Complete Story
 

09/03/2008

Important Change for 2009 Insurance Contracts

New Law Will Govern 2009 Insurance Company Contracts

Earlier this year, the OSCA worked as part of the Ohio Healthcare Provider Coalition to pass the Healthcare Simplification Act, a new insurance contracting law which became effective in late June. Over the objections of the Ohio insurance industry, providers were successful in getting some new safeguards included in Ohio law which are designed to protect chiropractic physicians and other providers from insurance company abuse.

"The Healthcare Simplification Act isn't a panacea," said OSCA Executive Director Woody Woodward.  "It doesn't solve all of our problems with third party payers, but it is a step in the right direction. It is important that the legislature took a step toward leveling the playing field in the way that the state looks at contracts between our members and insurance companies."

Ohio DC's are urged to pay careful attention to 2009 contracts with insurance companies which will be issued over the next several weeks.  The requirements of the new law do impact 2009 contracts.

The Department of Insurance continues work to implement the law.  Woodward was recently appointed to the Advisory Committee on Eligibility & Real Time Claim Adjudication at the Ohio Department of Insurance and is working with ODI to seek the best solution in these areas.

Doctors who discover 2009 contracts which fail to meet the criteria set forth by the new law should contact the Ohio Department of Insurance at http://www.ohioinsurance.gov/consumers/pca/index.aspx?id=1

The basic elements of the Healthcare Simplification Act follow:

TRANSPARENCY IN CONTRACTING

  • Complete Copy of the Fee Schedule. At the physician's request, a complete copy of the fee schedule must be made available every six months either online or through a written copy. Copies of the fee schedule for the most commonly used procedure codes are to be given to the physician at the time of contracting.
  • Summary Disclosure Form Outlining Important Contractural Terms. Each contract with a contracting entity must include a summary disclosure form listing such information as the type of contract that is covered (e.g. fee for service, capitated) where to get a copy of the fee schedule, what products or networks the contract covers, and who will be paying the claim.
  • Restrictions on Silent PPOs and Rental Networks. Any third-party administrator, employer, PPO, HMO, insurer or payer who rents the physician's services from the original contracting entity must be identified both as to the payer issuing the payment and the source of any discount being claimed. They are also required to honor the original terms of the contract.
  • 90-Days Notice of all Material Contractual Amendments. All changes to the contract that involve a decrease in reimbursement, a significant increase in the administrative expense or that add a new product must be sent to the physician 90 days before the implementation date. The physician has 15 days to object, then another 15 days to cancel the contract if there is no resolution.

What this means for physicians.

The next time you contract with a third-party payer the contract should be clearer. First, the contract should contain a summary disclosure so that you can easily see terms like the length of the contract, the fee schedule for any code that you use and what products the contract covers. In addition, the insurer must make available to you information on any other network or payer that may access you through that contract. And, during the contract, the payer cannot make a material change without notifying you and giving you the chance to object or cancel.

STANDARDIZED CREDENTIALING

  • Adopts the CAQH Credentialing Form. A physician will only need to fill out one credentialing form, either written or online, and update it as needed. All contracting entities (other than hospitals) seeking to credential a physician must use the same form and cannot request additional information as part of the credentialing process.
  • 90-Day Time Frame for Processing Credentialing Applications. Contracting entities must notify a physician within 21 days if there is a problem or question with the credentialing form. If the credentialing process is not complete within 90 days, the contracting entity must pay a penalty to the physician.
  • Penalties for Not Credentialing Within 90 Days. Contracting entities must pay the physician either $500/day for every day over 90 days or reimburse the physician for any services provided under the contract after the 90th day until the credentialing process is complete. It is up to the credentialing entity which penalty they will pay. Penalties are payable whether or not the physician is accepted or rejected as a provider of services under the contract.

What this means for physicians.

You no longer need to fill out multiple insurance credentialing forms with multiple addendums. There is one form for all private insurance companies and no addendums. Once you have that form on file with CAQH all you need to do is keep it updated.

FAIRNESS IN CONTRACTING

  • Prohibits "Most Favored Payer" Clauses. Contracts can no longer have clauses that allow the contracting entity to reimburse the physician at the lowest rate the physician has agreed to provide other insurers or contracting entities. Instead, they must pay the physician the rate agreed upon when the physician signed the original contract.
  • Prohibits Unilateral Contractual Amendments. The physician has the right to notice of any amendments to the contract and, if the amendment is material and the physician does not agree with it, the physician has the right to cancel the contract.
  • Restricts "All Products" and "Future Products" Clauses. Contracting entities cannot require physicians to participate in every product they offer unless the physician chooses to do so or the contracting entity offers some financial incentive. Contracting entities also cannot require a physician to provide services for every product they might offer in the future as a condition of signing the contract.
  • Prohibits Repricing of Claims and Sale of Contracted Rate.  The contracting entity cannot "sell" the physician's contract to a third party without notifying the physician and requiring that the third party honor the terms of the original contract.
  • Improves Eligibility Inquiries. A committee is established under the direction of the Ohio Department of Insurance to study Real Time Claim Adjudication and its application to payers in Ohio.

What this means for physicians.

Your next contract with a payer in Ohio will contain "fairness"  provisions thanks to the OSCA supported legislation. Payers will no longer restrict you with "most favored payer" clauses that allow payers to lower their fee schedule to match another payer's lower fee schedule. And, if they make changes to the contract or attempt to rent your contract to anyone else, they have to let you know what they are doing, which gives you a chance to object or get out of the contract.

APPLICABILITY

  • Contracting Entities.  The law applies to all entities in Ohio that contract with physicians for managed care services: Health Insuring Corporations (HICs),  Health Maintenance Organizations (HMOs),  Preferred Provider Organizations (PPOs), Third Party Administrators (TPAs) and Managed Care Plans (MCPs).
  • Exceptions.  The law does not apply to fee-for-service contracts with Medicare or Medicaid or to contracts with Workers' Comp.   It also does not apply to exclusive contracts between a health insuring corporation and a single group of providers in a specific area.

What this means for physicians.

The new rules apply to all health insurance companies.  They don't just apply to the traditional health insuring corporations, they apply to any company (other than government) that pays claims.  That means they apply to TPAs that administer self-insured companies.


Close Window