NASHVILLE – Tennessee doctors are praising a new state law that adds much-needed financial predictability in contracts between health plans and healthcare providers.
The Provider Stability Act passed unanimously in both chambers of the Tennessee General Assembly and was signed by Governor Haslam on April 5.
Senate Bill 437/House Bill 498 was sponsored by Sen. Bo Watson (R-Hixson) and Rep. Cameron Sexton (R-Crossville). It requires health insurance companies to give a 60-day notice to a healthcare provider when reimbursement rates change, if such changes are a result of a policy change at the sole discretion of the payer. It also limits fee schedule changes to once in a 12-month period, and requires a 90-day notice of those changes.
The Tennessee Medical Association, which represents more than 9,000 Tennessee physicians, has pushed the measure since 2014.
No other state currently has these types of provisions in place.
“This is a huge win for physicians and all healthcare providers in Tennessee,” said TMA 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.”
Medical practices, hospitals, health systems and other healthcare providers enter into contracts with health plans to spell out exactly what will the insurer will pay for healthcare services provided to patients covered by that health insurance plan. The contracts are routinely written to allow insurers to lower payment at any time, for any reason.
“The intent of the Provider Stability Act from the very beginning was to have health plans honor network contract provisions and stop the one-sided, ‘take-it-or-leave-it’ rate cuts that threaten physicians’ financial stability, and disrupt patient care,” Anderson said.
When doctors cannot afford to incur an unexpected change in reimbursement from a health plan they may be forced to stop providing a procedure or drop out of the network altogether. Patients suffer by having to pay higher “out-of-network” fees for the same service if they want to continue seeing their doctor, or find another doctor who is in their insurer’s network. The new law will reduce these scenarios and help protect the important patient-physician relationship.
According to TMA, passage of the Provider Stability Act was made possible by member physicians, medical practice administrators and others who made calls, wrote letters and emails and visited Capitol Hill to speak directly with legislators about the issue. Several other organizations also supported the effort, including the Tennessee Hospital Association, Tennessee Medical Group Management Association,
Tennessee Radiological Society, Tennessee Chiropractic Association, Tennessee Orthopaedic Society, Tennessee teaching hospitals, practice administrators and nurses.
