My name is Dr. Andrew Kleinman and I am a plastic surgeon practicing in Rye Brook
in Westchester County, and the President-elect of the Medical Society of the
State of New York. On behalf of New York's physicians, I very much appreciate
the opportunity to share with the Committees the difficulties physicians are
experiencing with the implementation of health care reform, including the roll-out
of New York's Exchange, and more importantly, what this may mean for our patients
who will be covered under these new plans.
Certainly, within MSSNY, we represent physicians with a wide range of perspectives
regarding the new health reform law, including many physicians who have supported
the law as a way to increase insurance coverage for our patients and address
health insurer abuses. Nevertheless, regardless of their political perspective
on the new health care law, New York's physicians are grappling with an array
of issues which could have serious negative impacts on patient access to care
and threaten to undermine one of the central principles of the new law to assure
that patients have timely access to needed quality health care.
Many of these issues are related to the contracting abuses of health insurers
participating in New York’s Exchange. However, the issues we face are
not exclusively Exchange related. Other critical issues facing physicians relative
to health reform implementation include loss of health insurance coverage that
they were providing to their employees as well as themselves, and their elderly
patients facing a disruption in their treatment relationships as a result of
thousands of physicians being dropped from Medicare Advantage plans.
We remain committed to working with state policymakers, patient groups and
other healthcare stakeholders to assure that New York’s Exchange fulfills
its promise to expand the availability of affordable and comprehensive health
insurance coverage. However, the below problems we list below must be addressed.
IMPLEMENTATION OF NEW YORK'S HEALTH INSURANCE EXCHANGE
I would begin by noting that New York State officials are to be commended for
their efforts to create an online marketplace that has been relatively free of
the difficulties that have plagued the federal healthcare.gov website. And they
are to be commended for repeatedly making themselves available to participate
in various meetings and other forums to educate physicians regarding the development
of New York's Exchange and for their responsiveness to the many questions raised
by physicians and their representatives regarding issues related to implementation
of the Exchange.
However, we have expressed to them and continue to have serious concerns that patients enrolled in these products will soon find that their treatment options may be more limited than they thought. The problems we identified by physicians include significant inaccuracies on insurer websites regarding which physicians are actually participating in these networks, vague communications with physician offices that fail to clearly specify that physicians are being directed to participate in Exchange products unless they opt out, failure to specify payments for care delivered to patients enrolled in Exchange products, and for many, discovering that the payments for such care are grossly inadequate compared to other products offered by that insurer with whom the physician was participating.
Further exacerbating these problems, the insurers are failing to offer consumers adequate out-of-network coverage options, which severely short-change patients and limit their choice of physician. Frankly, we believe this is a willful attempt by insurers to coerce physicians into their networks, rather than negotiating fair contracts with physicians. And we fear our patients will pay the price.
These problems are exacerbating the already precarious financial position facing
many physician practices that threatens their very viability. For example,
there appears to be a significantly increased reliance on patient first dollar
such as the use of large deductibles, not only for products in New York's
Exchange but also other non-Exchange products that likely are the result of
insurers' efforts to be complaint with the ACA. This will significantly increase
billing and collection costs. Meanwhile, Medicare payments have essentially
flat for over the last decade (and for many physician specialists has gone
down), which has also caused the same for commercial payors which base their
Yet, at the same time all the costs of running a medical practice,
including the huge cost of medical liability insurance in New York State
(which are among the highest premiums in the country), and other normal small
costs, such as utilities and local property taxes, continue to rise steadily
These increasing costs are exacerbated by required compliance with government-mandated
programs that demand ever more expensive software and administrative costs.
The confluence of these factors place small practice physicians in an ever-tightening
financial vise that threatens to shutter many private physician offices,
and with them, the 330,000 jobs New York statewide¹ that the private
practice of medicine generates. Undoubtedly, more and more physicians will
to close their practices and join large hospital systems in order to continue
to deliver care, which in turn will reduce patient choice, reduce competition,
and has been shown over and over again (across the country) to drive up the
cost of health care. Worse still, many experienced but frustrated physicians
have indicated they may simply retire and close their practices, further
exacerbating the existing access to care issues. Yet policies continue to
be pursued that
will drive more and more doctors out of business.
¹According to a 2010 study prepared for
MSSNY by Specialized Analytics and Kavet, Rockler & Associates.. For
more information, http://www.mssny.org/mssnyip.cfm?c=s&nm=Economic_Impact_Reports
As has been reported in numerous media outlets, MSSNY conducted a survey
of its physician members to ascertain whether they were being treated fairly
health insurance companies offering products in New York's Health Insurance
Exchange. Preliminary results of our survey show that there is much confusion
and concern among physicians regarding the information, or in some cases
the lack of information, being provided by health insurance companies offering
coverage in New York's health insurance exchange. Failure to adequately address
these concerns could
result in patient-access issues once the coverage becomes operative in January.
While responses to the survey continue to be gathered, the initial response
showed that 1/3 of respondents indicated that they did not join the panel
of any health insurance Exchange product, but nearly 40% of physician survey
respondents actually did not know whether they were participating in an Exchange
plan or not. This is likely the result of a lack of necessary information
being provided to physicians by health insurance companies with whom they
may currently have participation agreements for other product lines sold
by that company.
Of greatest concern, we have heard reports from many physicians who believe
they have been inappropriately listed as a participant in a health insurer
Exchange plan. Certainly it is possible that such listing is the result of
a pre-existing contract that the physician has with a health plan, containing
an "all products
claus" or may be the result of an Exchange plan utilizing a "rental
network" entity with which the physician is enrolled. But we have also
heard physician reports of health plans sending vague notices that the physician
will automatically be in the Exchange network unless the physician affirmatively
"opts out", or other notices that are not even clear that the physician is being
directed to participate in an Exchange product.
We have also had reports from physicians of the great difficulty in opting
out, or reporting that they had sent certified letters indicating that they
had opted out, only to find it that they are still actually listed on the
insurance company website as participating in the Exchange. Other physicians
seeing their names on websites as participants without ever actually receiving
any documents from an insurance company requesting or notifying them of their
participation. For example, one Long Island cardiology group indicated that
they had sent a certified letter to United opting out of Exchange products,
yet still found themselves listed. In another case, a family practice group
in Tompkins County reported that American Progressive has inappropriately
listed them as participating in their Exchange product. And in yet another
a large Long Island neurosurgical group reported their names being listed
on the multiple insurers' websites for Exchange products despite the
fact they had never received any communication from these insurers to inform
that they have been included in these Exchange network, or to be given an
opportunity to opt out.
We think these examples are only the proverbial "tip of iceberg" regarding
the disparity between the insurers' lists of participating physicians
in their Exchange products and whether these physicians are actually contractually
obligated to participate in these Exchange products. We have been advising
physicians across the State to confirm which Exchange plans they may be listed
participating with. However, even this can be difficult since the Exchange
does not have an easy "Search" function for a physician or patient
to identify which plans a physician participates. There is one webpage on
the "New York State of Health" website that contains a link to
each of the Exchange plans' webpages, but even searching the insurers'participating
provider webpage does not provide clarity since some insurers merge their
provider lists across multiple products.
Insurers including these physicians on their participant lists are misleading
the public and must be investigated and required to prove to New York State
that the physicians they list as participants have truly agreed to participate.
And they must be penalized for their inaccurate postings. If plans are required
to "come clean" regarding the manner by which physicians have
been listed as participants in the Exchange products, we may very well find
these networks are not in fact adequate to provide the care that patients are expecting to receive in enrolling. We have asked the New
York Exchange officials to investigate the manner by which health insurance
companies have put together their Exchange networks to assure the information
they are providing is truly accurate.
We appreciate that the State of New York has repeatedly committed to conduct
regular and frequent review of network adequacy since we are concerned about
the manner by which health plans are listing physicians as participants in
their networks. To assist in their review, we have requested a full listing
of all the Exchange plan networks so that our physicians can offer input
as to whether the networks are truly adequate in all the different regions
of the State. To date, however, we have not received these lists.
Conversely, another problem we have seen is physicians being unable to participate
in an Exchange product despite their willingness to participate and their
previous relationship with an insurer. Our survey showed that nearly 1/3
of the respondents indicated that they were not asked to participate in an
Exchange product, despite the fact that they were a participant in other
products offered by the insurer. There is no good reason for these physicians
to be excluded since they are already well-known to the plan. This problem
must also be addressed.
Finally, we have advised New York State officials that, even assuming that
network listings are accurate, we fear that many physicians, if permitted
by their contracts, may choose to withdraw their participation in these plans
when they come to grips with low network reimbursements, high deductibles,
and the problems associated with the 90-day Grace Period, as discussed below.
It is easy to foresee many patients signing with an Exchange plan based on
inaccurate physician-participation information, only to find that that the
physician is not actually a participant when care is sought.
To assure that physician participation lists are, in fact, accurate, we urge
you to pass legislation that would require an insurer to enter into a direct
contract with any physician who is going to participate in an Exchange product.
Moreover, we would urge you to require health insurers to give the opportunity
to physicians to participate in their Exchange products if they already participate
in other products offered by that insurer.
Lack Of Transparent And Adequate Payment
Another concern raised in MSSNY/s survey was the lack of available fee information
for the care that will be provided to patients enrolled in these Exchange
products. According to the survey, 3/4 of the physician respondents indicated
that they had not received any information from health plans regarding the
reimbursement that they would receive for providing this care, despite the
fact that New York law requires a health insurer to disclose payment information.
We have urged New York State officials to assure that health insurers are
complying with this law.
And we have received reports from many physicians that, when they do receive
information regarding payment for Exchange products, such payments are grossly
inadequate. While antitrust rules prohibit MSSNY from attempting to collect
specific data, our preliminary survey results demonstrated that, of those
physicians who did receive fee information, a significant majority indicated
reimbursement generally was "well below" what the insurer pays
in other contracts.
It is an outrage that this can be permitted. We suspect that insurers have
been able to get away with it because of the tactics they have used to give
the appearance of having an adequate physician network for their Exchange
products. Again, we urge you to assure that health plans be truthful about
the participants in their networks and require direct transparent contracts
with the physicians who will be participating in these products.
Further complicating this issue is that, no matter what the fee schedule
may be, many patients will face incredibly large deductibles with these new
plans. Certainly we understand that this is the result of compliance with
the ACA that requires the offering of bronze and silver health insurance
that in effect permit enormous patient cost-sharing that may require a patient
to pay thousands of dollars out of pocket before any insurer coverage begins.
But to better assure that patients and their physicians are aware of these
potentially huge out of pocket cost responsibilities, we have asked the State
to assure that deductible information be expressly stated on the patient's
insurance cards and that information regarding the deductible outstanding
be communicated to the physician when calling the insurance company for eligibility
verification. Trying to collect a large deductible from patients with limited
income, months after services have been provided, may be an exercise in futility
and may cause physicians to avoid participation in the Exchange, further
Inadequate Out of Network Options
Exacerbating the problem with these limited networks is that there are very
few options for consumers to purchase coverage in the Exchange that enables
them to see the physician of their choice outside the plan’s network.
In the small group market, only one company, United/Oxford is offering coverage
with out of network option in the downstate Exchange market and shockingly,
not a single company is offering out of network coverage in the downstate
individual Exchange market.
Exchange officials sought to address this issue by requiring that a company
that provides out of network options outside the Exchange provide equivalent
coverage inside the Exchange. However, in a clearly brazen effort to coerce
physicians to accept unfair one-sided contracts to participate in an Exchange
plan, insurers have simply decided to not offer this coverage at all, depriving
New Yorkers the right to be able to even purchase coverage to see the physician
of their choice. This is an affront to all New York State policymakers who
for years have fought to assure that those in need of specialized care are
able to obtain the coverage that they need to cover the costs of their care.
In addition to assuring adequate networks, we urge the Legislature to pass
a law to assure that patients have access to out of network coverage in Exchange
products and to assure that such benefits are comprehensive. Certainly we
are supportive of legislation Senator Hannon has just introduced (S.6207)
to require insurers both inside and outside the Exchange to offer out of
network coverage to enrollees.
90-Day "Grace Period"
Further exacerbating all the above issues is the impact that the 90-day grace
period rule established through CMS regulation will have on the financial
stability of physician practices and on the ability of patients to access
care from the physician of their choice.
As you may know, the purpose of the grace period is to provide the patient
with 90 days to make a premium payment before they are dropped from coverage.
While the intent to give patients a greater period of time to meet premium
payment deadlines is laudable, the numerous circumstances where there will
be perceived but not actual coverage is going to cause great confusion for
physician offices. Working with the AMA and state and national specialty
medical associations, we have asked Congress to pass legislation to repeal
this rule which is going to cause great uncertainty regarding patient eligibility
status, or at least reduce its length.
It is critical to the sustainability of physician practices across the state
that payment for services rendered is received in a timely and reliable manner.
Physicians are a business like any other. Rents, malpractice coverage, employee
costs, etc. cannot be paid without a steady stream of revenue. As noted above,
many physician practices are already going to be jeopardized as a result
of the insufficient payments and high deductibles being imposed in Exchange
products. To the extent services are rendered and revenue is not received
on a timely basis, it further threatens the financial stability of these
practices. Physicians being required to collect bad debts from patients delinquent
on their premiums is expensive and impractical.
Moreover, we are concerned that, even if the delayed premium payments are
made, health insurers will continue to sit on claims. We have asked
the New York
Department of Financial Services to require that, upon notice that the deficiency
has been cured, the plan must make immediate payment of the claim, but in
no instance shall such payment be made later than two business days. We are
that the guidance on the DFS website regarding the "grace period" essentially
enables insurers to take up to 30 days to make payment following the enrollee's
payment of the delayed premiums even if the insurer has had ample time to
investigate the whether the claim should be paid. We have also asked that
the plans be
required to update their eligibility systems within twenty-four hours of
receiving notice that a patient has entered a grace period and that plans
to make this information, including the date that the Grace period began,
available to physicians and other providers either telephonically and electronically.
CHANGE TO HEALTH INSURANCE COVERAGE
It is also important to note the impact that implementation of the ACA for
physicians goes beyond providing care, but also upon providing coverage to
their employees. Nearly 1/3 of the MSSNY survey respondents indicated that
the health insurance coverage they provide for their employees had changed
significantly, with a significant percentage of these respondents indicating
that the significant changes included imposition of deductibles, increased
patient cost-sharing, reduced provider networks and elimination of out of
In summary, New York's physician community is very anxious to work
with you and all other healthcare stakeholders to assure a successful implementation
of New York/s health insurance Exchange and other provisions related to implementation
the ACA. As listed above, there is a myriad of problems that are evident
insurers offering coverage on the Exchange. These problems must be addressed
immediately if we are to assure that patients have access to the care that
they expect and deserve when they purchase coverage on the Exchange.
I thank you again for the opportunity to present testimony today, and am
happy to answer any questions you may have.