AMA Testifies to Insurance Commissioners

Armen Hareyan's picture

Health Insurance and Health Plan Regulation

The American Medical Association (AMA) called on the National Association of Insurance Commissioners (NAIC) to require health plans to correct unfair business practices that harm the ability of patients and physicians to manage the financial aspects of health care.

In testimony provided yesterday afternoon, AMA Chair J. James Rohack, MD told the NAIC's Health Insurance and Managed Care Committee that there are insufficient legal safeguards and state regulatory oversight to prevent health plans from concealing information on fees they set for medical services. "There is a pervasive refusal by health plans to disclose information regarding what they pay and how they pay," said Dr. Rohack. "The AMA believes that the shroud of secrecy covering the entire health care payment process must be lifted."

The AMA believes there is no reason for health plans' refusal to provide their pricing list for medical services. Refusal to provide pricing information only serves as a means for health plans to increase profits by keeping patients and physicians in the dark. "Can you imagine any other small business tolerating not knowing how much it was going to be paid for services it rendered," asked Dr. Rohack. "Other industries have long recognized the need for transparency in business transactions."


Dr. Rohack noted that physicians often submit the same claim for the same service under the same contract and will receive different payment regardless of the contracted rates. "This is a perfect example of how confusing the practice environment has become for physicians and how difficult it is for physicians to determine the actual payment for the provision of health care services."

Dr. Rohack also called for regulatory oversight of "rental network PPOs" or "leased PPOs" which he described as a secondary market trafficking in physician payment discounts. "Given the huge amount of health care resources these intermediaries siphon from the system, it is extremely troubling that they function with little to no oversight," said Dr. Rohack. "We believe that this entire secondary discount market must be carefully scrutinized and regulated."

The AMA presented the NAIC with a detailed summary of specific provisions that it believes are necessary for model standards designed to strengthen the health insurance system for everyone.


CHICAGO - American Medical Association