Insurance and Insurance Claims and Health Care Costs and Health Care Reform and Health Care & Insurance

Docs, health insurers battle at Statehouse

February 2, 2009

A log-rolling match between doctors and health insurance companies over how insurance payments are made has surfaced in the General Assembly a fourth year in a row, and it's difficult to predict whether two bills now before lawmakers will founder again.

Both House and Senate versions of the legislation would force insurers to send benefit checks directly to doctors, dentists or other providers rather than patients—even if the provider is outside the insurer networks. In industry-speak, the practice of determining where checks are sent is called "assignment of benefits."

Advocates say the measure would help providers stay independent of insurers and prevent confusion when patients receive insurance checks and spend the money rather than reimbursing the provider. Last year, backers dubbed the legislation the "HHGregg bill" for patients' unwitting propensity to spend the money on flat-screen televisions and other consumer goods at the Indianapolis-based retail chain.

Providers say the legislation not only would cut confusion over the intended use of reimbursements, but also eliminate hassles of patients' forwarding their payouts to providers.

On the other hand, insurers and their allies are fighting to maintain the status quo, insisting health care costs would spiral out of control if providers were allowed to charge what they wished without the restraint imposed by insurance plans.

Insurers wring out $3 billion in annual discounts for patients while guaranteeing the best possible care, said Tony Felts, a spokesman for Anthem Inc., the state's largest health insurer.

Mike Ripley, vice president of health care policy at the Indiana Chamber of Commerce, which has joined insurers in opposing the legislation, said, "We want to maintain the integrity of the networks, which were created to keep costs down."

Last year, a bill died in the Senate after failing to receive a vote.

Both sides agree the issue is contentious and can confuse lawmakers.

"It's very involved legislation that normally requires spending a lot of time with legislators not coming from an insurance background," said Doug Bush, executive director of the Indiana Dental Association, one group supporting Senate Bill 75 and House Bill 1299.

One thing is certain, said Ripley: The issue "is never going to go away."

Nineteen states have laws governing assignment of benefits. Of those, nine are limited to certain types of providers, such as dentists and pharmacists.

In Indiana, assignment of benefits has become an issue only in recent years as more and more insurers refuse to send checks to out-of-network providers. Delta Dental, the state's largest dental insurer, stopped honoring the requests in June. Since then, 285 dentists have joined Delta's network.

The trend prompted dozens of dentists to converge on the Statehouse Jan. 21 to persuade legislators to pass SB 75 and HB 1299.

While opposed to the overall legislation, the chamber backs the Senate version, which would allow direct insurance payments to emergency room doctors.

The Senate and House bills were introduced by Beverly Gard, R-Greenfield, and Peggy Welch, D-Bloomington, respectively.

The Senate's Committee on Health and Providers Services held a hearing on its bill Jan. 21, but took no action. As of IBJ press time, the committee had not scheduled a vote.

A Senate task force looked at the issue last summer and made recommendations similar to the chamber's stance. The Mandated Benefits Task Force said the legislation should be limited to "medical situations where the consumer may have no choice in the selection of provider, such as a hospital-based emergency room services, anesthesiology, radiology or pathology."

The task force also recommended that when payments are made directly to the insured for out-of-network providers, the check be accompanied by an explanation of benefits and a notice that the payment should be directed to the provider.

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