Hearing closes on Real-time Explanation of Health Benefits bill

A Kansas Senate committee on Tuesday ended its two days of hearings on a proposal that would require insurance companies to provide “real-time” information about their benefits for specific medical treatments to doctors and their patients.

Supporters of Senate Bill 251, which was sponsored by Sen. Jim Denning, an Overland Park Republican, testified on the bill earlier in the session. Insurance lobbyists spoke against the measure on Tuesday.

They said the proposal’s supporters underestimated the complexity of implementing it, should it become law.

The bill was before the Senate Committee on Financial Institutions and Insurance. It would require insurers to electronically provide clinicians with a prompt estimate of the amount that a patient would pay for a pending medical procedure. Proponents of the bill said the information would allow the patient to make better decisions concerning their treatment.

“This legislation seems to be addressing a particular area of health care and assuming that all health care providers work identically,” said William Sneed, a Topeka lawyer who represents America’s Health Insurance Plans, “Not all health care providers are the same. Simply passing a piece of legislation for one particular area does not mean the legislation is good for all health care providers.”

The bill, if passed as written, would become effective Jan. 1, 2015, three months after an Oct. 1, 2014 federal deadline for the implementation of revamped diagnostic codes called ICD-10 under Health Insurance Portability Accountability Act (HIPAA) guidelines.

Health plans currently are focused on retooling their systems to accept the ICD-10’s new coding. SB 251 would require the health plans to divert critical financial and personnel resources away from the transition, Sneed said in written testimony.

According to the centers for Medicare and Medicaid Services website, ICD-10 will replace ICD-9 as the coding set used to report medical diagnoses and inpatient procedures. ICD-10 provides a more comprehensive data set and updates to outdated codes.

Insurance lobbyists also questioned the binding nature of the information transactions.

The litany of non-covered services, preventative care treatments, screening tests and bundling rules that would need to be considered in a predetermination request would make advance benefit determinations difficult, according to Brad Smoot, representing Blue Cross Blue Shield of Kansas, the state’s largest private health insurer.

“Binding the insurer to an estimate that is made at a single point in time is unrealistic and could work to the detriment of the provider or patient,” Smoot said. “Insurers need additional information from providers to help respond to a predetermination request with the details required in SB 251.”

But Denning said the bill wasn’t intended to bind insurance companies to their preliminary explanations, but to ensure that they provide prompt estimates to clinicians.

Under SB 251, health plans would be required to sort constantly changing data, adding to the difficulty of making prompt claims decisions, industry spokespersons said.

“The information health plans are required to respond with can change between the time the patient walks in the doctor’s office and walks out of the doctor’s office,” said Marlee Carpenter, executive director of the Kansas Associations of Health Plans.

Carpenter said in written testimony that patients often have additional claims pending between the initial predetermination and a procedure making it difficult to determine if a patient had met their deductible in advance.

Insurance representatives said providing real-time EOBs is further complicated by the volume of claims handled by insurance companies.

“The health insurance industry processes thousands of claims hourly in an attempt to keep up with the enormous scope of health care and insurance,” Sneed said. “It is simply naïve to think the only thing that goes on within the health care system are those claims that are made in Kansas.”

The bill would require the following information be provided by insurers to health care providers at the time of a predetermination request:

• The patient’s cost, including deductibles, coinsurance and co-payments,
• The physician’s payment,
• Any denial of service,
• Any reduction or increase of any payments from the agreed fee schedule, and
• Whether any of the services provided would be bundled with other services and why.

The committee chair, Sen. Robert Olson, an Olathe Republican, said he was still considering what action, if any, the committee would take next on the measure.