SB 198 fight will continue

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Doctors seem to have won the battle over legislation that allows more negotiating power when signing contracts with large health insurance corporations. But leaders of Colorado’s health plans say that physicians have only won the first round.
Senate Bill 198 is awaiting Gov. Bill Owens’ signature, but is a watered-down version of the original legislation that the Colorado Medical Society helped create.
“It evolved from the first iteration to try to be responsive to concerns raised about the bill,” said Dr. Rick May, president of the Colorado Medical Society. “I think this bill evolved to address all of those differences of opinion.”
But Mike Huotari of the Colorado Health Plan Association disagrees. His organization is asking the governor to veto the bill. Failing that, he said he will ask lawmakers during the next legislative to rescind what he calls a “very bad bill.”
“It involves the state of Colorado inappropriately,” he said. “It allows them to dictate the terms of the contracts of health officials. It really aims to please special interest of health care professionals, instead of the consumer. It allows doctors to become enforcers – they can enforce the statute themselves, not the state.”
May, on the other hand, said doctors were at the mercy of insurance companies: forced to sign contracts when the fee schedule was hidden and forced to sign up for every insurance option offered by the companies, with no control over who bought the doctor’s information from the company.
“The bill prohibits a lot of those practices,” May said. “We know what we’re getting in terms of the contract. During the last few years, insurance companies stopped telling us what we would be paid. It’s a continual sore point with physicians. I’m an orthopedic surgeon, and I don’t know what I’ll be reimbursed for on any given surgery. The bill fixes that – they have to tell us the rates.”
The bill prohibits insurance companies from requiring doctors to accept each line of insurance: HMO, PPO and workers’ compensation.
“I do a lot of HMO work,” May said. “And so in order to do business with an insurance company, they would also make me sign up for PPO and workers’ compensation – despite the fact I do very little of that kind of work. All doctors were forced to accept all the products, regardless of whether they use them or not.”
But Huotari said the bill goes too far. He said the legislation equals unfair government intrusion into private business.
“We believe that the ability of private parties to contract freely is an integral part of a market economy and of citizens being able to successfully run their businesses,” he said. “Private parties, not government, should dictate the terms and conditions of private contracts.”
The latest version of the bill adds another area of concern for health plans. Huotari said that if the bill becomes law, providers could not only bring lawsuits, but could also “enforce” other parts of the legislation.
“Some of this (the legislation) was hastily written,” he said. “It lacks clarity about compliance. SB 198 initially put enforcement authority in the hands of the state Division of Insurance. Instead, it now creates a ‘private right of action’ that would allow health care providers to become, in essence, a new regulatory agency.”
May disputes the idea that the legislation takes power away from insurance companies.
“I think at the local level, we’ve had a pretty good working relationship with the health plans,” he said. “We spent about 40 hours in negotiation with them. But their national headquarters are telling them to fight this bill. This bill is very modest. It certainly isn’t going to change the balance of power.”
Huotari said the impact of SB 198 will be felt increasingly by consumers.
“This is going to be a huge increase in expense for health plans,” he said. “I can’t put a dollar figure on it, but it is going to be hugely expensive. If the governor allows it to become law, then our only option is to come back, ask them to repeal this harmful legislation.”
Amy.Gillentine@csbj.com