News & Updates


Proposal is bad medicine

Herald-Tribune Guest Columnist
Published: Wednesday, June 3, 2009 at 1:00 a.m.

Florida continues to struggle to reduce the amount our residents pay for health insurance as medical costs continue to rise. Yet there is one area where we have seen progress in controlling medical costs and, therefore, containing the amount Floridians pay: That is in the preferred provider organizations, or PPOs.

However, some very powerful groups in the medical profession want to break up these networks and increase the cost of care.

Senate Bill 1122, which relates to direct assignment of benefits, is the vehicle being used. This legislation not only increases the cost of health care, but also negatively impacts access to health care providers.

SB 1122 would significantly reduce the ability of insurance companies to continue to provide access to large preferred provider organization networks, and the cost savings realized. It would allow health care providers to receive payment from an insurer even though they have refused to participate in the PPO network.

PPOs work by establishing contracts with health care providers, who participate in networks of physicians and other providers. Providers agree to accept a discounted fee in return for having access to the pool of patients within the PPO and receiving direct payment of fees from the insurer. This substantially reduces health care premiums. If the patient uses an out-of-network provider, the insurer pays directly to the patient, who then pays the out-of-network provider.

SB 1122 would require insurers to pay out-of-network providers in the same manner as in-network providers; out-of network providers could then jack up the patients’ costs by billing them for the balance due. SB 1122 also would reduce the amount of patients available to the in-network doctors who accept lower payments, thus destroying the supply-and-demand variables that made the cost-sharing arrangement possible.

This will decimate the networks that took a great amount of time and effort to build, and it will give out-of-network providers access to in-network patients without any consideration.

We are calling on Gov. Crist to reject this greedy maneuver that will do harm to Floridians already suffering economically due to the national recession. The governor has led the way on working to reduce health insurance costs, but this legislation will greatly harm that effort.

Breaking up cost-saving networks and balance-billing unsuspecting patients is bad medicine. Floridians deserve better.

Bob Lotane is communications and political affairs director for the National Association of Insurance and Financial Advisors-Florida.On the Web: