Insurers challenge law on choosing providers


Published: Saturday, January 11, 2003 at 6:01 a.m.
Last Modified: Friday, January 10, 2003 at 9:52 p.m.

Facts

What's at stake

Kentucky's HMO industry is challenging a 1994 state law that says an insurance company must do business with any state-recognized health provider who is willing to accept the insurer's reimbursement rates and other contract terms.

FRANKFORT, Ky. - When it comes to health care, Misha Glendening's Eddyville Family Medical clinic is practically the only game in town in little Eddyville.
But some insurance companies won't do business with her - and won't cover her patients' visits - because she is a nurse practitioner, not a doctor.
Situations like Glendening's are at the center of a potentially far-reaching case that will be argued Tuesday before the U.S. Supreme Court.
At issue is whether health insurance companies are free to choose which doctors and other professionals they include in their provider networks.
Kentucky's HMO industry is challenging a 1994 state law that says an insurance company must do business with any state-recognized health provider who is willing to accept the insurer's reimbursement rates and other contract terms.
The industry says that to maintain quality and hold down costs, it needs the right to choose the professionals it wants to deal with.
The legal dispute could have implications for patients and health care professionals across the country.
Among them is Glendening, an advanced registered nurse practitioner in Eddyville, a town of 2,350 in far western Kentucky about 100 miles north of Nashville, Tenn., where the biggest employers are two state prisons.
Under Kentucky law, she is a recognized health provider and can offer much the same treatment as a physician. She has some authority to write prescriptions and can admit patients to a hospital. But some insurance companies refuse to sign her up.
Other nurse practitioners and some other health care groups, notably podiatrists and chiropractors, have also battled with insurance companies.
"It baffles me how we can pay them money to tell us where we can go and what we can do - but we do," Glendening said.
Glendening said patients in small communities do not have many choices for health care and insurers should not be allowed to further restrict access.
She said one family of five, whose employer changed insurance companies, keeps on visiting her, and she charges them only the co-payment of $10 or $15. She is not getting any further reimbursement from the family's insurance company.
"I already have a relationship with the patient and a moral and ethical responsibility to continue their health care," Glendening said. "In that case, it has been my choice to continue to serve that family, essentially for free."
The insurance industry, through the Kentucky Association of Health Plans, argues that Kentucky's "any willing provider" law collides with a federal law that gives the federal government sole authority to regulate employee benefits. The so-called ERISA law is designed to ensure that employee benefits, such as pensions and health care, are not subjected to dramatically different rules in each state.
Kentucky's law "contributes to the rising cost of health care," said Melody Shrader, executive director of the association.
The Kentucky Insurance Department, joined by doctor groups and more than 20 other states with similar laws, has argued that the "any willing provider" law is well within the state's authority to regulate the insurance industry.
A federal judge and a divided federal appeals court have sided with the state on what is a technical legal point but has very real consequences for insurance companies, patients and health care providers.
Kentucky Insurance Commissioner Janie Miller said the "any willing provider" law helps bring managed care to rural areas and other places with few health care providers, and also helps patients maintain a relationship with their doctor.
"Ultimately, I think it's just good patient care," Miller said.

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