Sen. Jeff Kruse: Tracking HB 2339 on in network providers


I thought it might be informative relative to how this process works to describe the journey of one bill, and for this purpose I have chosen House Bill 2339.  This is a bill dealing with payments to out of network providers in the health care system.  The issue is how those providers get paid and currently the patient is billed directly for those services.  The reason for this is the fact your insurance only covers providers in the network you are contracted with.  In reality we are only dealing with about 3% of billed charges, but it is still an issue we feel should be addressed.  Over the last decade I personally have had three surgeries and honestly never even thought about checking to find out if all the medical people involved were “in network,” it is just not something most people would have on their mind when heading into surgery.  Unfortunately, if, for example, some of the tests required need to be sent to another hospital the patient will receive a bill for those services as they are not covered by network insurance. 

While there is general agreement this type of direct billing needs to be fixed, it turns out the solution is not necessarily that simple.  When an insurance provider comes to the State to establish their insurance rates they factor in all the costs of the services provided within their network.  They have no control over billed charges for providers outside the network.  So basically, what this bill is attempting to do is have insurance cover those out of network charges.  The issue becomes how to set reasonable billing charges.  The House Health Care Committee spent a great deal of time on this issue and ultimately decided to index charges to Medicare.  Once they had made that choice their discussion came down to what rate to set.  My understanding is they had settled in the committee at a rate of 225% of Medicare charges, based on the fact Medicare only pays about 60% of actual charges.  However, at the last minute, they were told by leadership to reduce it to 175% of Medicare.  That was the bill the House sent to the Senate with the full expectation it could be “fixed” over here.

We had a hearing in the Senate Health Care Committee on the bill yesterday, and we have concluded it still needs a lot of work.  To a large degree this is a balancing act.  The rates need to be set at a level so we are not either incenting providers to stay out of plans or incenting plans to keep providers out.  At the same time, we need to be creating a level of certainty so this can be factored into rate cases when they are presented to DCBS.  We think this will be an achievable objective, but we will probably go a different direction than the one taken by the House.  If indeed that is what we do it will create the potential of a different dynamic.  If the House does not agree with our approach they will have a motion on the House floor to not concur with our version and a conference committee will be set up to try and come to a resolution on the issue.  This sort of process is not used very often, but usually does happen on a handful of bills each Session.

This bill has also created another interesting, although not unusual, political dynamic.  I have received a couple of hundred emails on this bill from people who have never communicated with me before.  It is a form letter claiming the bill is unfair to patients.  In cases like this I am always curious as to the source of the form letter and what network was triggered to engage so many people.  I have asked, but at this point nobody is claiming responsibility for the creation of the letter.  While I am not discounting the validity of the concerns, it is always helpful from my position to be able to know the source and the background information being communicated to create the response.  While I can understand the emotions behind a lot of the issues we deal with, I would suggest our work should be based upon facts and logic.

Unfortunately, emotions seem to be driving a lot of the agenda this Session.  I am still hoping that in the end our work will be driven by policy not politics, but at this point I am not sure that is going to happen.