ANNAPOLIS – A House committee Thursday approved two bills to force insurance companies to pay for preauthorized services and limit the time they could take back money paid in error, after insurers and physicians battled over the measures in a hearing this week.
The bills, sponsored by Delegate John Donoghue, D-Washington, come after legislation passed last year was unable to satisfy both sides.
While the vote was on House bills, the identical measures were debated in the Senate Finance Committee Wednesday.
Committee Chairman Sen. Thomas Bromwell, D-Baltimore, chastised the lobbyists for not resolving the issue with last year’s bills.
“We want to solve this problem,” Bromwell said. “We want doctors to get paid, we want insurance companies to pay, and more importantly, we want our people to get quality care.”
The first bill concerns preauthorization, the insurer’s approval that doctors receive before a medical procedure. The bill would mandate payment after approval except in cases of fraud or improper coding.
“If they say OK, they should pay,” said Pegeen Townsend, legislative adviser for the Maryland Hospital Association.
Denials often occur because a patient changes insurance coverage between the authorization and the procedure, said Robert Enten, spokesman for the Maryland Association of Health Plans.
Enten said doctors should call insurers the day of the procedure to verify the patient’s coverage.
Why should the burden be on the doctor, said Sen. George Della Jr., D- Baltimore?
“You (the insurance companies) are the only ones who know if the patient is a member, yet you don’t take the initiative to call to let the doctor know,” Della said.
Enten said it would not be economical for an insurance company to inform doctors when a patient is dropped, and reminded lawmakers that “a preauthorization is not an absolute guarantee of payment.”
Voting against the bill in the House committee, Delegate Richard LaVay, R- Montgomery, said insurers would stop preauthorization if the legislation passed, denying patients the right to know if their procedure is covered. LaVay’s amendment to provide more exemptions for retroactive denial failed.
The second bill would prohibit retroactive payment denials later than six months, unless information submitted was fraudulent or incorrectly coded. Current law has the same restriction, yet insurance companies have found a way around it. While money cannot be deducted from future payment, insurers can ask doctors to issue a check immediately.
The Maryland medical society, MedChi, supports the retroactive denial bill and said insurers should have the same restrictions as doctors, who have six months to submit a claim for payment.
Dr. Janet Brown, a Glen Burnie radiologist, said her practice is frustrated by administrative work required to deal with retroactive denials. The practice had 45 cases of retroactive denials in 1999, 30 cases in 1998 and in 1997.
The practice is involved in a retroactive denial from 1995, said Cheryl Tucker, Brown’s office manager.
“I went to medical school to practice medicine,” Brown said. “I did not go to medical school to become a (certified public accountant).”
Health maintenance organizations are concerned the new bill includes capitation fees, a monthly allowance a doctor receives for treating a patient. The insurer will reclaim the monthly fee for a patient no longer covered, a process that can take more than six months, said Fran Doherty, spokeswoman for CareFirst BlueCross BlueShield.
House Economic Matters Committee Chairman Michael Busch, D-Anne Arundel, compared the practice to a restaurant owner docking a cook’s pay when patrons don’t pay for their meals.
New technology could be the answer to these dilemmas, one senator said.
Sen. Delores Kelley, D-Baltimore, said both problems could be circumvented if insurance companies provided doctors with a list of covered patients over the Internet.