequent emergency medical services governed by “prudent emergency medical professional” standard. | Same provision. |
| Medical Malpractice Reform | The legislation creates a $250,000 cap on non-economic damages, two-year statute of limitations, periodic payments of damages, and joint liability. | No provision. |
| New Health Insurance Options | The legislation includes provisions to allow Association Health Plans, Healthmarts, Community Health Centers and wider use of Medical Savings Accounts (MSAs). | The legislation includes provisions to increase the use of Medical Savings Accounts (MSAs). |
Neither bill includes the following provisions advocated by the AANS and CNS:
- Prohibition on financial incentives to reduce referrals to specialists for medically necessary services.
- In-network access to all specialty care. Both the House and Senate ensure in-network access for pediatricians, OB/ GYN and emergency care.
Dr. Laws Speaks Out on “Hospital Length of Stay” Legislation
On June 19, 1998, AANS Immediate Past President Edward R. Laws, Jr, MD, attended a press conference convened by Senators Dianne Feinstein (D-CA) and Alfonse D’Amato (R-NY) on S. 2315, the Hospital Length of Stay Act of 1998. The press conference was well attended and was covered by all of the major television networks. Speaking as the sole representative of organized medicine, Dr. Laws stressed the importance of this bill, which requires health plans to cover hospital stays for whatever duration is determined to be medically necessary by the attending physician, in consultation with the patient. Concern over arbitrary limits on hospital length of stay (for deliveries and mastectomies) prompted the introduction of this measure. Representatives Tom Coburn, MD, (R-OK) and Rosa DeLauro (D-CT) introduced a companion bill (H.R. 4093) in the House of Representatives. The bill prohibits health plans from requiring prior authorization for length of stay or imposing penalties for stays beyond a health plan’s arbitrary limits.
Practice Expense Update
On June 5, 1998, the Health Care Financing Administration (HCFA)published the resource-based practice expense notice of proposed rulemaking (NPRM). Following a 90-day comment period, HCFA will finalize the new practice expense RVUs, which will be phased-in over a four-year period beginning on January 1, 1999.
Last year, HCFA proposed practice expense RVUs that would have reduced total neurosurgical income by 25-30 percent. This situation brought federal legislation aimed at preventing the implementation of this plan. Neurosurgery was at the forefront of this successful legislative campaign, which resulted in the passage of language in the Balanced Budget Act (BBA) of 1997 that delayed the implementation of the new payment system and mandated HCFA to take an entirely new approach to devising their methodology.
Under the new proposal, HCFA predicts that overall neurosurgical incomes will be reduced by 10 percent. The cuts do not include any offsetting increases to the malpractice component of the RBRVS (past proposals have indicated that neurosurgeons’ fees will increase by 5 percent when the malpractice RVUs are adjusted). By the year 2002, the total overall impact may result in a 5-7 percent decrease.
Although the AANS and CNS have made considerable progress, we still have concerns about the accuracy of the data and methodology. We are carefully evaluating the proposal and will address these issues in our comments to HCFA.
Physician Collective Bargaining — AANS and CNS Members Lead Legislative Effort
On July 20, 1998, Representative Tom Campbell (R-CA) introduced H.R. 4277, the Quality Healthcare Coalition Act of 1998. The bill provides that any group of healthcare professionals negotiating with a health insurer “shall, in connection with such negotiations, be entitled to the same treatment under the antitrust laws as that which is accorded to members of a bargaining unit unrecognized under the National Labor Relations Act.” In other words, independent physicians will be able to collectively negotiate contract terms, including fees, without fearing “price fixing” penalties. The bill was introduced to help correct the imbalance of bargaining power between independent physicians and insurance companies.
The AANS and CNS strongly support the adoption of this measure and will work to move the bill in Congress. AANS and CNS members, George H. Koenig, MD, and Donald J. Prolo, MD, should be credited with getting the bill introduced. Several years ago, they met with Representative Campbell and urged him to address unanimously supported the measure. In addition, Dr. Koenig has worked closely with AMA leadership to get the AMA to endorse the specifics of the Campbell bill.
While the bill will not go anywhere this year, on July 29, 1998, Henry Hyde (R-IL), Chairman of the House Judiciary Committee, held hearings on the legislation. The bill received considerable support by many members of the committee. Not surprisingly, the federal antitrust agencies oppose the measure, as does the health insurance industry.
Key Person Program
In our highly competitive special interest democracy, democracy only represents those who get involved. As more and more organizations vie for the attention of Congress, it is crucial that organized neurosurgery have a robust and active network of “grassroots advocates” to aid the Washington staff in their advocacy efforts. It is important for Members of Congress to realize that the messages delivered by the Washington staff genuinely represent the concerns of trusted neurosurgeon-constituents back home. Your efforts provide credibility for our message on Capitol Hill. The success of neurosurgery on various issues in Washington is directly linked to our grassroots members who contact their representatives in Washington, and our experience with the practice expense issue has demonstrated that we increase our success rate when all of our members get involved in the process.
The Washington Office recently acquired a new computer program that will enable us to communicate more efficiently and effectively on matters of federal legislation. Next year, members of the Key Person Program will receive information regarding effective communications with their Members of Congress, periodic newsletters exclusively for Key Persons and updates on issues of importance to neurosurgeons.
Get Involved
A new Congress in January presents an opportunity to improve our Key Person Program. The Washington Office will be sending a short survey to the membership following the November elections. Please take a few moments to complete and return the survey.
You are our most important assets on Capitol Hill! If you have a special relationship with a member of Congress, or if you are willing to develop such a relationship, please watch for further information on how you can become involved in this effort.
Payment Delays Cause Concern Among Physicians
by Lori Shoaf
Senior Washington Office Associate
The growing problem of insurance companies delaying payments to physicians and hospitals is receiving attention from many state legislatures. Due to the declining reimbursement from all payers, physicians can no longer absorb the costs associated with payment delays. Many states are moving aggressively to ensure that payments are made within a reasonable timeframe. At the national level, Medicare requires clean claims to be paid within 30 days of receipt or interest (currently accrued at 6.25 percent per annum) must be paid. Medicaid has similar provisions for state plans.
Why are Payments Increasingly Delayed?
Many insurance companies blame payment delays on old computer systems or glitches resulting from new, recently installed systems. Insurance industry mergers, as well as the growth of patients in managed care plans have compounded the problem. Increased scrutiny, including more stringent reviews of services rendered, requires claims processors to slow down turnaround times. Many physicians believe payment delays are stalling tactics designed to increase profits by allowing insurance companies to accrue interest on unpaid claims.
Highlights from the States
New York
Last year, New York passed a law mandating the payment of clean claims within 45 days of receipt. Failure to pay the claim after 45 days results in annual interest payments of 12 percent (calculated on a per diem basis). The New York action followed reports in the New York Times that Oxford Health Plan had failed to make payments totaling over $200 million for at least three months. A subsequent investigation by the New York State Attorney General resulted in Oxford agreeing to pay the delinquent claims and a fine of $3 million. New York has established a toll-free hotline (1-800-358-9260) so physicians and other providers can report payment delays.
Texas
In 1991, Texas passed a prompt payment law, which was strengthened last year. The statute calls for acknowledging receipt of a claim and requesting further information within 15 days. Texas insurance commissioner, Elton Bomer, issued a bulletin in January warning insurers that they will be disciplined if they fail to comply with the 1997 law. This action was prompted after spot checks, in response to complaints from providers, disclosed many continued problems. The commissioner stated that “significant violations” were found and indicated that punitive actions could range from fines to loss of licensure.
New Jersey
Anger from the provider community in New Jersey resulted in an agreement between the state government and New Jersey’s ten largest HMOs last year. The agreement allowed the state to promulgate regulations whereby insurers are required to reimburse physicians and hospitals within 60 days of receipt of a clean claim. Late payments result in interest payments of 10 percent per annum.
Other States
Following is a chart indicating the prompt payment laws or regulations in each state. Neurosurgeons are encouraged to contact their state health insurance regulator if they are experiencing difficulties in getting claims paid. For more information on this issue, contact Lori Shoaf at (202) 628-2072 or via e-mail at [email protected].
| State | Status of Law | State Contact Person |
| Alabama | Clean claims must be paid within 45 days. | Evelyn Terri (334) 206-5366 Alabama Department of Public Health |
| Alaska | Claims must be paid within 30 days. | Katie Campbell (907) 465-2515 Alaska Division of Insurance |
| Arizona | Clean claims must be paid within 30 days or interest payments required. | Patty Moore (602) 912-8444 Arizona Department of Insurance |
| Arkansas | Clean claims must be paid within 30 days. | John Shields (501) 371-2766 Arkansas Department of Insurance |
| California | Claims must be paid within 45 working days. Interest accrues at 10% per annum. | Steven Goby (213) 736-2510 California Department of Corporation |
| Colorado | None. Division of Insurance will investigate abusive patterns. | Michael Gillis (303) 894-7499 Colorado Division of Insurance |
| Connecticut | Claims must be paid within 45 working days. Interest accrues at 15% per annum. | Cliff Slicer (860) 297-3900 Connecticut Department of Insurance |
| District of Columbia | None. Department of Insurance will investigate abusive patterns. | Carol King (202) 727-8000, ext. 3031 District of Columbia Department of Insurance |
| Delaware | None. Department of Insurance will investigate abusive patterns. | Mary Ann Schillis (302) 739-4251 Delaware Department of Insurance |
| Florida | None. Department of Insurance will investigate abusive patterns. | Barbara Cartwright (904) 922-3100 Florida Department of Insurance |
| Georgia | Claims must be paid within 15 days. Interest accrues at 18% per annum. | Yvonne Martin (404) 656-2056 Georgia Office of the Insurance Commissioner |
| Hawaii | None. Department of Insurance will investigate abusive patterns. | Heidi Sands (808) 536-7702 Hawaii Medical Association |
| Idaho | None. Department of Insurance will investigate abusive patterns. | Joan Skrosch (208) 334-4300 Idaho Department of Insurance |
| Illinois | None. Department of Insurance will investigate abusive patterns. | Dave Grant (217) 782-6369 Illinois Department of Insurance |
| Indiana | None. Department of Insurance will investigate abusive patterns. | Cynthia Tompkin (317) 232-2385 Indiana Department of Insurance |
| Iowa | None. Division of Insurance will investigate abusive patterns. | Kim Sacher (515) 281-5523 Iowa Division of Insurance |
| Kansas | None. Department of Insurance will investigate solvency of abusive entities. | Jay Rogers (913) 296-3071 Kansas Insurance Department |
| Kentucky | Claims must be paid within 30 working days. Interest accrues at 12% per annum. | Melissa Toles (502) 564-6027 Kentucky Department of Insurance |
| Louisiana | Clean claims must be paid within 30 days. | Barry White (504) 342-5900 Louisiana Department of Insurance |
| Maine | Clean claims must be paid within 30 days. Interest accrues at 1.5% per month. | Rick Diamond (207) 624-8475 Maine Bureau of Insurance |
| Maryland | Clean claims must be paid within 30 days. Interest accrues at 1.5% per month. 1997 Law. | Joyce Yensen (410) 539-0872 Medical and Chirurgical Faculty of Maryland, Legal Division |
| Massachusetts | None. Division of Insurance will investigate abusive patterns. | Walter Marcinkus (617) 521-7777 Massachusetts Division of Insurance |
| Michigan | None. Department of Insurance will investigate abusive patterns. | Joan Miles (517) 335-2053 Michigan Department of Insurance |
| Minnesota | Claims must be paid within 30 days, however, this only applies to “nonparticipating providers,” i.e.: those without managed care contracts. | Irene Goldman (612) 282-6327 Minnesota Department of Health |
| Missouri | Provider must be paid in a timely manner in accordance with the provider’s contract. Note: A stronger bill that requires interest payments has been introduced this session. | Thomas Holloway (573) 636-5151 Missouri State Medical Association |
| Mississippi | Clean claims must be paid within 45 days. Interest accrues at 1.5% per month. | Anne Kelly (601) 359-3569 Mississippi Department of Insurance |
| Montana | Claims must be paid within 30 days. Interest accrues at 18% per annum. An administrative fine of up to $1000 can be imposed for each violation. | Clyde Dailey (406) 444-2040 Montana Department of Insurance |
| Nebraska | None. Department of Insurance will investigate abusive patterns. | Manuel Montelongo (402) 471-4821 Nebraska Department of Insurance |
| Nevada | None. Department of Insurance will investigate abusive patterns. | Mary Robinson (702) 687-4270 Nevada Insurance Division |
| New Hampshire | None. Department of Insurance will investigate abusive patterns. | Robert Warren (603) 271-2261 New Hampshire Department of Insurance |
| New Jersey | Clean claims must be paid within 60 days. Interest accrues at 10% per annum. | Ed Kalleher (609) 633-0660 New Jersey Department of Health |
| New Mexico | None. Department of Insurance will investigate abusive patterns. | Diana Bonal (505) 827-4561 New Mexico Department of Insurance |
| New York | Claims must be paid within 45 days. Interest accrues at 12% per annum or fines of $500/day. | Matt Gilbone (518) 465-8085 New York Medical Society |
| North Carolina | None. Department of Insurance will investigate abusive patterns. | Deanne Nelson (919) 733-7343 North Carolina Department of Insurance |
| North Dakota | Claims must be paid within 15 days. | Marion Price (701) 328-2440 North Dakota Department of Insurance |
| Ohio | None. Department of Insurance will investigate abusive patterns. | Molly Poreo (614) 644-2658 Ohio Department of Insurance |
| Oklahoma | Clean claims must be paid within 30 days. | Nora House (405) 271-6868 Oklahoma Department of Health |
| Oregon | None. Department of Insurance will investigate abusive patterns. | Fred Lindgren (503) 947-7984 Oregon Department of Insurance |
| Pennsylvania | None. Department of Insurance will investigate abusive patterns. | Harold Smith (717) 787-6835 Pennsylvania Department of Insurance |
| Rhode Island | None. Department of Insurance will investigate abusive patterns. | Rollin Bartlett (401) 277-2223 Rhode Island Department of Insurance |
| South Carolina | None. Department of Insurance will investigate abusive patterns. | Rob Ehrlich (803) 737-6160 South Carolina Department of Insurance |
| South Dakota | None. Department of Insurance will investigate abusive patterns. | Randy Moses <
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