Executive office update: Finding sweet spot for transparency, fairness and accountability

Friday, May 01, 2015 12:07 PM

by Alfred Gilchrist, CEO Colorado Medical Society

The Senate Business, Labor and Technology Committee’s recent hearing of Sen. Irene Aguilar’s SB 259 on excessive out-of-network charges resulted in the decision to defer the topic to an interim study.

On a partisan 5-4 vote, these senators told all of us in the room – the insurance companies, physicians, hospitals, patient advocacy organizations, businesses and regulators – that they will stand down for an interim study to see if we can find a sweet spot that allows for transparency, fairness and accountability. As this month’s cover story explains, physicians argued persuasively, with temporary success, that there’s a lot more to the out-of-network story, and in this case the committee should invoke the time-honored rule that “hard cases make bad law.”

For the time being the politics are on hold, and all but one insurance company understands the extraordinary opportunity that an interim conversation presents as perhaps our only chance during this decade to collaborate on a solution to this problem. The interim study offers a unique opportunity to build a policy consensus among those who will make the decisions and those who will live and practice by them. Otherwise it’s back to old school lobbying and zero-sum policy results.

Danger of doing nothing
Our view is that the outcome of doing nothing translates into something far worse in the marketplace for patients, physicians and insurance companies. It is important to note that there are some familiar, friendly faces in Colorado’s insurance community, notwithstanding the adversarial nature of this year’s legislation. These relationships will hopefully focus the interim study on evidence and the downstream effects of policy options.

We joined national experts in warning that there are adverse direct and indirect consequences of attempting to globally cap one narrow aspect of a complex set of transactions that determine the nature and balance of business and clinical interests between insurance companies and physicians. We noted that such an approach would attempt to fix an underlying more complicated question of network adequacy by declaring the symptom illegal. A prominent professor we retained from the prestigious Kellogg School of Management explained in a sworn affidavit that the global cap would threaten the ability and desire of many physicians to practice in Colorado, and/or push more physicians into hospital employment. This expert also explained the adverse impact on the market forces that currently provide a level of balance.

The senate committee understood that as insurance companies in Colorado and across the country drastically reduce the availability of physicians within networks, more physicians would find themselves out of network. This will be especially true in emergent settings where the physician has hospital staff privileges but is no longer part of an insurance company network.

De-selections of physicians without cause by the health insurance industry permit the narrowing of the networks that threatens to take us back to the ’90s, along with all the familiar variances in health plan criteria, some understandable, some more mercenary, and mostly not transparent. The consumer response in the ’90s was a major league backlash resulting in state consumer protection laws across the country. Instead of rational policy debates, the medical-insurance industry discussions were more akin to bar room brawls. 

In that broader, more relevant context of how insurance companies make the rules that control where patients seek treatment and who is in and out-of-network, we invited a study of the issues several months before SB 259 was filed. No patient should be blindsided with a bill that by any rational measure is excessive, nor should physicians find themselves at sea because an insurance company arbitrarily decides on some magical number of specialists and PCPs and the rest are thrown overboard.

I hope we can all grasp the fact that we are all in the same boat, and this interim effort is the most important undertaking of the decade in terms of finding systemic approaches as opposed to symptomatic treatments.