Bob Lotane: SB 1122 is bad medicine for Florida
Florida continues to struggle to reduce the amount our residents pay for health insurance as medical costs continue to spiral. Yet there is one area where we have seen progress in controlling medical costs and, therefore, contain the amount Floridians pay: That is in the Preferred Provider Organizations or PPOs. However some very powerful groups in the medical profession want to break up these networks and increase the cost of care.
Senate Bill 1122, which relates to direct assignment of benefits, is the vehicle being used. This legislation not only increases the cost of health care it also negatively impacts access to health care providers. SB 1122 would significantly reduce the ability of insurance companies to continue to provide access to large Preferred Provider Organization networks, and the cost savings realized, by allowing health care providers who do not participate in a PPO network to receive payment from an insurer even though they have refused to participate in the network.
PPOs work by establishing contracts with health care providers who participate in networks of physicians and other providers. Providers agree to accept a discounted fee in return for having access to the pool of patients within the PPO and receiving direct payment of fees from the insurer. This substantially reduces health care premiums. If the patient uses an out-of-network provider, the insurer pays directly to the patient who then pays the out-of-network provider.
SB 1122 will require insurers to pay out-of-network providers in the same manner as in-network providers, thus allowing that provider to jack up the patient’s costs by balance billing them. Further, it reduces the amount of patients available to the in-network doctors who accept lower payments thus destroying the supply and demand variables that made the cost sharing arrangement possible. This will decimate the networks that took a great amount of time and effort to build, and it will give out-of-network providers access to in-network patients without any consideration.
We are calling on Gov. Crist to reject this greedy maneuver that will do harm to Floridians already suffering economically due to the national recession. The Governor has led the way on working to reduce health insurance costs, but this legislation will greatly harm that effort. Breaking up cost saving networks and balance billing unsuspecting patients is bad medicine. Floridians deserve better.
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