Amid growing rancor nationally over the way HMOs pay their claims, California officials are pushing through new regulations that would hold health insurers far more accountable for paying doctors and hospitals on time.
The regulations, which have not yet been publicized, are among the toughest in the nation. They include stronger monitoring requirements for health maintenance organizations and would force insurers to disclose their fee rates for individual medical services and procedures, which some insurance companies have been reluctant to do.
The provisions also would make it harder for insurers to bounce claims back to providers with requests for more medical information--one of a number of tactics that regulators say has been used to delay payments beyond the 45-day limit set by law.
Tens of thousands of medical claims are delayed or disputed every month in California. Health insurers blame that mostly on incomplete claims filings. But some physicians, fed up with fighting insurers over bills, say they have stopped doing business with some insurance companies, potentially jeopardizing patients' access to care.
"Too often they don't pay doctors on time, and that has an effect on patient care," said Daniel Zingale, director of the Department of Managed Health Care, which drafted the regulations as part of the state's prompt-pay law that took effect last year. The department oversees HMOs as well as the Blue Cross and Blue Shield preferred provider organizations in California.
The new regulations are likely to be implemented this fall after a period for public comments.
Health insurance executives are expected to raise strong objections to the measures. When told of the regulations, they said some of the rules were unnecessary, arbitrary and will ultimately drive up costs for consumers at a time when premiums are already soaring. The national HMO association said that insurers have very high compliance rates with prompt-pay laws and that in many cases the delays are the result of two major issues: eligibility requirements and multiple filings.
"It's a solution in search of a problem," Health Net spokesman David Olson said of the new regulations. Neither Health Net nor other insurers would say whether they would challenge the measures in court, but regulators seemed to be anticipating that possibility.
Billing Disputes Spilling Into Courts
Although billing disputes between insurers and health providers have been around for years, they have taken on more intensity lately, spilling into the courts and government offices throughout the nation. They are part of the ongoing backlash against managed care and reflect the frustrations of many doctors who have become disenchanted with an increase in administrative hassles and an erosion of autonomy and income.
In recent months, five medical societies around the country have filed lawsuits against insurance companies for delaying or denying payments.
Meanwhile, regulators from Florida to Texas to California have levied fines totaling tens of millions of dollars against health insurers over their handling of claims.
Regulators say that when insurers don't pay on time or at all, patients are caught in the middle. Sometimes patients are held financially responsible for the bill. Left unpaid, consumers can later discover that their credit record has been smeared by an unresolved medical claim.
When physicians cancel contracts with insurers or medical groups over payment practices, patients might have more trouble seeing their doctors or face higher out-of-pocket costs.
Some doctors contend that insurers drag their feet in paying claims to maximize the float they earn on interest in premium dollars. But Janice Frates, a health-care administration expert at Cal State Long Beach, who has studied issues of claims processing, said: "It's not so much deliberately delaying payments as much as putting them mindlessly through the cycle again and kicking them back.''
Since last year, California regulators have collected major fines from PacifiCare Health Systems and Health Net, and have taken over some smaller health plans for failing to pay doctors and hospitals. Zingale called prompt pay a top priority for his department, saying he planned to step up enforcement.
Dr. Ted Mazer, an ear, nose and throat specialist in San Diego, says claims problems are not just about late payments. In December, he says, he billed Blue Cross of California $3,200 for a 3-hour-long sinus surgery. His claim included charges for several procedures, including work outside the nose and reducing an enlarged spongy bone inside the nose known as a turbinate.
But Blue Cross didn't see all those procedures as separate billable items, and the insurer combined some of them, including the turbinate reduction. Two months later, he received a check for $1,265.32.