Led by suburban allies from the lower Hudson Valley and Long Island, business took its lobbying clout to Albany this year. In the political ring, it took on business as usual in the state”™s malfunctioning health-care industry.
The outcome this month, after several rounds of negotiation and compromise, was reform legislation that advocates for hospitals, physicians and premium-paying businesses described as a small but significant victory in their continued fight to “level the playing field” dominated by highly profitable and politically powerful health insurers.
Across that field, a leader of their opposing business lobby called the legislation “the result of all parties working together in the spirit of ”˜putting patients first.”™”
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Bill”™s provisions
The health insurance reform bill, which takes effect April 1, 2008, addressed several areas of concern to health-care providers and patients in their often difficult dealings with managed-care health plans. A spokesperson for Gov. Eliot Spitzer, who signed the bill Aug. 1, said the legislation “provides key legal protections to address long-standing problems of patients who feel caught in the middle between hospital and insurer disputes” and “helps untangle the complicated maze of rules that have been developed by hospitals and insurers so that clear and timely health-care decisions can be made.”
The bill”™s provisions include:
- Limiting a health plan”™s ability to deny payment for care that it had already authorized.
- Giving consumers the ability to appeal to an independent outsider reviewer when a health plan denies a patient”™s request to see an out-of-network specialist for a service not available in their plan network.
- A two-month “cooling-off period” during which terms of a contract between an insurer and a hospital continue if the contract is terminated or not renewed, so that consumers aren”™t needlessly alarmed by notices that a hospital may no longer be in a health plan”™s network.
- Requiring managed-care plans to report key data on health-care quality that the state Department of Health can then publish for consumers.
- Setting a 15-month time limit for hospitals to submit claims to health plans when they have provided out-of-network services to patients.
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”˜Got their attention”™
While Spitzer called the legislation “far-reaching,” its proponents in Westchester County shared a more practical view while savoring a victory in their two-year-old campaign to reform the state”™s health insurance industry and stabilize the economic vitality of both the region and state.
“This is incremental,” said Amy Allen, managing director for advocacy and international business at the Westchester County Association (WCA) in White Plains, the business membership group who”™s Blue Ribbon Hospital Task Force led to the formation last year of the Suburban Health Care Alliance. “But it”™s really the first time that the slightest little chink in the armor of these insurers has happened. The fact that anything got passed, we view, and I think the hospitals and physicians view, as important.
“Up until now, the insurers did just about anything they wanted without repercussions. These are powerful lobbying groups.”
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To counter those forces among Albany lawmakers, the WCA, as well as Allen, WCA President William C. Mooney Jr. and another staff member, registered as state lobbyists last year. A retired banker, Mooney, often accompanied by Allen, has traveled across the state, from Long Island Sound to the St. Lawrence River, to address hospital boards and business groups on the need for health insurance reform and specific legislative measures to achieve that.
In the last two years, “We certainly have spent at least 25 to 30 percent of our time” on health-care reform, Allen said. Last year”™s allied efforts spurred passage of a legislative reform package that established common coding for billing by insurers; limited the period that HMOs could review and cancel refunds they issue to physicians from six years to two years, and set a maximum 90-day processing period by insurers for physicians”™ applications for in-network status.
Health-care providers “have been trying to lobby for these kinds of bills for years,” Allen said. “Once the business community got behind it and became part of the coalition, that makes a difference.
“The legislators were shocked that one business group would basically attack another business group. That got their attention.”
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Fair deal or price-fixing?
Heads of hospital and physician groups in the alliance said the new legislation is especially important for health-care providers by requiring health plans to pay for preauthorized services.
“It”™s very disconcerting when a doctor or a hospital receives an authorization to do a procedure with a health organization and then the claim is denied later,” said Neil Abitabilo, president of the suburban alliance”™s seven-county Northern Metropolitan Hospital Association in Newburgh and a WCA task force member. “It wasn”™t an isolated thing. It was fairly pervasive.”
“I think legislators were absolutely appalled that that was going on,” said Robert A. Glazer, CEO of ENT and Allergy Associates L.L.P. in Tarrytown and task force member. “They couldn”™t believe that was happening.”
“What does authorization mean if it doesn”™t mean payment?” Abitabilo said, repeating a question directed at insurers during negotiations. “All parties will now all have a clear understanding of what their obligations are. In addition to clarifying it, it saves endless hours of paperwork and the phone calls to try to get paid for services you already did.”
“It”™s small, incremental improvement,” Assemblyman Adam Bradley, D-89th District, said of the recent legislation. The law”™s required payments for preauthorized services “will lessen the pain that has been inflicted on a lot of our hospitals,” he said.
Bradley and members of the suburban alliance, which also includes the Nassau-Suffolk Hospital Council, said they will resume their fight for health-care reforms in the upcoming legislative session. Those measures include a proposal to restore the authority of the state Superintendent of Insurance to review and regulate health insurance premium increases.
At the New York Health Plan Association in Albany, a lobbying and advocacy group for managed-plan companies, Senior Vice President Leslie Moran said a return to a regulatory rate-setting process “is tantamount to price-fixing” and opposed by the 25-member association.
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A push for reinvestment
Health-care providers want protection from provisions in managed-care contracts that prevent patients from assigning benefit payments to out-of-network hospitals and physicians. Bradley said HMOs do not as readily comply with prompt-pay provisions when sending checks to patients, who do not advocate for payment as providers do, and hospitals and physicians go unpaid for their services.
At ENT and Allergy Associates, an out-of-network provider, Glazer said physicians recently were notified by Oxford Health Plans, one of the state”™s largest insurers, that it will no longer send claim payments directly to physicians there. “It”™s clearly a tactic that insurers are using to make collection even more difficult for hospitals and physicians,” Glazer said. “The playing field gets very one-sided.”
Bradley in the last two years has been the Assembly sponsor of versions of a health-care reinvestment bill that, as Abitabilo said, “was fiercely opposed by health plans.” That legislation as introduced this year would create a statewide health-care reinvestment fund whose money would come from commercial insurers who do not meet minimum medical loss ratios ”“ that is, they fail to spend a set percentage of their income from premiums on health care rather than keep it for profits.
Use of the funds for improved health-care services, such as information technology, would be regionally determined by committees composed of government, business, health insurance and health providers.
Abitabilo said some such mechanism for community reinvestment by insurers is “the big idea we keep pushing for.”
Health insurers keep pushing back. At the state Health Plan Association, Moran last week called the reinvestment fund proposal a case of “robbing Peter to pay Paul. It”™s taking money from the health insurers and giving it to hospitals to help with their needs.” Those needs can be met through existing state programs, she said.
“It”™s all in all, we think, a really bad idea,” she said.
Bradley said he hopes the state”™s HMOs will change their business-practice model: “Make as much as possible, hide it in reserves” ”“ about $4.3 billion in nonmandated reserves in 2005, according to health-plan financial statement filings compiled by the Greater New York Hospital Association ”“ “give it out in bonuses to staff, raise premiums and deny payments to patients and doctors for legitimate services.”
“That is a model that is designed to fail,” Bradley said.
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