Provider Stability Act First of its Kind in U.S.

The Tennessee Medical Association scored a major policy win as both chambers of the Tennessee General Assembly unanimously passed SB437/HB498, known as the Provider Stability Act.

Sponsored by Sen. Bo Watson (R-Hixson) and Rep. Cameron Sexton (R-Crossville), the legislation revises various provisions to address the timing and notification behind changes to a provider's fee schedule by health insurance entities. The TMA, which represents more than 9,000 physicians across the state, has pushed the measure since 2014. Signed by Gov. Bill Haslam on April 5, the new law (Public Chapter 88) will go into effect Jan. 1, 2019 and is the first of its kind in the United States.

Keith G. Anderson, MD

"This is a huge win for physicians and all healthcare providers in Tennessee," said TMA Immediate Past President Keith G. Anderson, MD, of Memphis. "TMA listened and has responded to members' growing frustrations by bringing some stability and predictability to the marketplace."

Although medical practices, hospitals, health systems and other healthcare providers entered into contracts with health plans to spell out the fees for healthcare services provided to patients covered by that health insurance plan, the TMA said such contracts had been routinely written to allow insurers to lower payment at any time, for any reason.

The Provider Stability Act requires a health insurance entity to provide notice to a healthcare provider of any material change made at the sole discretion of the insurance carrier to the entity's previously released provider manual or reimbursement rule and policy at least 60 days prior to the effective date. It also limits fee schedule changes to once in a 12-month period and requires 90 days notice of those changes.

TMA officials said unexpected changes in reimbursement had real-world financial consequences and could lead to a physician dropping a specific service or dropping out of a network altogether. In those cases, they argued, patients paid the price by losing access to a service, having to pay out-of-network fees to continue seeing a physician, or being forced to switch physicians to stay in network. In rural areas with fewer numbers of physicians, specialists, practices and facilities, such scenarios had a magnified effect on access and choice.

Russ Miller

"This effort grew from our planning discussions with our members who were increasingly frustrated by having to work in shifting sand when it came to the payment policies of health insurance companies," said TMA CEO Russ Miller, CAE. "We looked around and found no other state had addressed this issue so we rolled up our collective sleeves and dug in. It did take four very long years, but any time you try to break out of the mold of the way it's always been done, you are going to face some serious opposition." Miller said he was particularly proud of the physician leaders and TMA government affairs staff who "weathered some brutal storms" to help make the bill into a law.

"The most critical piece was having a real champion in the legislature in Senator Bo Watson, who refused to let the issue die," continued Miller. "Because of him and our team, physicians, medical practices and other providers will find more predictability and less turbulence in their reimbursement contracts with the insurance industry."

Miller said the measure was supported by other statewide organizations, as well, including the Tennessee Hospital Association, Tennessee Medical Group Management Association, and a number of specialty organizations, teaching hospitals and nurses. He thanked the many providers and administrators who made calls, wrote letters and scheduled meetings with legislators to push for the bill and called passage of the Provider Stability Act an example of the value of organized medicine to effect change.

RELATED LINKS:
TMA Legislative Affairs
Provider Stability Act Summary