A bill currently on Colorado Gov. Bill Owens' desk may serve as a national model for transparency in health plan contracts. S.B. 198 (PDF file: 11 page / 94 KB. More about PDFs.) would require the Colorado insurance commissioner to develop a standardized contract for all Colorado health plans and physicians so Colorado family physicians will know exactly what their health plan contracts pay, under what circumstances and for what period of time.
Health Contracts Bill Reaches Colorado Governor's Desk
By Leslie Champlin
5/17/2006
Owens has not announced whether he will sign the legislation. Observers note the insurance industry opposed the bill, contending it would create government interference between private contracting parties. In an effort to secure the governor's signature, AAFP President Larry Fields, M.D., of Ashland, Ky., urged Owens to support the bill in a May 11 letter.
"SB 198 will provide transparency and prohibit certain unfair contracting practices," Fields said in his letter. "Further, health plans, through complex contract provisions, can delay or deny medically necessary care."
Fields said he urged the governor to sign this bill to "assure access to medical care for the clients of the state’s insurance companies instead of allowing 'back room' dealings by individual companies to threaten the financial solvency of Colorado’s outstanding family doctors."
A Colorado-specific Speak Out letter, dated May 11, echoes Fields' position. The Speak Out Action Alert urges Colorado family physicians to contact Gov. Owens and ask him to sign S.B. 198.
A family physician may deal with 10 or more managed care plans, each with a "confusing and complex" contract that can be 35 pages long and refer to manuals that are hundreds of pages long, says the Speak Out letter.
"These very profitable, huge insurers have legal departments and large staffs and write contracts that are obfuscated, unfair, and presented to a doctor with a 'take it or leave it' attitude," the letter says. "Contracts are changed without notification to the doctor. Unsuspecting physicians find themselves participating in plans that are cleverly hidden in the contract for the managed care organization's plan with which they did sign."
Most family physicians have little recourse because, as small businesses, they cannot afford the cost of an attorney to review each contract, the letter continues. According to Federal Trade Commission lawsuits, they can't band together to retain an attorney for contract review, either.
"The solo and small-group physicians and rich insurance companies are not equal parties," the letter says.
Among the issues underlying physician support for the legislation is quality of care, said Mary Fairbanks, M.D., of Denver. "As physicians, we would better spend our time caring for patients or keeping up with the medical literature than reading page 348 of one contract and comparing it to page 42 of another," she said.
If signed by Gov. Owens, S.B. 198 would be historic, said AAFP Director Virgilio Licona M.D., of Fort Lupton, Colo. "If we're asking for patient accountability, if we're asking for physicians to be accountable and transparent, it's important that the insurance industry be accountable and more transparent. We should know what these contracts say and be able to compare them."
Other observers agree. S.B. 198 could be a model law for other states, according to Tom Banning, director of legislative and public affairs at the Texas AFP. Texas has attempted to pass similar legislation for the past three legislative sessions, he said. Passage in Colorado could help build momentum for similar laws across the country.
If signed by Gov. Owens, the bill would take effect in 2008 and would increase the transparency of health plans' contracts with physicians by
"SB 198 will provide transparency and prohibit certain unfair contracting practices," Fields said in his letter. "Further, health plans, through complex contract provisions, can delay or deny medically necessary care."
Fields said he urged the governor to sign this bill to "assure access to medical care for the clients of the state’s insurance companies instead of allowing 'back room' dealings by individual companies to threaten the financial solvency of Colorado’s outstanding family doctors."
A Colorado-specific Speak Out letter, dated May 11, echoes Fields' position. The Speak Out Action Alert urges Colorado family physicians to contact Gov. Owens and ask him to sign S.B. 198.
A family physician may deal with 10 or more managed care plans, each with a "confusing and complex" contract that can be 35 pages long and refer to manuals that are hundreds of pages long, says the Speak Out letter.
"These very profitable, huge insurers have legal departments and large staffs and write contracts that are obfuscated, unfair, and presented to a doctor with a 'take it or leave it' attitude," the letter says. "Contracts are changed without notification to the doctor. Unsuspecting physicians find themselves participating in plans that are cleverly hidden in the contract for the managed care organization's plan with which they did sign."
Most family physicians have little recourse because, as small businesses, they cannot afford the cost of an attorney to review each contract, the letter continues. According to Federal Trade Commission lawsuits, they can't band together to retain an attorney for contract review, either.
"The solo and small-group physicians and rich insurance companies are not equal parties," the letter says.
Among the issues underlying physician support for the legislation is quality of care, said Mary Fairbanks, M.D., of Denver. "As physicians, we would better spend our time caring for patients or keeping up with the medical literature than reading page 348 of one contract and comparing it to page 42 of another," she said.
If signed by Gov. Owens, S.B. 198 would be historic, said AAFP Director Virgilio Licona M.D., of Fort Lupton, Colo. "If we're asking for patient accountability, if we're asking for physicians to be accountable and transparent, it's important that the insurance industry be accountable and more transparent. We should know what these contracts say and be able to compare them."
Other observers agree. S.B. 198 could be a model law for other states, according to Tom Banning, director of legislative and public affairs at the Texas AFP. Texas has attempted to pass similar legislation for the past three legislative sessions, he said. Passage in Colorado could help build momentum for similar laws across the country.
If signed by Gov. Owens, the bill would take effect in 2008 and would increase the transparency of health plans' contracts with physicians by
- requiring disclosure of insurance plan fee schedules for physician compensation, including the method, calculation or policy affecting actual compensation;
- prohibiting attachments, additional fee schedules, manuals or other documents that modify the contract unless the physician has agreed to it in writing at least 30 days before the modification is implemented; and
- mandating a description of the system for resolving payment or other disputes and the time by which disputes would be resolved.
