In May of 2006, a bill supported by 85 out of 100 Colorado legislators came across then-Gov. Bill Owens’ desk. S.B. 198 would have put an end to the practice of large health insurance companies taking advantage of family physicians by having their expert attorneys write contracts that (among other things) are purposely obfuscated and unfair, allow the insurance company to change the contract without notifying the physician, and trick the physician into participating in plans that are disguised in the contract for the managed care organization’s plan that they didn’t sign.
The health insurance companies are able to take advantage of the physicians because they can afford expensive lawyers to write the confusing contracts. The average physican cannot afford or find attorneys skilled enough to review multiple contracts from various insurance companies, all worded differently. Even if they could it would be a huge administrative waste and a burdon on our healthcare system.
A 2004 MGMA study found that the average 10-physician practice will spend as much as $247,500 per year on “unnecessarily complex, wasteful, duplicative administrative tasks that add no value to a practice or its patients.”
Dispite the overwhelming support of other legislators in Colorado, and the enormous benefits to our health care economy, Bill Owens vetoed the bill. In his May 26, 2006 veto message, then-Gov. Bill Owens stated “In its final form, S.B. 198 creates an unnecessary intrusion by the government into the contracts between private parties.” In the veto message, Gov. Owens cited support from the Pueblo Chieftan and the Rocky Mountain News.
Now that Colorado has a new Governor, the legislature put the bill on his desk again. And Gov. Bill Ritter signed the bill into law on March 30. The legislation, Colorado’s , creates standardized language in contracts between physicians and health insurance companies.
“The bill lets doctors actually see what they’re going to get paid, why they’re getting paid that amount and what was used to calculate the fees,” said Larry Kipe, M.D., of Craig, Colo., president of the Colorado AFP.
“The burden of administrative complexity comes from a variety of sources. However, standardizing basic contract terms to make them easier for groups to understand and making the contracting process more equitable is ‘low-hanging fruit.'” said William Jessee, M.D., MGMA president and CEO