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Regulators get doctors' view of plan issues

The AMA is calling for greater regulation and scrutiny of insurance plans' contracting techniques.

By Bob Cook — Posted July 4, 2005

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Physicians are taking their case to insurance regulators and legislators about the dire effect a lack of transparency in health plan contracts has had on their practices.

AMA Chair J. James Rohack, MD, on June 13 testified before the National Assn. of Insurance Commissioners on transparency issues -- which include plans' failing to disclose reimbursement schedules, downcoding and bundling of claims, and putting physicians on so-called "silent" PPO networks. He called on the NAIC to include the AMA's suggestions in any model standards it develops.

The NAIC, which encompasses state-level insurance regulators, had Dr. Rohack speak to its Health Insurance and Managed Care committee at its annual convention. On July 8, Dr. Rohack is set speak before the National Conference of Insurance Legislators. It is believed to be the first time either organization has invited a physician organization to speak.

Many states have passed prompt-payment laws and other legislation designed to give physicians some protection in health plan contracting. But Dr. Rohack, in his NAIC testimony, explained how health plans have used their market dominance to, essentially, force physicians into their networks at their terms.

"The AMA believes that the shroud of secrecy covering the entire health care payment process must be lifted," Dr. Rohack told the NAIC.

Also, Dr. Rohack testified about "the unregulated secondary discount market" in the PPO industry. A growing number of entities do nothing but put together networks of physicians and lease those networks, along with "associated provider discounts," to other plans. Often, the leasing occurs without physicians' consent in "silent" PPOs.

"Given the huge amount of health care resources these entities are siphoning from the system, it is extremely troubling that they function with little or no oversight," he said. "We believe that this entire secondary discount market must be carefully scrutinized and regulated."

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