Colorado family physicians would get dramatic relief from insurance paperwork hassles under a bill that could become a model law for the nation.
The bill, S.B. 198, would require the Colorado insurance commissioner to develop a standardized contract for all Colorado health plans and physicians. The contract would contain certain parameters that could dramatically enhance transparency in health plans' fee schedules, renewal dates and other provisions.
Colorado Bill Could Launch Nationwide Trend
Standardized Contracts Offer Relief From Paperwork Hassles
By Leslie Champlin
3/13/2006
"Colorado would be the first state that would have, in statute, a standardized contract form that must be used," said Sue Hall, policy director for the Colorado AFP.
If passed, the legislation would increase the transparency of health plans' contracts with physicians by
If passed, the legislation 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.
Twenty-five of 35 Colorado state senators and 34 of 65 state representatives currently support the bill, and it is expected to go to committee within two weeks, said Hall.
Although the medical community has unified in support of the bill, the insurance industry has expressed concerns. Officials from America's Health Insurance Plans, Washington, D.C., were unavailable for comment to the AAFP, but in a March 3 Denver Business Journal article, Michael Huotari, executive director of the Colorado AHIP chapter, said the bill would require insurers to rewrite 60,000 contracts and modify administrative and information technology systems to manage the new contracts. Opponents of the bill also say it would interfere with contract negotiations and possibly set mandatory rates for the plans.
Not true, said Alfred Gilchrist, executive director of the Colorado Medical Society. "This is purely a disclosure bill," he said. "It doesn't violate the health plans' right to contract with physicians or to negotiate. It lets physicians compare apples to apples and oranges to oranges."
The call for greater health plan transparency fits the national trend toward greater disclosure in the medical community. Public and private officials have demanded that physicians disclose their compliance with performance measures and their charges for health services. Applying that principle to health plans aligns with that trend, said Gilchrist.
Tom Banning, director of legislative and public affairs at the Texas AFP, agreed. 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.
"Contracting problems are not unique to Colorado. They are a national problem that significantly impact family physicians' practices. Hopefully, Colorado's effort will help demystify the complex nature of health plan contracting and rid (the health plans) of the common 'gotcha' provisions," said Banning, referring to complicated contract provisions that may lead insurance companies to deny physicians payment for services rendered.
A December study by the Englewood, Colo.-based Medical Group Management Association Center for Research indicates that a 10-physician office can spend up to $247,594 a year in contract-related administrative paperwork. The study points out that "simplifying our (national) health care system's administration could reduce annual health care costs by almost $300 billion."
Although the medical community has unified in support of the bill, the insurance industry has expressed concerns. Officials from America's Health Insurance Plans, Washington, D.C., were unavailable for comment to the AAFP, but in a March 3 Denver Business Journal article, Michael Huotari, executive director of the Colorado AHIP chapter, said the bill would require insurers to rewrite 60,000 contracts and modify administrative and information technology systems to manage the new contracts. Opponents of the bill also say it would interfere with contract negotiations and possibly set mandatory rates for the plans.
Not true, said Alfred Gilchrist, executive director of the Colorado Medical Society. "This is purely a disclosure bill," he said. "It doesn't violate the health plans' right to contract with physicians or to negotiate. It lets physicians compare apples to apples and oranges to oranges."
The call for greater health plan transparency fits the national trend toward greater disclosure in the medical community. Public and private officials have demanded that physicians disclose their compliance with performance measures and their charges for health services. Applying that principle to health plans aligns with that trend, said Gilchrist.
Tom Banning, director of legislative and public affairs at the Texas AFP, agreed. 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.
"Contracting problems are not unique to Colorado. They are a national problem that significantly impact family physicians' practices. Hopefully, Colorado's effort will help demystify the complex nature of health plan contracting and rid (the health plans) of the common 'gotcha' provisions," said Banning, referring to complicated contract provisions that may lead insurance companies to deny physicians payment for services rendered.
A December study by the Englewood, Colo.-based Medical Group Management Association Center for Research indicates that a 10-physician office can spend up to $247,594 a year in contract-related administrative paperwork. The study points out that "simplifying our (national) health care system's administration could reduce annual health care costs by almost $300 billion."
