Balance Billing by Health Care Providers: Assessing Consumer Protections Across States.

ISSUE: Privately insured consumers expect that if they pay premiums and use in-network providers, their insurer will cover the cost of medically necessary care beyond their cost-sharing. However, when obtaining care at emergency departments and in-network hospitals, patients treated by an out-of-network provider may receive an unexpected "balance bill" for an amount beyond what the insurer paid. With no explicit federal protections against balance billing, some states have stepped in to protect consumers from this costly and confusing practice. GOAL: To better understand the scope of state laws to protect consumers from balance billing. METHODS: Analysis of laws in all 50 states and the District of Columbia and interviews with officials in eight states. FINDINGS AND CONCLUSIONS: Most states do not have laws that directly protect consumers from balance billing by an out-of-network provider for care delivered in an emergency department or in-network hospital. Of the 21 states offering protections, only six have a comprehensive approach to safeguarding consumers in both settings, and gaps remain even in these states. Because a federal policy solution might prove difficult, states may be better positioned in the short term to protect consumers.

Medicare program; Medicare Advantage and prescription drug benefit programs. Final rule.

This final rule finalizes revisions to the regulations governing the Medicare Advantage (MA) program (Part C), prescription drug benefit program (Part D) and section 1876 cost plans including conforming changes to the MA regulations to implement statutory requirements regarding special needs plans (SNPs), private fee-for-service plans (PFFS), regional preferred provider organizations (RPPO) plans, and Medicare medical savings accounts (MSA) plans, cost-sharing for dual-eligible enrollees in the MA program and prescription drug pricing, coverage, and payment processes in the Part D program, and requirements governing the marketing of Part C and Part D plans.

The price is now right. UnitedHealth Group's settlement on benchmarking databases could make out-of-network care costs more transparent, equal, some say.

Disagreement surrounds the discussion of whether the demise of two Ingenix price databases will aid the provider-payer relationship. Karen Ignagni, AHIP's CEO, questions the objective, wondering why in some cases "billings so exceed reimbursement." However, AMA President Nancy Nielsen, left, retorts, "This is an attempt to divert attention from what was clearly a rigged scheme".

Silent PPOs: the stealth discounting of provider reimbursement.

Physicians are losing millions of dollars per year from payers engaging in abusive discounting practices. One of the worst of these practices is the silent PPO. This article explains what a silent PPO is and how it unlawfully reduces a provider's reimbursement. The article discusses how providers can recognize silent PPOs and how to protect their practices from this discounting. The article also reviews statutes that prohibit or regulate silent PPOs and recent court decisions finding in favor of providers and against silent PPOs.

Self-insurance in times of growing and retreating managed care.

This paper examines trends in self-insurance and in the content of self-insured plans from 1993 to 2001. The percentage of employees enrolled in self-insured plans fell during these years. Much of the decrease was attributable to the decline of indemnity insurance and the rise of HMO and point-of-service plan enrollment. If the product mix had remained constant throughout these years, self-insured enrollment would have grown between 1993 and 1996 and then declined to its current 50 percent level. As a result of the Health Insurance Portability and Accountability Act (HIPAA), the use of preexisting condition clauses declined dramatically in self-insured plans. Self-insured and purchased plans cost similar amounts and provide similar benefits. Cost sharing is somewhat lower in self-insured PPO plans. During periods of rapid inflation, premiums increase more slowly for self-insured than for fully insured plans.

The critical role of ERISA in state health reform.

Despite prominent roles for employers and state regulation in the Clinton administration's Health Security Act, relatively little attention has been accorded to the impact of federal preemption of state legislation through the Employee Retirement Income Security Act (ERISA). As interpreted by the U.S. Supreme Court, ERISA permits state regulation of insured employee health plans but otherwise preempts analogous regulation relating to self-insured benefit plans. This has prompted lower courts to find that hospital rate-setting legislation, regulation of preferred provider organizations (PPOs), and medical malpractice suits for utilization review decisions are preempted by ERISA. Several issues with major implications for health reform remain unresolved, such as the availability of ERISA preemption to self-insured health alliances and health maintenance organizations (HMOs).

The spread of state any willing provider laws.

OBJECTIVE: To describe the growth of any willing provider (AWP) and freedom of choice (FOC) laws applicable to managed care firms and to explore empirically the determinants of their enactment. STUDY SETTING: A 1996 compendium of state laws and state-level data from the 1991-1994 period. STUDY DESIGN: Pooled cross-section time-series logistic regression of the decision to enact various types of AWP and FOC laws. Analysis uses a public choice framework to examine enactment. Key variables include proxy measures of proponent and opponent strength and the political environment. PRINCIPAL FINDINGS: The model works well for laws affecting hospitals, but performs poorly for physician and pharmacy laws. More providers are associated with the enactment of AWP and FOC laws. More large employers are associated with a reduced likelihood of enactment of some forms of the laws but not others. Conservative states are more likely to enact laws limiting selective contracting with hospitals and physicians. States with greater interparty competition are also more likely to adopt some types of legislation. CONCLUSIONS: The empirical results generally are consistent with the view that AWP and FOC laws are often enacted as a defensive strategy on the part of providers, but additional research is needed to provide a more definitive assessment of the determinants of these laws. Suggestions for future research are provided.

Do "any willing provider" and "freedom of choice" laws affect HMO market share?

This study examines the effects of "any willing provider" (AWP) and "freedom of choice" (FOC) laws on the market share of health maintenance organizations (HMOs) in metropolitan statistical areas over the period 1989-95. We use pooled cross-section time-series regression techniques with year and state fixed effects. HMO market share is hypothesized to be a function of state laws, market characteristics, and state preference for managed care regulation. AWP and FOC laws are characterized by three alternative measures of regulatory intensity. The results suggest that FOC laws have a greater impact on market share than do AWP laws. More comprehensive regulation has a bigger impact than less encompassing laws, and laws limiting selective contracting with physicians are more effective in reducing HMO market share than are laws covering hospitals or pharmacies.

Medicare and state health care programs: fraud and abuse; safe harbors for protecting health plans--Office of Inspector General, HHS. Final rule.

In accordance with section 14 of the Medicare and Medicaid Patient and Program Protection Act of 1987, this final rule sets forth various standards and guidelines for safe harbor provisions designed to protect certain health care plans, such as health maintenance organizations and preferred provider organizations, under the Medicare and State health care programs' anti-kickback statute. These safe harbor provisions were originally published in the Federal Register on November 5, 1992 in interim final form. In response to the various public comments received, this final rule revises and clarifies various aspects of that earlier rulemaking.

Collection from third party payers of reasonable costs of healthcare services--DoD. Proposed rule.

This proposed rule implements several recent statutory changes and makes other revisions to the Third Party Collection Program. The primary matter include implementation of new statutory authority to include workers' compensation programs under the Third Party Collection Program; the addition of special rules for collections from preferred provider organizations; and other program revisions.

Development of provider networks for specific diseases.

Carve out contracting for specific diseases and specialty services has become extremely common in a very short time. The goal of carve out contracting is simple: to place responsibility for managing care and its cost in the hands of those best suited to provide and manage care. This article provides an overview of carve out contracting for specific diseases. While the article focuses on business and legal issues relating to AIDS/HIV and ESRD, the principles discussed are applicable to numerous diseases.

Preferred provider organization liability for physician malpractice.

The preferred provider organization (PPO) is a recent innovation in the health care industry, designed to reduce costs through selective contracting and utilization controls. This Note examines malpractice liability theories potentially applicable to PPOs. The Note compares PPOs to other health care institutions, including hospitals and HMOs, and concludes that PPOs are at minimal risk of incurring liability for physician negligence.

Preferred provider organizations: antitrust aspects and implications for the hospital industry.

The hospital industry is currently undergoing a substantial transformation as a result of changes in third party reimbursement mechanisms and a tendency toward a more competitive economic environment. Hospital administrators will have to demonstrate substantial flexibility in considering and implementing innovative institutional arrangements to ensure survival in this time of austerity. The Preferred Provider Organization (PPO) is a recent development in the health care industry involving the selective contracting for health care services. This Article examines the role of section 1 of the Sherman Antitrust Act in scrutinizing the PPO for anticompetitive effects, considering the divergent requisites for competition in the health care sector. The Article also proposes a modified Rule of Reason for application to the PPO and other innovative cost containment arrangements in the industry and considers the implications of such flexible application of conventional antitrust principles for the future of the hospital industry.

Examining exclusionary conduct of HMOs and PPOs: a case comment on Northwest Medical Laboratories v. Blue Cross and Blue Shield of Oregon.

As the climate of the health care industry has changed to one of cost-containment and competition through the growth of HMOs and PPOs, health care providers have become the subjects of antitrust litigation. One such case, Northwest Medical Laboratories v. Blue Cross and Blue Shield of Oregon, involved a medical laboratory and a radiology center who claimed that they were victims of an illegal group boycott after defendant's pre-paid health plan denied them preferred provider status. The Oregon Court of Appeals, using the traditional antitrust analysis applied to other industries for decades, failed to consider the intricacies that exist within the health care industry. This result led to an inaccurate market share computation and an inadequate rule of reason analysis. This Comment examines the shortcomings of the Northwest Medical opinion and argues that, in applying the antitrust laws to the health care industry, courts in future cases must recognize and respect the unique features of the business of providing health care.

Ball Memorial Hospital: Section 2 Sherman Act analysis in the alternative health care delivery market.

In 1986, the Seventh Circuit Court of Appeals in Ball Memorial Hospital v. Mutual Hospital Insurance denied an injunction sought under the antitrust laws by the plaintiffs, eighty acute care hospitals, which would have precluded Blue Cross and Blue Shield of Indiana from implementing a Preferred Provider Organization. The Ball court used a conservative economic analysis to deny the injunction and failed to consider many industry-specific factors. This Note examines these factors and challenges the Ball court's position by arguing that antitrust scrutiny of alternative health care delivery markets must go beyond the court's narrow approach.