Senate panel advances bill aimed at increasing transparency in health insurance

An Indiana Senate panel on Wednesday overwhelmingly advanced a bill aimed at increasing transparency in the health insurance industry.

The bill is also designed to remove barriers and speed up the process for which insurers grant prior authorization for a medical or hospital procedure.

It would shorten the time in which an insurer must respond to a request for prior authorization, from 72 hours to 24 hours for urgent procedures, and from seven days to two days for non-urgent procedures.

It would also require health plans to post on their websites every year the 30 most frequently submitted medical billing codes for the previous year and the percentage that were approved.

“The intent is just to have transparency in the health care insurance space,” said Sen. Liz Brown, R-Fort Wayne, the bill’s author.

The Senate Health and Provider Services Committee voted 10-1 to approve the legislation, SB 249. It was supported by doctors and hospitals, and opposed by the health insurance industry and the business lobby.

Dr. Elizabeth Struble, a family practice physician from North Manchester and president of the Indiana State Medical Association, said her office spends countless hours every week haggling with insurance companies to see if they will authorize a procedure or medication. She said insurers often require lengthy authorizations for medications they had approved just a few months earlier.

“Prior authorization is meant to be a check on the medically expensive and less common services and treatments,” she said. “However, insurers can increasingly apply it to basic and routine care.”

The bill provides that a health plan may not require a doctor or hospital to seek prior authorization for a particular health service if the health plan approved at least 90% of the prior authorization requests for the particular health service in the previous six-month period.

The bill would also require an insurer or health maintenance organization to give a contracted provider at least 15 days’ notice of changes to existing prior authorizations, precertifications, notifications and referral programs.

Brian Tabor, president of the Indiana Hospital Association, said the bill would help increase transparency on what’s driving increases in insurance premiums. It would also lessen the administrative burden on doctors, nurses and hospitals.

“We’ve seen too much of almost what has become an arms race, where insurance companies will hire vendors, institute new policies for prior authorization on the front end,” he said. “But we also see denials on the back end. So it’s throughout the system.”

But health insurers pushed back at the hearing, saying the proposal would increase costs and burdens on health plans, which could be passed along to customers.

Maddie Augustus from the Insurance Institute of Indiana said the bill would create hardships for insurers, who need time to review claims.

“The turnaround time would be very hard for members to operationalize and still complete a sufficient review process,” she said.

The Indiana Chamber of Commerce also opposed the bill, saying it could add costs and administrative burdens to companies.

“Any costs that insurers incur are passed along to the employer,” said Malika Butler, an attorney for Taft Law, representing the chamber.

Logan Harrison, an attorney for Indianapolis-based insurer Anthem Inc., said the bill would actually decrease, not increase, transparency. He said it would roll back laws that have been in place for years.

“It’s doing nothing but intentionally confusing all of you and your constituents,” Harrison said. “This is not doing anything but increasing cost and confusion. I can’t be more blunt about it.”