by: andrew kitchenman/alaska beacon
A group of health care providers in Alaska sued The state government is trying to maintain state regulations that set a floor on how much private health insurance plans will pay for out-of-network services.
The Alaska Department of Insurance plans to repeal this rule starting January 1st. The rule, which has been in effect since 2004, applies when a private insurance plan pays for care provided by someone outside the provider’s network.
Without the rule, there is “no incentive for insurance companies to negotiate with providers,” said Dr. John Morris, president of the Physicians Union, which filed the lawsuit Monday in Anchorage Superior Court along with other health care provider groups. ”.
The rule requires out-of-network providers to be paid at a level equal to the 80th percentile of the rates charged by all providers for their services. For example, if five providers charge for their services, the out-of-network provider must be paid at the second-highest level among the five providers.
This rule was introduced to ensure that patients do not have to pay high amounts that are not covered by their insurance companies.
In 2020, Alaskans paid According to federal statistics tracked by KFF, a health-focused foundation, doctors bill more than 50 percent more per person for medical services than in other states.General health Spending It was second in the state after New York.
State officials said data shows the rules they are eliminating are putting upward pressure on health spending.
The providers who filed the lawsuit deny any link between the rule and Alaska’s high prices, saying the data the state used was outdated or opaque. The lawsuit describes the process the department followed to deregulate as “arbitrary and unreasonable.” Morris said the repeal is in the interests of Premera Blue Cross Blue Shield of Alaska, Alaska’s largest private insurance company.
“Insurance companies want to make more money, so it’s a little bothersome to denigrate an entire profession,” he says.
Dr. Stephen Compton, president of the Alaska State Medical Association, said the main reason for the high cost of health care is the high cost of providing all services in the state.
“It’s an expensive place to run something,” he says.
Compton said health care costs, quality and access are all interconnected. As costs fall, quality and access may decline.
Compton and Morris said Premera aims to reduce the number of in-network providers and ultimately leave patients paying their bills out-of-pocket. A recent federal law, the Anti-Surprises Act, prohibits such surprise billing for emergency department visits and other services provided by out-of-network providers at in-network hospitals. But providers argue that the law would leave many other out-of-network services unprotected.
The lawsuit seeks to block the rule’s repeal and also seeks access to communications between state officials and Premera leaders.
The lawsuit was filed by a group chaired by Morris, the Coalition for Reliable Healthcare Access, the Alaska Medical Group Management Association, the Alaska Physical Therapy Association, and the Alaska Chiropractic Association.
In response to a request for an interview, a spokesperson for the Health Department emailed a statement saying the decommissioning process complies with state law. The agency noted that Alaska is one of the only states that mandates minimum payment levels. Additionally, the department noted that private insurance plans account for only 20% of Alaska’s health insurance coverage, and the rule does not apply to Medicare, Medicaid, Indian Health Service, Department of Veterans Affairs, Tricare, or self-funded plans. .
“Health care costs are directly related to the premiums consumers pay,” the statement said. “In order to reduce premiums, Alaska concluded that eliminating the 80th percentile would be a first step.”
The division said the Alaska Chamber of Commerce supports the repeal, and employers said in a 2019 state survey that lowering health care costs was one of the top priorities needed to improve Alaska’s economy. he pointed out.
A Premera spokeswoman said executives familiar with the repeal were unavailable for interviews due to the Thanksgiving holiday and that the company typically does not comment on pending litigation.
The case was initially assigned to Superior Court Judge Adolf Zeman.
