Piqued hospitals to get say in April
Posted on Thursday, February 21, 2008
Critics of some of the Arkansas insurance commissioner’s interpretations of what constitutes discrimination under the “any willing provider” healthcare law will present their case in a hearing April 14. Commissioner Julie Bowman in December issued three orders responding to a complaint by Arkansas Surgical Hospital in North Little Rock, which believes it is being discriminated against because it receives less from insurers compared with other hospitals for the same services.
The surgical hospital early last year asked the Arkansas Insurance Department to examine rates paid by Arkansas Blue Cross and Blue Shield, United HealthCare and QCA Health Plan Inc., or QualChoice.
Bowman, who is responsible for enforcing the statute, found the insurers were not in violation of the law. Different payments are allowed under the law if they are based on factors such as quality, cost and standard of care, she said. There was no evidence that patient choice of provider was affected by differing payments, she said.
The law, which was passed in 1995 and which the Insurance Department began enforcing in mid-2005, opened up insurance networks to all health-care providers that meet entry requirements. Proponents argued that the law would give individuals more choices for care.
Some specialty hospitals believe the statute means that insurers must pay hospitals equally for the same services, or at least according to a clear formula applied equally to everyone.
Arkansas Surgical, the Surgical Hospital of Jonesboro, and the Arkansas Medical Society, which lobbies for physicians, are among several health-care groups and hospitals who disagree with Bowman’s orders.
“What we would want is for the commissioner to find that AWP means what it says: We ought to be offered the same rates for providing the same services as our competitor across town, or across the county,” said Tom Staley, an attorney whose law firm represents the Jonesboro hospital. “If we’re not being paid [the same ], it puts us at a competitive disadvantage,” he added.
Supporters of the orders include the Arkansas Hospital Association and community hospitals such as St. Vincent Health System, who say that community hospitals provide more emergency-room care, neonatal intensive care units, charity care and other services for the community than specialty hospitals and should receive higher compensation.
Elisa White, general counsel for the Arkansas Hospital Association, said the association’s position is that “hospitals should remain free to negotiate with insurers based on their unique characteristics.”
But Sam Perroni, a Little Rock attorney and investor in Arkansas Surgical, said insurers aren’t “negotiating” with all hospitals.
The surgical hospital’s insurance contracts “were given to us, and it was a take-it-or-leave it [deal ],” he said. He disagrees with the order’s assertion that the insurers are determining rates based on cost and quality. If that were the case, he said, the surgical hospital would be paid more. Perroni says Bowman’s interpretation puts the quality of care at Arkansas Surgical and other hospitals at risk in the future.
What the word “reimbursement” refers to in the any willing provider law also is proving contentious. Perroni believes reimbursement refers to what an insurer pays to a hospital or other health-care provider, but Bowman has interpreted “reimbursement” as meaning a payment by an insurer to repay patients what they’ve spent on medical care. “That’s the ordinary usage of it in the insurance industry,” she said this week.
The distinction is important because it could indicate what the Legislature intended to constitute a monetary advantage or penalty.
The Arkansas Medical Society, which represents doctors in the state, asked last week to participate in the hearing in April as “intervenors.” But Bowman said Tuesday that such status wasn’t granted because the society wasn’t addressed in her orders, which were aimed at hospitals and which she believed would not immediately affect the group’s financial interests.
“Even though the commissioner is attempting to limit her ruling to hospitals, we are not clear as to how she can do that since the same statutory terminology she interprets in her ruling applies to all providers and their patients, not just hospitals,” the society said in a statement. “We want to know more about her reasoning and are considering our legal options.”
Perroni was unsure of what the surgical hospital owners will decide to do if the hearing does not result in an amended order, but he said he would recommend taking the case to court.
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