Kentucky measure calls for clearer contracts for doctors, plans

Kentucky has passed legislation mandating clearer and more balanced contracting between health plans and physicians. The laws are about as broad as those just passed by neighboring Ohio.

The Kentucky legislation requires health plans to expedite credentialing, give physicians a fee schedule and notice of changes in terms. The legislation passed in April with broad support in both the Kentucky Senate and House. Gov. Steve Beshear is expected to sign the bill into law.

Bills regulating contracts between doctors and health plans are still pending in other states, including Connecticut, New Jersey and New York.

"I think the issues are similar everywhere," said Kentucky Medical Assn. President Thomas Slabaugh Sr., MD, a urologist in Lexington. "If you're [addressing them] on a state-by-state basis, it's a lot of work, but unfortunately I think that's the way it has to be done."

Slow credentialing and, more specifically, withholding payment until credentialing is complete have been major problems for new physicians in Kentucky as elsewhere, Dr. Slabaugh said. Under the new law credentialing would have to be completed within 90 days.

"Physicians everywhere are having problems with insurance companies -- we call them nuisance issues," Dr. Slabaugh said.

The bill on the governor's desk can help both physicians and health plans, said Christi Lanier-Robinson, spokeswoman for Anthem Blue Cross and Blue Shield of Kentucky.

"It allows the proponents to meet their goals while also allowing us to protect the needs of our members and maintain our level of service," Lanier-Robinson said. "We feel like it's a win-win situation."

Ohio Gov. Ted Strickland signed a similar law March 25 that requires plans there to standardize credentialing and to provide fee schedules and notification of changes to contracts. That law also puts limits on network rentals, or silent PPOs, and sets a two-year moratorium on most-favored-nation clauses.

Last year, Kentucky passed a law banning the use of most-favored-nation clauses. In 2000, Kentucky banned all-products clauses and silent PPOs,.

The AMA supports state laws requiring "plain English" disclosures of fee schedules and terms of compensation. It also supports the Ohio law, as well as the Kentucky bill, and the Association's Advocacy Resource Center assisted state medical societies in drafting proposed wording for their legislation.

The Kentucky bill also allows parents the choice to buy coverage for any unmarried dependent children up to age 25. Currently state law allows for dependents to remain enrolled until age 25 only if they are unmarried and full-time students.

Dr. Slabaugh said the KMA supported the bill as a way to expand access to health insurance. About 13.8% of the state's population were uninsured between 2004 and 2006 according to U.S. Census data, slightly lower than the national average of 15.3% over the same time period.

Kentucky Rep. Bob M. DeWeese, MD, a retired general surgeon from Louisville, introduced the bill. The legislation was one part of a five-point plan by the KMA to address the state's shortage of physicians and improve access to health care.

A study released last year by the Kentucky Institute of Medicine found that there are not enough physicians in the state and projected the shortage would persist to 2020 even if medical school expansions and recruitment efforts under way are successful.

"If you're going to change things, you're going to have to have an adequate number of primary care physicians and emergency physicians," Dr. DeWeese said.

As part of its plan to address the shortage, the KMA is hoping that in future legislative sessions, state lawmakers -- or Congress, where appropriate -- will pass liability reform, adopt new rules restricting allied health professionals' scope of practice, fund a medical student loan forgiveness program, and improve Medicare and Medicaid funding.