NCOIL Moves Model Demanding Transparency in PPO Rental Networks

Health plans and third parties that rent access to a preferred provider organization's network will have to provide greater transparency about their pricing and contractual arrangements, under a model act the National Conference of Insurance Legislators is recommending states begin taking up in 2009.

Adopted at NCOIL's annual meeting in Duck Key, Fla., the Rental Network Contract Arrangements Model Act would permit doctors and other health care providers to refuse requested discounts when they have not been provided information about network access up front. Although the bill does not limit the number of times that a third party may rent access to its network and discounts, PPOs would have to be notified of any such "downstream rentals."

"Following the delivery of service, providers were billing and then being asked to accept reimbursement at rates that they were unaware of at the point of service and during the provision of service, and they wanted NCOIL to be engaged on that issue and see what could be developed," said state Rep. George J. Keiser, R-N.D., the model act's primary sponsor.

NCOIL moved the model three years after initially entertaining debate on the topic. The group scrapped consideration of an earlier version of the bill, and crafted the revised model over the course of nine interim conference calls. The final version ultimately earned support the American Association of Preferred Provider Organizations and the American Medical Association, although it was opposed by America's Health Insurance Plans, which separately drafted its own model.

Among the points of contention were whether the measure should apply to self-funded insurance plans or third-party administrators acting on their behalf, with the model ultimately including a drafting note suggesting that each state should decide the matter for itself.

AHIP proposed exempting self-funded plans on grounds the Employee Retirement Income Security Act pre-empted state law. Kelly Kenney of the AMA said the provider community believed a transparency bill was "only useful if it's applicable to all entities that are leasing or renting in this marketplace."

"There was a division in the committee whether to include ERISA plans, be up-front and say they're excluded, or to be silent," Keiser said. "We had some fun debate whether or not lobbyists would be engaged more if you put ERISA in or if you took it out. I assured members of our committee that lobbyists would be fully engaged regardless of the action of this committee on this issue."

Rick Ramsay, AHIP's vice president of state advocacy, also noted the group took issue with some of the reporting requirements the bill could lay on affiliates of a PPO, such as dental or workers' compensation plans.

"Now you're going to have a physician, under this model, that would get a notification from all of those different affiliates, and we're worried that would cause confusion in the name of transparency," Ramsay said.

(By R.J. Lehmann, Washington bureau manager: [email protected])