Physicians, hospitals and health insurers have defeated a proposed state law that would have forced insurers to cover out-of-network physicians' charges consumers incurred at in-network hospitals.

 

However, healthcare industry members say the issue is not dead, and they expect to see legislation addressing the topic next year.

 

Dr. Steven B. Spedale, a member of the Louisiana State Medical Society's Board of Councilors, said a major problem is that hospital patients often don't know who is in their network or what physicians will be treating them.

 

"I have yet to meet a person … who has read their whole insurance book. When you get it, it's so long," Spedale said. "Most of us look at schedule of benefits, but nobody really reads the rest of it."

 

The benefits schedule doesn't actually list the in-network physicians, Spedale said. The healthcare system needs to reach the point where patients know what insurance product they are buying, what it covers, and which doctors are at what hospitals. Once patients have all that information, they can make informed decisions, Spedale said.

 

Insurers, hospitals and physicians need to figure out a way to put together a system that will get that information to consumers when they need it.

 

It's unclear what the best method is to accomplish that.

 

A proposed law would require insurers to post an online database of its in-network radiologists, anesthesiologists, pathologists, neonatologists and emergency medicine doctors, their addresses and business numbers by March 31, 2010. SB 282 has passed the full Senate and the House Insurance Committee with no opposition and appears likely to be adopted as law.

 

However, the bill does not make clear how people without Internet access will be able to get the information.

 

What is clear is that hospitals, physicians and health insurers oppose the solution backed by Insurance Commissioner Jim Donelon.

 

Donelon has said a common practice among hospitals – contracting with a single group of radiologists, anesthesiologists and pathologists – often victimized consumers.

 

Patients go into a hospital that's part of their health plan, expecting that their share of the bill will include their deductible and co-pay, Donelon said. But after surgery, the patients may discover that that they must pay thousands of dollars of out-of-network fees to these specialists, whom the patient may not have ever met.

 

Donelon's idea was to close the loophole by making health insurers bear those additional costs, pressuring insurers to bring the so-called "RAP" doctors into their networks. Sen. Sharon Weston Broome, D-Baton Rouge, authored SB 170 to do just that.

 

But the Senate Insurance Committee heavily amended the bill, removing the requirement forcing insurers to pay out-of-network costs for procedures at in-network hospitals.

 

The amended version of the bill required health insurers to inform plan members that they could request that all services be provided by doctors in their networks. If the patients didn't receive that information, the out-of-network provider could only collect the same amount of money that the health plan would pay to an in-network doctor.

 

Weston Broome eventually withdrew the bill and plans to ask for a study on the issue before the next regular session of the Legislature.

 

Donelon said he was disappointed that hospitals, doctors and health insurers defeated the effort to close a loophole that costs policyholders millions of dollars a year.

 

However, the issue gained valuable exposure this year, Donelon said. Two Senate Insurance Committee members experienced the out-of-network fees after their wives checked into hospitals to have their babies.

 

Donelon said he is hopeful legislation will close the loophole next year.

 

Gil Dupré, chief executive officer of the Louisiana Association of Health Plans, said insurers, physicians, hospitals and the state Department of Insurance need to arrive at some sort of consensus on the issue.

 

After a similar impasse in 2008, the Insurance Department held a series of meetings to discuss solutions with providers and health insurers. Those meetings proved contentious, with few healthcare industry members willing to endorse the proposed bill and many openly opposing it.

 

Forcing insurers to pay the bill in full would have led to much higher insurance premiums for workers and employers, Dupré said. The proposed legislation would also have removed the incentive for doctors to be part of a health network.

 

Physicians would make more money by opting out of the network, Dupré said. The result is that eventually health plans would find their networks included no doctors, and healthcare costs would rapidly spiral out of control.

 

Spedale said physicians opposed the idea of forcing providers to contract with health insurers.

 

"In the medical world, there are many reasons why some physicians do not contract with an insurance company," Spedale said. "Sometimes it's financial. Sometimes it's a business strategy. Sometimes it's just an unfair agreement."