MINUTES OF THE

SENATE Committee on Commerce and Labor

 

Seventy-First Session

February 27, 2001

 

 

The Senate Committee on Commerce and Laborwas called to order by Chairman Randolph J. Townsend, at 8:06 a.m., on Tuesday, February 27, 2001, in Room 2135 of the Legislative Building, Carson City, Nevada.  The meeting was video conferenced to the Grant Sawyer Office Building, Room 4401, Las Vegas, Nevada.  Exhibit A is the Agenda.  Exhibit B is the Attendance Roster.  All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

 

COMMITTEE MEMBERS PRESENT:

 

Senator Randolph J. Townsend, Chairman

Senator Ann O’Connell, Vice Chairman

Senator Dean A. Rhoads

Senator Mark Amodei

Senator Raymond C. Shaffer

Senator Michael A. (Mike) Schneider

Senator Maggie Carlton

 

STAFF MEMBERS PRESENT:

 

Scott Young, Committee Policy Analyst

Gayle Nadeau, Committee Secretary

 

OTHERS PRESENT:

 

Lawrence P. Matheis, Lobbyist, Nevada State Medical Association

Marjorie Uhalde, Ph. D., M.D. President-Elect, Nevada State Medical             Association

Marrietta Nelson, M.D., President, Nevada State Medical Association

Donna K. Bybee, CMPE, Administrator, Pulmonary Medicine Associates

John M. Nowins, M.D., OBGYN, Sunrise Medical Surgery Specialists

Robert J. Comeau, M.D., OBGYN Society

Alice A. Molasky-Arman, Commissioner of Insurance, Insurance Division,             Department of Business and Industry

Guy A. Perkins, Jr., Chief Insurance Examiner, Supervisor, Life and Health             Section, Division of Insurance, Department of Business and Industry

Elsa Ozuna Richards, Administrative Director, Reno Diagnostic Center

LuAnn Tucker, Nevada Physical Therapy Association

Bryan Gresh, Lobbyist, Nevada State Psychological Association

Larry Lenkeit, Ph.D., President, Nevada State Psychological Association

Linda G. Gutierrez, Concerned Citizen

Dave England, Chairman, Nevada Coalition of Health Care Providers

Fred L. Hillerby, Lobbyist, Hometown Health Plan

Jack Kim, Lobbyist, Sierra Health Services, Health Plan of Nevada

Helen A. Foley, Lobbyist, Pacific Care/Secure Horizons

Janice C. Pine, Lobbyist, Saint Mary’s Health Network

Keith Beagle, President, Nevada Care Incorporated

Robert A. Ostrovsky, Lobbyist, Employers Insurance Company of Nevada

James L. Wadhams, Lobbyist, representing himself

Donald Jayne, Lobbyist, Nevada Self-Insured Association No. 200

John W. Brouwers, M.D., Anesthesiology Consultants Incorporated

Jim LaBorde, Administrator, Digestive Health Center

Peggy Charles, representing Dr. David F. Charles’ Physician’s Office

 

Senator Townsend opened the hearing on Senate Bill (S.B.) 99.

 

Senate Bill 99:  Makes various changes to provisions relating to prompt             payment of claims to providers of health care.  (BDR 57-132)

 

Senator Townsend asked the testifiers, since everyone is familiar with the issue, to not be repetitive but provide some insight into what they face on a day‑to‑day basis in dealing with this issue.  He said the testifiers’ experiences would help the committee in making a policy statement regarding S.B. 99.

 

Senator Townsend:

The goal, everyone, since we are very familiar with the issue, we would like to have your testimony as long as it is not repetitive, but give us some insight into what you have faced on a day-to-day basis on the front lines of this issue.  Although we have to make a policy statement, it is going to come from your experiences.

 

Lawrence P. Matheis, Executive Director, Nevada State Medical Association:

I have three handouts for the committee that I’ll refer to very briefly.  One (Exhibit C) summarizes the prompt payment features that were passed in Senate Bill 145 of the Seventieth Session in 1999, the affected (Nevada Revised Statutes [NRS]) chapters and what S.B. 145 of the Seventieth Session specifically did.  The second (Exhibit D) summarizes the laws that were affected by the limits on panel fees.  That is what providers could be charged to be on panels.  The third (Exhibit E) is a summary of a survey of physicians regarding their experience of the law’s effect during the first 6 months, from October 1, 1999 through March 31, 2000, of the ten largest plans in the state covered by the law.

 

Senate Bill 145:  Makes various changes concerning health insurers and             administrators. (BDR 57-834)

 

This issue is one that is plaguing, not only physicians, but all health care providers, and has for the last 4 years, or so.  Starting at around mid-1997 and continuing, unfortunately, to today, I think the greatest volume of complaints concern requests we get from physician practices having to do with the problem of being compensated for services they have provided.

 

It is a national phenomenon.  There are class action lawsuits by physicians in Georgia, Texas, and California because of these prompt-payment issues.  There are several national class-action lawsuits going on.  So, what we are seeing is a phenomenon that is beyond just Nevada, but we are trying to take care of it.  I think about 40 states have passed various kinds of payment laws to define timely payment.  During the last session you considered the bill and adopted it without a negative vote in the Senate.  It was clear, since we were doing this for the first time, there might be issues raised that we thought would be easy to implement that might have problems, or might have to come back for cleanup, or for some other issues.  The bill before you, Senate Bill 99, is our effort at addressing specific problems that have occurred during the interim.

 

Mr. Matheis:

You remember the basic law now says from when a claim is filed there are 30 days to pay it.  Within the first 20 days, if the plan or the insurer needs some extra information, they can ask for what they want.  Then, from the date that is submitted, there are 30 days to pay.  We also made it very clear any use of delaying tactics was now illegal in Nevada law.

 

A very odd practice that has emerged in Nevada, and apparently not found in most other states, is charging the provider to be listed on a panel for HMOs, other kinds of managed care, and other kinds of insurers.  While there have been some plans charging credentialing fees during the interim, the insurance commissioner did survey all the health insurers in the state and all the health insurers who had left the state in the 2 years prior, to see if they routinely did this.  She found, in fact, a majority does not charge anything to be on a panel, and those that did charged a relatively small amount.  Others have made it a huge profit center.

 

What is addressed in S.B. 99 takes those issues, which we were very clear on and, very reasonable on in S.B. 145 of the Seventieth Session, and now addresses those things that appear to be a regular problem.  The penalty, which was in the law for not paying in a timely way, was essentially the prime rate plus 2 percent.  As you will notice on the report (Exhibit E), on the experience of the first 6 months after enactment of the law, of the ten largest plans, the plan that was closest to compliance with the 30-day rule was Aetna-US Healthcare, and it took 48.6 days to pay.  Now, this is the experience of physicians reporting to us, approximately 69 practices, ranging from one-person practices to large practices representing 288 physicians.  It only reflects their experience during this time, but it certainly shows their average experience it was taking longer than 30 days to get their compensation.

 

Mr. Matheis:

It was our judgment the penalty was insufficient to produce the appropriate behavior intended in every plan.  So, what we have proposed is a gradated schedule of penalties that, for day 31 through day 60 would be a 12 percent interest payment; for the next 30 days, 18 percent, and for the next 30 days, or however long until it is finally paid, it would be 21 percent.  Also, as an additional encouragement to obeying the law, we would give the insurance commissioner the ability to review their claims-payment pattern.  If they were in substantial compliance, no problem.  If they were not in substantial compliance, they could be sanctioned with a fine of not more than $10,000.  That would probably get somebody’s attention.

 

The other element here is immediately following the last legislative session, when you passed this law, at least one plan and perhaps two others sent out a non-negotiable amendment to every provider contract requiring the interest payment be waived.  So, in each of these sections we have indicated the insurer of the plan cannot require providers to waive their rights under this law.  That was a fairly in-your-face behavior.  We had a number of physician’s file complaints with the insurance commissioner about that particular procedure; it still has not been resolved; so we thought we would just take direct action on it.

 

Several hundred complaints were filed on non-compliance over the last 18 months.  Many of them have been resolved with interest payments being made; many of them are still in the works of being resolved.  We think a more aggressive punishment schedule is likely to result in what we all wanted to do here, which was simply to encourage a better business practice of paying in a timely way.

 

Senator O'Connell:

Larry (Matheis), let me ask you if you have any record of the number of doctors we have lost that have either retired from the profession or who have just decided that it is not worth the fight any longer.  Do you have any kind of statistics on that?

 

Mr. Matheis:

We don’t have statistics; we do have anecdotes.  I can say the California Medical Association and the Oregon Medical Association, which have very similar problems, have just done surveys and analyses of how many physicians have been leaving practice because of, as they identified, this problem with the business side of the practice.

 

In fact, in both California and Oregon, they are ready to declare a real physician shortage crisis, largely because of business practice issues.  We have not done a survey, but I think there is a similar pattern developing here, where the frustrations and, actually, the financial pressures are so great that many are considering leaving their practices.  If you remember, when we came to you in 1999, several large practices in southern Nevada had actually gone bankrupt.  A number of others had to restructure because of long delays in payment or non-payment.  In California, right now, 10 percent of physician practices are in bankruptcy.  So, there is a pattern here.

 

Senator O'Connell:

It would be very interesting to know the statistics of physicians leaving because of delayed payments from insurance companies, because I happen to know of two just in the last 2 years that have left their practice.  They said, “It is not worth it any longer.  I can make more money teaching or lecturing or writing papers.”  That is a pretty frightening thing to me.

Mr. Matheis:

I also must report something very alarming to the committee.  I said we have had a number of complaints filed with the insurance commissioner, with other state agencies, as appropriate by the law.  But, a number of physicians in the last week, or so, as we were planning this presentation, indicated a great deal of concern because they felt they had been threatened with action that would be taken against them if they testified before this committee.  The threat was not simply viewed as idle because at least one physician, within the last 2 weeks, was removed from a panel, because the physician had filed a number of complaints about delayed payments.

 

Obviously, the chilling effect of anybody being afraid to testify before a legislative committee considering legislation is extremely serious.  I can say that we have some physicians, who even though they feel they may be in some peril, are testifying today.  Others, simply, could not take the risk.  I have indicated the Nevada State Medical Association would provide whatever defense was necessary in the event sanctions were taken.  It is my understanding, as long as someone is reporting to you his or her experience and telling you the truth, as they understand it, no one has the right to preclude the ability of any citizen to come before this Legislature.  It is the first time I have confronted that issue in all the years I have dealt in these kinds of issues.  But, that can be the price of the complaints that are filed, and serious practice consequences can occur.

 

In addition to the punishment issue and the contract issue, a number of people felt there was a need to bring workers’ compensation plans under the same basic rules.  So, we have section 17 in S.B. 99, which would do that.  I think there are some technical issues Senator Townsend and Senator O'Connell have identified that probably need to be addressed on that issue.

 

We would also take on the panel-fee issue, again.  I am sorry to report to you, immediately following your last session, when you passed the law that said you could charge real administrative costs, but you cannot charge when there is no cost, just to make a profit of being listed on a panel.  That was a procedure that was, of course, enshrined in American mythology in the movie, “The Godfather.”

 

Unfortunately, right after you passed that law several complaints were filed with the insurance commissioner because at least one plan upped the price of the panel fees.  One plan claims panel fees are not really covered under existing law.  And these annual panel fees, depending on the number of physicians in a practice and the number of plans in which they are associated with, go into the tens of thousands, sometimes hundreds of thousands, of dollars.  It is a big cost to the practice where there is not, necessarily, any benefit to anyone.  We think whatever real costs are, they are already being taken out of the discounted rate the provider is being paid.  So, and as the insurance commissioner found, very few plans actually charge these panel fees.  We made it clear everybody who does this is covered and we are asking this practice be prohibited.  They should find other ways to make a profit than just listing physicians on panels.

 

Marjorie Uhalde, Ph.D., M.D., President-elect, Nevada State Medical Association:

I am here today to speak on behalf of the physicians I represent.  I am sure you know the physicians I represent are dedicated to cost-effective, excellent medicine.  I am here, primarily, to emphasize the significance of how important we think this particular bill is.  Others will testify to the details.  I am here just to emphasize medicine is now a business, and this bill is critically important to us.  We cannot provide excellent medical care if we cannot keep a business alive by being paid for what we do.

 

Marrietta Nelson, M.D., President, Nevada State Medical Association:

Larry Matheis has pretty much gone over the details of what has happened since you passed S.B. 145 of the Seventieth Session 2 years ago.  Physicians in Las Vegas and throughout the state were very happy when that bill was passed; but, unfortunately, the insurance companies pretty much disregarded it.  We are here today to bring that to your attention.  Panel fees have either not changed, or have gone up, and prompt payment has not occurred.  We really need this bill.

 

Donna K. Bybee, CMPE, Administrator, Pulmonary Medicine Associates:

I have 11 physicians, of which 8.5 are full-time employees in the practice.  You have a copy of my testimony (Exhibit F).  However, I’ll just go through it, briefly.  I find, through my professional contacts, this situation is rampant across the nation, not only in Nevada.  I support lending legislation that will help the health care community return to the business of health care.

 

I have a graph (Exhibit F) that shows you the number of outstanding charges over 45 days in our practice.  The tallest bar represents the plans with which we are contracted; the next tallest bar represents the plans with which we are not contracted, although they are payers.  The next bar is Medicaid, and the last, and shortest, bar is Medicare.  You can see even though we are contracted with a lot of plans, there are numerous charges over 45 days that are still not paid.  What I would have thought this graph would show when I ran it, was that I would have noncontracted payers higher than any other payer, but that is not the case.

 

Senator Townsend:

You are telling us Medicare is the quickest payer?

 

Ms. Bybee:

That is correct.  Medicare is my fastest payer, and about 55 percent of my patients are Medicare patients.  We bill Medicare electronically; we get reimbursed electronically within a 17-day period.

 

Senator Townsend:

You said that Medicare is on an electronic system.

 

Ms. Bybee:

Yes, we bill Medicare electronically, and they also reimburse us electronically.

 

Senator Townsend:

Is that done by any other group?

 

Ms. Bybee:

Not that I know of.  When I do my contract negotiations, I always ask about the electronic capabilities and whether I can bill electronically.  You can bill some plans electronically; some are billed through a clearinghouse, which is fine.  But none can do reimbursement.

 

Senator Townsend:

Since you are the one on the front line that deals with this every day, it would help us to understand, do you bill monthly?  Do you bill daily?  Do you bill weekly?

 

Ms. Bybee:

Daily.

 

Senator Townsend:

You do bill daily?

 

Ms. Bybee:

Actually, we bill three times a week, and we do as much electronically as possible.  We deal with Medicare.  There are two plans we directly bill electronically:  Medicare and Hometown Health Plan.  Hometown Health Plan does not reimburse electronically, however, but we do electronically bill straight to them.  We also deal with two clearinghouses.  There is a local clearinghouse in California, and a national clearinghouse we deal with because they don’t do the local plans.  The local ones do the local plans, and the national ones do all the national plans.

 

This was a surprise to me, only because I knew Medicare was my best payer at this point, but I thought the contracted plans would pay a lot faster because I have a contract with them.  And, that is not the case as you can see by the graph (Exhibit F).  The other thing I wanted to mention was in my office I have two data entry positions, two Insurance follow-up positions . . . (Donna Bybee presented written testimony, Testimony Before Legislature Regarding Prompt Payment [Exhibit F].)

 

My testimony is in support of this bill, but I would like to see it go even a step further.  I would like to see the bill revert to billed charges after 45 days, because that is usually about a 25 percent increase in what they pay.  There is wording in the bill that says something about “substantially and routinely” and those words are very vague.  They need to be defined.  There are words in there like “approved claims,” but neither the payers nor the providers agree on what an approved claim is.  So, the wording in this bill does need to be substantially worked on.  I am in support of the bill as it stands, if the wording cannot be adjusted.  In conclusion, if I could redirect the resources, the time, the effort my staff puts in on collecting from insurance plans, I could do a lot more in helping people, medically, rather than being the collection agency.

 

John M. Nowins, M.D., OBGYN, Sunrise Medical Surgery Specialists:

I am here today to talk about your doctor, my doctor and all doctors getting paid.  Your doctor is available 24 hours a day, 7 days a week, 365 days a year, and he is there to save your life.  This is what we do.  We are there to take care of you, whatever it takes, and we are asking to be paid.

 

The insurance companies pick your hospital, the doctor you can consult, the medications you can use, where your patient can be tested, which tests your patient can have, and then they have your staff sit on hold for hours trying to prior-authorize tests, medications, consults, or radiology tests.  Insurance companies have our staff sitting on hold for hours.  The average waiting time, when dealing with Sierra Health Care to pre-authorize, is 45 minutes.  After those 45 minutes, sometimes you just get “appropriately” disconnected.  What are you asking for?  You are trying to take care of the patient.  And you get disconnected and have to call back.  We have to try to get back to Sierra Health Care, or whichever insurance company it is, and try to get this pre-authorized.

 

We have to get our pregnant patients prior-authorized.  Our patients are pregnant and we have to get the delivery prior-authorized.  Now, if we do not get that prior-authorization number before delivery, whether it is a normal vaginal delivery or C-section, even though we have taken care of the patient for 9 months, we do not get paid, at all.  We can take care of pregnant patients for 9 months, do their postpartum care, deliver twins, deliver triplets, and take care of high-risk complications.  We are out there saving your wife and your child’s life, and we cannot get paid.  Then, once we get it prior-authorized, there is no guarantee of payment.  We still may not get paid at all, because that prior-authorization does not mean you are going to get paid.

 

Dr. Nowins:

The other night, I was watching a TV show about interns and medical students at Johns Hopkins University.  Some of you probably saw it on TV.  These are some of the top medical students in the world who are going to become doctors.  They are going to put in approximately 12 years of training to become a doctor.  They are going to be available 24 hours a day, 365 days of the year.

 

Let us say these great doctors come to Nevada to practice medicine.  One of the things they are most worried about is managed care and the hassles they are going to go through to try and deal with the managed-care system, like all of us have done over the last 10 to 20 years.  If I were there at that medical school and they asked me to get up in front of them and talk, I would say, “You have no idea what you are going to go through.  The hardest thing you are going to do is trying to get paid.”

 

All physicians and medical office billers, et cetera, have got pages of examples where it takes us, not days, not weeks, not even months to get paid; sometimes it takes a year to get paid.  Your plumber gets paid, your electrician gets paid, and your mortgage gets paid.  The insurance company pays their phone bill, everybody pays their rent on time, and they pay their insurance premiums on time, which go up every year while our reimbursements go down every year.  But what happens to your doctor?  Your doctor, who was there at 3 o’clock in the morning saving your life, did not get paid.  Your doctor is lucky if he or she gets paid after months have gone by.

 

One thing I wanted to bring up is this fee for getting on a provider list.  You have got to pay approximately $100 per doctor to be on a provider list, some fees are $300.  We have something like 2000 doctors here.  So, $100 times 2000 is $200,000 going to the insurance company to have a secretary put your name on a provider list.  This is per insurance company.  Now, sometimes, they forget to put your name on the provider list.  You have paid the $100 or $200 or $300 or $400 so that their secretary can remember to put your name on the provider list.  But then you look at the provider list and your name is not there.

 

Dr. Nowins:

You call them and ask, “Where is my name?”  The answer you receive is, “Well, doctor, do not worry, I am sure it will get printed next year, because our provider list comes out once a year.”  You hang up the phone saying, “What a wonderful system!” This goes on year, after year, after year, and I have been here 11 years.

 

You probably ask why I would bring in my painter’s bill.  I had one of the rooms in my house painted, and the painter was talking to me about being a doctor and he said, “You know, before I get to the next room and get the rest of your house painted, I have to be paid.”  I said, “Well, you know, there are some rules here.  First of all, I do not care what kind of paint you want to use, I am going to tell you what kind of paint you are going to use.  Secondly, you cannot have the helpers that you normally use.  I am going to tell you what helpers you can use.  I am going to tell you what ladder to use.  I am going to tell you what to do.  And, by the way, the next thing I am going to do is cut your bill in half.  Then I am going to take 3 to 6 months to pay you.  And, if you are lucky, maybe I will get to it in 3, 4, or 5 months and we will see if you can get paid.  Of course, the painter looks at me and goes, “What are you talking about?”  And I said I thought you wanted to be a doctor.  I wanted you to know how it feels to be a doctor for a few minutes.

 

I think I have made my point pretty clearly.  I do have examples and I will mention a couple.  They are in regards to Nevada Health Solutions, no names, but I delivered a baby on July 6, 2000.  I took care of the baby’s mother for 9 months prior to delivery.  I do not remember what hour of the day or night I took care of this patient.  I delivered the baby and as of, today, I have not been paid.  Now, the reason I have not been paid is because the patient failed to fill out a “Mom’s Questionnaire.”  This is Nevada Health Solutions, and everybody here will have an example of Nevada Health Solutions.  They will talk to you about hundreds of thousands of dollars that are owed that are not paid for similar reasons like this.

 

This Mom’s Questionnaire is something the patient fills it out.  She writes in her name, states she is pregnant, and writes in her address and her social security number, all of which I already have, all of which Nevada Health Solutions already has.  This is redundant nonsense.  But, guess what?  The doctor cannot get paid until the patient has filled out this Mom’s Questionnaire.  So, I called them and said, “You are joking, right?”  And, they said, “No.”  So, guess what?  I cannot find the patient.  I called her mother at her work to try to get her to get her daughter to fill out the Mom’s Questionnaire.

 

Dr. Nowins:

I called Larry Matheis and I said, “Larry, what can I do to get this Mom’s Questionnaire filled out?”  He said, “God, I cannot believe they are holding up your payment over this.”  I called up Mr. Duarte (Charles Duarte), Director of Medicaid, and I said, “I need to know what to do about this Mom’s Questionnaire.”  He said, “Let me look into this; I think you should have gotten paid.”  So, I said, “I would think I would get paid, but, you know, we are out here and it is almost 6 months.”  Low and behold, about a month ago this patient came in.  She needed birth control pills.  I gave her birth control pills and told her I needed a favor.  I asked her to fill out this Mom’s Questionnaire so I could get paid.  She filled out the Mom’s Questionnaire and we faxed it to Nevada Health Solutions.  We still have not gotten paid.

 

There is another patient who I did gynecological surgery on, on February 1, 2000.  I am emphasizing the date, February 1, 2000; today is February 27, 2001.  This patient was prior-authorized, and I have the prior-authorization number.  We have followed up on this claim for over a year.

Dr. Nowins:

I am going to switch to ESEA (Education Support Employees Association).  ESEA has printed up things and distributed them to us on how they are 6 months behind in paying.  Some physicians have claims almost 1 year old.  They (ESEA) have admitted to us that they are way behind and cannot pay.  We are still seeing their patients and saving lives, and we are not getting paid.  I have a whole list of ESEA claims that are not paid.

 

Let us go to CCEA (Clark County Education Association).  They are teachers.  We want to take care of our teachers.  Teachers, doctors and nurses are very important people in society.  All people are important.  Here are CCEA cases that are 4, 5, and 6 months old not getting paid.  We are taking care of our teachers.  We are delivering our teachers’ babies.  We are doing heart surgery and brain surgery and doing tests and taking care of our teachers.  We are not getting paid.  And, when they come in they say, “Well, doctor, thank you very much for taking care of my daughter and my wife and my mother.”  I think this is absolutely criminal that your doctor cannot get paid.

 

You all are going to have doctors here in Nevada.  Someday, someplace, sometime, you will need a doctor.  We are representing your doctor, and we are saying, “Your doctor deserves to get paid.  He or she should not have to wait 6 months to get paid.”

 

Robert J. Comeau, M.D., OBGYN Society:

Today I would like to talk about my personal experiences with some of the HMO Medicaid plans.  I would like to talk to you about HMO Medicaid and prenatal care, but Mr. Larry Matheis has told me to limit myself to the prompt payment in regards to the HMO Medicaid issue.  I would like to talk about one case, in particular, and I would like to show you how one contract we were forced to sign to take care of Medicaid patients really undermines prompt payment.

 

First of all, back on January 7, 1999, I performed a Caesarian section on a patient.  We had a placental problem with a massive hemorrhage.  We almost lost the patient to exsanguinations, but now, she is basically well.  I submit the claim promptly, within two weeks.  My billing officer checked the claim and found they had no record of a claimant at Nevada Health Solutions.  They told us they had a computer run that was bad and lost a whole month of claims.  So, my billing clerk faithfully sent that claim in again.  We then checked it out, again.  And again, Nevada Health Solutions had no record or this claim.

Dr. Comeau:

I then became kind of upset about this.  I took the claim in my hand, walked down to Nevada Health Solutions, talked to the head claims manager, and handed the claim to her telling her that this is what happened, and please process the claim for me.  She said, “No problem; we will take care of it.”  She took the claim and smiled.  I went out of there and said, “Man, this is pretty easy.”  Our billing office, later on, received a notification that our claim was “stale-dated.”  That means our submission date had expired, and we were unable to get paid for that claim.

 

My billing agent made a tremendous number of calls to everybody in Nevada Health Solutions.  I then called Mr. Keith Beagle, the President of Nevada Health Solutions and said, “Look, this is what has happened.”  And he says, “Fine.  I am going to take care of it.”  Well, time passed and nothing happened.  I then talked to Mr. Beagle, again, and I said, “Look, I have been waiting now for quite awhile to get paid for this claim.”  He kept on telling me that we are going to take care of it.  I then said, “Mr. Beagle, I am not a lawyer or anything similar, but is not this state and federal monies of Medicaid?  And, if I do not get paid, where does that money go?”  Do you have to refund that money back to the federal government and the state government?  I gave services, but my fee is not paid.  The claim was finally paid in November of 2000, roughly 10 months later, with no interest.

 

I may add that Sunrise Hospital was paid within 45 to 60 days for the same claim.  They had no problem getting the claim paid, but I had a problem.  I then reviewed this and said, “This happens to be the most difficult Caesarian section I have done in my life.”  Not the fact the patient almost bled to death; that was the easy part.  She did well.  The hardest part was the incredible amount of time I spent trying to get paid for services rendered.  I am not asking for special favors.  No doctor is.  We are just asking to be treated fairly; that is all I am asking for.  I do not have any hidden agendas.  I do not represent any HMO that wants to come in and take over the Medicaid contract.  I am, basically, here for the patient and the doctor.

 

Many obstetricians have had similar experiences.  People in the Clark County OBGYN Society did a fax network survey.  In this survey, approximately 40 physicians answered various questions concerning prompt payment.  I will read a couple of questions.

 

Dr. Comeau:

In your opinion, have your claims been unfairly stale-dated, sending notifications that the HMO Medicaid system payment submission date has expired?  The total number of physicians responding to this question was 43.  Ninety-eight percent of the physicians said they had problems with getting paid due to having claims declared stale-dated.  Of the three HMOs on the survey, Smart Choices had 50 percent of its claims being unfairly stale-dated, Nevada Health Solutions, 88 percent, and United, 29 percent.

 

Have you encountered difficulty with lost claims and submitting claims to an HMO Medicaid system as compared to other insurance companies using the U.S. mail services?  Forty-one physicians answered this question; 90 percent had problems mailing the claims into these three HMOs.  The problem with Nevada Health Solutions occurred at a rate of 92 percent, Smart Choices, 38 percent, and United, 27 percent.

 

Does your office use extraordinary methods to submit claims to the HMO Medicaid system, for example, certified mail with return receipt, fax verification, or personally going to the claims department?  Forty-two physicians answered this question out of the Clark County OBGYN Society.  Seventy-six percent said they had problems.  Of them, Nevada Health Solutions rated 91 percent as having problems in this matter; Smart Choice was 41 percent, and United was 31 percent.

 

In your opinion, does the HMO Medicaid system, this is Smart Choice, Nevada Health Solutions and United, delay payment for your medical services?  Forty-two physicians answered.  Ninety-eight percent said, “Yes.”  Of those, Nevada Health Solutions rated a 93 percent difficulty factor; Smart Choice, 59 percent; and United, 34 percent.

 

After the C-section previously mentioned, I said, “You know, this is terrible.  They had my money for over 10 months.”  I thought about it carefully.  And I said, “This is not my money, this is our money.  We are taxpayers.”  These are federal funds being used in this manner.  Most physicians are loyal citizens.  Most physicians are faithful taxpayers.  Most physicians are faithful voters.  I became concerned about that, so I then wrote a letter to the Nevada commission on insurance, Ms. Molasky-Arman (Alice A. Molasky-Arman, Commissioner of Insurance, Insurance Division, Department of Business and Industry).

Dr. Comeau:

The Nevada commission on insurance investigated my claims, and, surprisingly to me, they found that my claims are considerably in compliance.  However they basically looked at my claims, when the system received the claims, and when they paid, within the appropriate amount of time.  But, they did not look to the fact that my claim was submitted two, three, four, and five times, in some cases hand-delivered and signed, and then the system still lost the claim.

 

So, the fax survey addressed this problem.  The survey asked 43 OBGYNs how many weeks does it take you to submit a claim to all insurance companies, including putting a stamp on it and mailing it?  Ninety-three percent of the respondents said in 2 weeks they have a claim sent out.  So, if you really want to look at prompt payment, you have to look at the date of service and go 2 weeks and draw the line and say that is when the HMO system should have received it.  If they didn’t receive it, there is something wrong with their system.

 

Then the Nevada Insurance Commission sent me a final letter dated April 2000 stating the Medicaid system does not fall under the jurisdiction of the Nevada Division of Insurance.  That means they cannot do anything for me.

 

We all became aware of certain tactics being used by various HMO Medicaids to delay claims.  The first tactic is a lost claim; the claim just gets lost.  We mail it in; it gets lost.  I am under the impression if you have put a stamp on something and put it in the U.S. mail postage service, you have to assume it gets there.  The second tactic is the authorization requirement.  First of all, you need authorization for delivering a patient.  You need to have a hospital.  You need to have prenatal care.  You need to get authorization for ultrasound, for labs, and for something so obvious as delivering a baby.

 

If a patient goes to the wrong hospital, one out of the Medicaid plan area, you do not get paid.  This was brought up with Mr. Duarte (Charles Duarte, Director, Medicaid) in the last meeting with the OBGYNs in Las Vegas.  The hospital representative said, “We get paid.”  But, apparently, the doctor does not get paid if the patient goes by mistake to another hospital not on the patient’s plan.  The other tactic is a 60-day stale-date claim, relying on trying to get the claim in within 60 days, if not you do not get paid.  Another tactic is relying on the patient to submit information such as the Mom’s Questionnaire, which can be used against the doctor.

Dr. Comeau:

Well, when this was all happening, Mr. Keith Beagle and Mr. Todd Meek, who were the Executive Directors of the Nevada Health Solutions, came to my office.  My billing clerk and I stated we only wanted to be treated fairly.  We stated we have never asked for anything special.  They informed me I am a non-contracted provider, that is, I have not signed their contract, but I am still taking care of their patients.  They said, “You do not have to take care of the patients, because you are not contracted.”  I said, “I am unable to sign the contract with you because it is so unfair, because it is based on the 60-day stale-date clause, but I still want to take care of the Medicaid patients.  I think those patients need expert care and access to physicians.”

 

On April 13, 2000, I wrote a letter to Governor Kenney Guinn describing the problem.  I received no response.  I then wrote to U.S. Senator Harry Reid, U.S. Congresswoman Shelley Berkley, and U.S. Senator Richard Bryan.  U.S. Senator Harry Reid and U.S. Congresswoman Shelly Berkley opened the doors for me on the federal side.

 

U.S. Senator Bryan wrote a nice three-page letter to me stating I should work through the local and the state agencies.  I should contact the Governor, and I should send information to local/state representatives.  Well, I have done that several times with the Governor, and about 2 weeks ago, I sent 75 letters out to every State Assemblyman and every State Senator.  I also sent this letter and the faxed survey to our Nevada Congressional representatives enumerating the problems.

 

In May of 2000, I felt there were still some definite problems.  I looked around and found certain groups of doctors were owed $400,000.  At one time, I was owed $40,000.  The emergency room doctors at UMC wrote off $300,000 to $400,000 from HMO Medicaid.  I wrote the Attorney General, Ms. Frankie-Sue Del Papa, and received a response after 2 months stating, “Unfortunately, this office is unable to address your concerns.”  So, I kept on going.  I kept writing letters, kept trying to fight for the doctor and the patient.  These delay tactics and nonpayment of claims have impacted doctors and the Baby-Your-Baby program.

 

Senator Townsend:

Doctor, I have to slow you down because you have not been able to take a breath.  We got the point.  That is why the bill is here, and I appreciate the backup documentation, but I want to get to the heart of the changes we need to make to accommodate your problem.  So, Alice (Molasky-Arman), I would like you and the division (Insurance Division) personnel to come up now.  Then, we will get back to the testimony, and then we are going to have the opponents testify, because we need to get to the specifics of how we get this bill processed and get out of here.  Alice, how much weight to the hammer do you need to solve the problem we are facing?

 

Alice A. Molasky-Arman, Commissioner of Insurance, Insurance Division, Department of Business and Industry:

I could not help but notice some of the problems stated are not within the jurisdiction of the office of the commissioner.  There were references to Nevada Health Solutions, Medicaid, ESEA, the teachers’ plan (CCEA), and Smart Choice.  None of those organizations are under the jurisdiction of the commissioner; they are not insurers.  The commissioner’s advisory committee on health care and insurance established a task force last year to review these problems.  We brought together members of the provider community, the medical management community, and insurers, and, of course, the division of insurance to try to work toward greater understanding of the billing process and how to get paid and who is being paid.  We have gained some ground in that area, with advanced understanding.  Unfortunately, I do not think those messages have been conveyed to the entire community, and they need to be.

 

Senator Townsend:

Tell us who you do not have jurisdiction over.  We know one is Medicare, and they are being demonstrated as being one of the better payers.

 

Ms. Molasky-Arman:

We have no jurisdiction over the ERISA [Employment Retirement Income Security Act] plans, which I am assuming the teachers’ organization is under.  Another one is the ESEA.  Those are, principally, the ones.

 

Senator Townsend:

What does ESEA (Education Support Employees Association) stand for?

 

Guy A. Perkins, Jr., Chief Insurance Examiner, Supervisor, Division of Insurance, Life and Health Bureau, Department of Business and Industry:

I believe that is one of the trusts established in Las Vegas as a political subdivision.

Senator Townsend:

So, the teachers, the culinary, and Medicare plans you have jurisdiction over.  What about your jurisdiction over Medicaid?

 

Ms. Molasky-Arman:

No, there is no jurisdiction over Medicaid.

 

Senator Townsend:

Can we give it to you?

 

Ms. Molasky-Arman:

I do not believe you can because it is federal.

 

Senator Townsend:

How about if you do not pay, and you are not working there anymore?  How about that?  That is jurisdiction.  They are a line-item budget, in other words, performance standards.  The state can set those.

 

Ms. Molasky-Arman:

Yes.

 

Senator Townsend:

If you do not pay on time, you get to go to the back of the line at the Department of Motor Vehicles and Public Safety (DMV/PS).  You have to think creatively.  Start thinking way out there.  These people need to get paid.

 

Ms. Molasky-Arman:

I realize they need assistance, and they need help in areas we have not been able to provide.  There was also reference to what we believe are independent practices, or physician organizations or associations, which are private networks.  They are not insurers or private panels.  We do not have jurisdiction over those entities, either.

 

Senator Townsend:

I think Dr. Comeau [Robert J. Comeau] made an excellent presentation on the ways around not accepting a claim requiring submission after submission after submission.  You hand-deliver it, you register it through the U.S. mail, and you fax it.  What jurisdiction do you have over that, if it is an insurer you have jurisdiction over?”

Ms. Molasky-Arman:

If it is an insurer, certainly, yes, we do have jurisdiction.  We have set up new procedures through which we are looking at all of the inquiries, or complaints, and they are processed through our consumer officers.  Sometimes we will have one of our technical staff, Mr. Perkins (Guy Perkins) or one of his staff members review them, if they are complicated.  If we perceive a violation, the first task is to get the provider paid.  Then, if we discern there has been a violation, we refer it to our enforcement section to take disciplinary action.

 

Senator Townsend:

How about a phone call from you?

 

Ms. Molasky-Arman:

That would help.

 

Senator Townsend:

Take 30 minutes a day, and you call the guys that are not paying.  If I got a call from the insurance commissioner that said, “I am looking at you and you need to pay, because here is this claim we have reviewed and it is due and payable.”  Would that not get their attention?  We have to quit looking at things.  We have to start acting on things.  This is the point I am trying to make.

 

Ms. Molasky-Arman:

We are attempting to do that.  Our market conduct examiners have been instructed that is a specific area they must review.  I must say, when the bill was enacted, S.B. 145 (S.B. 145 of the Seventieth Session), last session, we were inundated with boxes of materials from various practices.  They were not sorted; they came in carton boxes, just copies of bills with the expectation that the insurance commissioner’s office would reconcile those bills.  And, unfortunately, we do not have the staff to perform that function.  We had to go back to the person who filed and asked them to provide us with summaries.

 

Senator O'Connell:

Alice, do you have any records of the people that you do have control over and the complaints against those individual plans?

 

Ms. Molasky-Arman:

Yes, we do.

 

Senator O'Connell:

Could you share that information with us in numbers, not necessarily names, but numbers of complaints that you have had in the past 2 years?

 

Guy A. Perkins, Jr., Chief Insurance Examiner, Supervisor, Division of Insurance, Life and Health Bureau, Department of Business and Industry:

For the last couple of months, we have been putting together what we call a “Picture of Health Insurance in Nevada” (Exhibit G.), which includes information about the task force the commissioner mentioned earlier, and also has a complete breakdown of complaints.  We hope to have that, possibly tomorrow, for distribution.  (Mr. Perkins presented Exhibit G subsequent to the meeting; no direct reference was made during the meeting to specific information within the publication.)

 

Senator Townsend:

The way the bill is drafted it would not include contracts that are currently in existence, and I do not want that to happen.  And, I do not believe any member of this committee does.  Alice (Molasky-Arman), if we give you the authority to review an accepted claim, and if it is not paid within a certain time frame, on the first complaint a 30-day suspension is issued on the second complaint a 60‑day or 6-month suspension, and on the third complaint you yank their ticket.  Are you tough enough to do that?

 

Ms. Molasky-Arman:

Yes, we are obligated to follow the laws as they are established.

 

Senator Townsend:

That is all I want to hear.  It is just sometimes we do not follow the law as vigorously as some of us would like.

 

Senator Carlton:

Alice, do you have any purview over the third-party administrators (TPA)?

 

Ms. Molasky-Arman:

Yes, we do.  We license them and they are subject to similar laws as far as the processing of claims payments.  What we do not have authority over is all the ERISA plans that contract with third-party administrators (TPA).  For example, in the instance where the plan did not fund the payment of claims for the TPA, it would be very difficult for us to interfere in that process because of ERISA.

Senator Carlton:

If we get away from the dollar amount, if we are talking about the third-party administrator and the paper shuffle that is performed, do you have power over that?

 

Ms. Molasky-Arman:

Yes.

 

Senator Carlton:

Mr. Chairman, when the doctor (Dr. John M. Nowins) down south mentioned culinary earlier, I have experienced this with our particular TPA, where I have filled out five to six different forms and it took 8 months for the doctor who treated my daughter to be paid.  I would also like to see, as you so aptly put it, a bigger hammer for the third-party administrators who play paper shuffle and take advantage of the people who are part of the plan.  I would like to see help for not only the doctors, but the patients and the patients’ families from third party administrator’s attempts to delay payment using tactics such as stale claims, not clean claims, not understanding what digit is part of the social security number, all the little things that can be taken care of with no problems.

 

Elsa Ozuna Richards, Administrative Director, Reno Diagnostic Center:

Specifically, what I ask, if we are looking for specific language, my concern is over how many times a claim has to be submitted.  For the past 2½ years, we have submitted certified mail for all of our claims to our payers, and for 2½ years we have had to resubmit our claims up to four, five, and six times.  I cannot understand why certified mail is not received.  If a physician provides service in good faith, then obviously, he should be reimbursed.  My specific concern is page 3, lines 17 through 28, regarding “specific reasons.”

 

If you have a payer to whom you have submitted claims, then is “I cannot find your claim, or your claim was not been received” a specific reason?  Those are the “specific reasons” we are given by payers.  The language tends to open the gates for how many types of reasons can be utilized.  What I ask is some type of specific language, or a limit established on how many times a payer can use a specific reason.

 

Senator Townsend:

Did I hear you say, for 2½ years you have submitted all your claims to payers by certified mail?

Elsa Ozuna Richards:

Absolutely, and recently we heard a talk by MGMA (Medical Group Management Association).  We have been seeking payment for several claims from payers.  We have also been submitting our claims or a letter, after chronic non-payment, to the insurance commissioner for action on those delinquent non-payers.  Recently, I have actually been getting reimbursed, after several months, but the payment comes back with the notation, “payment in protest.”  I am not quite sure what they are protesting, but, ultimately, after a few months, I have been reimbursed.

 

Senator Townsend:

Let me understand this.  I believe you stated this, and if I did not hear you correctly, please correct me.  For 2½ years you filed claims with the payer through certified mail?

 

Elsa Ozuna Richards:

Absolutely.

 

Senator Townsend:

And, some of them are telling you they did not receive them?

 

Elsa Ozuna Richards:

Absolutely.

 

Senator Townsend:

How can you do that?

 

Elsa Ozuna Richards:

That is what we are questioning, and that is what we are protesting and the reason for the emotional appeal.

 

Senator Townsend:

That is like preapproval in the first testimony we had where the lady is lying there and screaming she is having a baby and you need preapproval.  How much more proof do you need?  I am missing something here.  Can you provide us with all of those claims that were submitted by certified mail where they asked you to submit it a second time, or they said they did not receive them?

Elsa Ozuna Richards:

The claims would be so numerous over the 2 years.  I could give you the claims for this week that were denied and received by certified mail.

 

Senator Townsend:

No.  I do not want the ones that are denied.  I want the ones they say they did not get, or did not receive.  Those are the ones I am interested in.

 

Elsa Ozuna Richards:

Oh, absolutely.  We can submit names of claims.  If you send a simple manila envelope full of claims, and you send it certified mail, I can promise you are going to be told a good percentage of those claims within that manila envelope have not been received.  Unless you categorize and list every claim in the bundle, so that you have a record of each one and the date it was submitted, it is hard to prove the claims they say were not received were in the bundle.  It would probably take one FTE (full-time employee) just to log all of the claims that go in each manila envelope.  Our practice bills 100,000 claims per year.

 

Donna Bybee testified she has to increase her staff.  In just over the last year‑and-a-half, my collecting staff has increased by three people.  I have two PPO (Preferred Provider Organization) collectors, specifically collecting for PPO claims.  In the last year, I had to hire true collectors.  I actually hired someone who worked for a collection agency, because I thought their experience would be much more beneficial to our company.  And, she was, because she did not give any regard to the medical aspect; she actually just wanted to collect on the money due.

 

It is unfortunate when medical practices have to resort to those tactics in order to receive reimbursement.  What is most unfortunate in all of this is the single physician and the two-man groups that are not able to hire someone like myself, or Donna Bybee, who have graduate degrees in business or administration and understand the processes.  Even after years of experience, I am still amazed by what goes on, and I am constantly learning.  It is unfortunate these gentlemen cannot secure experienced help.  And, that is why you have physicians like this testifying and who are extremely emotional over the subject matter.

 

LuAnn Tucker, Nevada Physical Therapy Association:

I do not have anything new to add.  We just wanted to speak in support of the bill, and will give written testimony and not take any more time (Exhibit H).

Bryan Gresh, Lobbyist, Nevada State Psychological Association:

The Nevada State Psychological Association represents 250 licensed psychologists practicing in the state of Nevada.  To put it into perspective, of the 36 or so bills we are currently keeping an eye on, this is probably in the top two or three bills we are watching for this session.  And, Senator, we do support, wholeheartedly, S.B. 99.

 

I think that Mr. Matheis (Lawrence P. Matheis) earlier mentioned a 45- or 48‑day period for some of the outer reaches in terms of folks getting paid.  I do not know if there is any discrimination against psychologists, but it does seem there is, perhaps, a quicker payment for broken arms than broken spirits or broken hearts.  The president of the association, Dr. Gary Lenkeit, with your permission, Mr. Chairman, will comment briefly from Las Vegas.  One year would be nice.  He is looking at some cases where it is 2 years, or more, before payment has come in.

 

Larry Lenkeit, Ph.D., President, Nevada State Psychological Association (NSPA):

I am here to represent NSPA’s support of S.B. 99 and to thank you, Senator O'Connell, for introducing this important bill.  Without this bill, insurance companies and HMOs can, and will, delay payments of claims as long as possible, as we have heard from many people already this morning.

 

Yesterday, I was paid on two claims from one insurance company.  The dates of service were March 1999.  I guess they are trying to clear up things from the last century.  This payment was delayed almost 2 years, in spite of the fact the services were clinically approved while the patients were in the hospital, and in spite of the fact the clinical and medical directors of this HMO had approved the payment.  Practitioners have no recourse when claims are pended, other than to continually resubmit their claims.  This, of course, leads to higher business costs as we repeat the same process over and over in order to get paid for our services.  This particular HMO has pended every claim I have ever submitted to them, generally paying years later.

 

They even went as far as pending a claim for over 1 year, in spite of the fact my services were preapproved by their clinical director prior to my initiation of these services.  NSPA urges this committee to support S.B. 99 so insurance companies have to pay their bills in a timely manner, just as the rest of us are required to do.

Linda G. Gutierrez, Concerned Citizen:

I have my son as a patient of Dr. Lenkeit, so I am going to back up his statement.  My son was authorized to see Dr. Lenkeit through United Health Care.  I had eight sessions approved.  My son went to four of them; 2 years later they still had not paid.  I paid the claims myself.

 

Dave England, Chairman, Nevada Coalition of Health Care Providers:

We are also in support of S.B. 99.  We feel organizations with semi-monopolistic authority need someone to have that authority regulated by checks and balances.  It appears patients have the protection from the providers by a regulatory board.  The patients also have protection from the insurance industry by the insurance commission.  Yet, those of us who provide service do not seem to have any protection from anyone.  They just seem to come in and regulate our environment.  In spite of that, with all the problems going on, you still see practitioners and providers still providing care.

 

So, I think this supports the fact they (health care providers) are more committed to providing care than just their compensation, but they do need that compensation.  We would encourage the committee to give the insurance commission whatever authority it needs to see that a check and balance does occur so we, as providers, also as consumers, can still have equal protection and equal authority with those that have authority over us.  Who is it that one would go to if these programs were regulated by ERISA?  Who regulates ERISA that you could go to see if you could leverage payment from them, as well?

 

Senator Townsend:

Senator Carlton made an excellent point.  The ERISA plans, of course, are federally authorized, and I do not know exactly who their regulatory authority would be, if anybody.  But, if anyone in an ERISA plan is using a TPA (third party administrator), we would have jurisdiction over them.  So, we will make sure that is included in the debate, and ultimately in the bill.

 

Fred L. Hillerby, Lobbyist, Hometown Health Plan:

We have some concerns with the way the bill is worded.  We can talk about that.  I am assuming you are planning to do some work on this bill, and we will participate in that.  We have data, too.  I would just like to formally request an opportunity to look at the data that was handed out by the medical association (Exhibit E) just so we can compare notes.  Our numbers for Hometown Health
Plan are substantially different than this.  I would be curious why, and be willing to work on that data so we can understand what the issues are.

 

I think the commissioner (Alice A. Molasky-Arman) was the first to mention it, and it could not help but go unnoticed.  I realize it is a frustration.  We have dealt with this when we have talked with you about mandated benefits and issues.  There is a significant portion of the population out there with benefits, but over which this Legislature has no control.  That is unfortunate and frustrating.  But, as you listen to a lot of the testimony, particularly from Las Vegas and you talk about Medicaid, the culinary union, the teachers union, and so on, and that is something that, unfortunately, we cannot get our arms around, or you cannot as legislators.  We cannot help you with that because it is out of the jurisdiction of the state.

 

We will work with a subcommittee, or however the chairman plans to deal with this bill, to deal with some of the specifics.  I will not go into a lot of detail because you have heard a lot of testimony already.  I just would like to say the health plan I represent is concerned about prompt payment.  It is doing a lot to improve that, not only internally to make sure our systems work, but working with our providers to be sure they understand how to bill and when there are problems on their end.

 

You have heard testimony today about having to repeatedly rebill.  Sometimes that is a routine process.  And, every time you get a bill, you have to go through it.  If you are getting billed a week later for the same bill you got last week, that just delays things.  So, there are a host of issues out there we have to deal with and, just on behalf of my client, we are happy to work with the chairman and this committee and the proponents of this bill to see if there are some ways to deal with this issue that will have meaningful results.

 

Senator O'Connell:

Fred (Fred L. Hillerby), I think it would be helpful to us, as the subcommittee is formed, if we had a report from the provider you represent on the information you feel is not correct when you receive it.  And, also a report on the rebilling or the stale claims you have so that perhaps we can, when we are working with Larry (Mr. Matheis), see the problems at which you are looking.  Then we can address the problems to which the providers are also looking, and maybe we can see some kind of a match there in the language we need to put in this law.

 

Mr. Hillerby:

We are happy to do that.  Mr. Smith, a member of the task force the commissioner identified a minute ago, has been working with the insurance division and trying to address this.  We do have information we will share with you regarding how long it takes from the time service is provided until we receive the claim, and how long it then takes us to make disposition of that claim.  We can have our claims people talk about the issues of duplicate billing and that sort of thing, so that can help you understand the issues out there.

 

Jack Kim, Lobbyist, Sierra Health Services, Health Plan of Nevada:

I will just echo the same comments as Mr. Hillerby (Fred L. Hillerby).  Some of the comments made were informative, but if you listen to what they are complaining about and whom they are complaining about, you are talking about entities that are not governed by the insurance law to a large extent.  I did not hear of anyone governed by the insurance law, so my concern is in enacting legislation that it is not going to get to the problem you are trying to get to.  I was going to pass something out at a later time, but I will go ahead and pass it out now (Exhibit I).  AAHP, American Association of Health Plans, had put together data on some of the issues Senator O'Connell had asked about regarding information the health plans get that are incorrect.  And, it lists some of those issues.

 

Senator Townsend:

Before you leave, Mr. Kim (Jack Kim), do you have a statistic on inappropriately filed claims, because I know your company is one that keeps a vast amount of statistics because of your size.  Do you have a percentage of claims with your contractor providers that are inappropriately filed, meaning they left the social security number off, or whatever things that would throw the claim out of the system and not be accepted as a valid claim?

 

Mr. Kim:

We do have some statistics, but let me double-check those before I provide them to you.  I will provide them to you at the subcommittee or working group, whatever way you want to proceed.

 

Senator Townsend:

You might want to double-check to find out if any of these certified mail claims that somebody in your organization signed for and then said they did not get went to you.

Mr. Kim:

I think they are talking about a northern Nevada organization.  I do not think we contract with a lot of them, but we will double-check.

 

Senator O'Connell:

Mr. Kim, do you have any kind of a requirement that calls for a Mother’s Questionnaire?

 

Mr. Kim:

That is Medicaid, and I do not know much about Medicaid.

 

Helen A. Foley, Lobbyist, Pacific Care/Secure Horizons:

We echo the concerns and sentiments of the other HMOs.  One issue I would like to discuss with you, though, that has not been brought up, even in the report provided you by Mr. Matheis (Lawrence P. Matheis), is nowhere does it discuss how long it takes for a provider of health care to submit a claim.  We recently did a study of almost 100,000 claims, and it took an average of 28.6 days for providers to even submit a claim.  So, of course, an awful lot of time can go by.  From what I understand from the other plans, and we can give you some more precise information, it is anywhere from about 22 to 28 days before a claim is even submitted for payment.  That certainly extends out that time period.

 

I have an editorial (Exhibit J) about the troubled union trust in southern Nevada that was in the Las Vegas Review Journal on January 10, 2001.  It says, “So, while private insurance companies must deal with the state law requiring them to review and pay a medical claim within 60 days, the support workers trust is under no such obligation, and it is, apparently, under no obligation to follow other typical operating procedures.  They talk about a backlog of 12,000 cases, and over 75,000 employees covered have horror stories about having to pay when the insurance companies simply did not, and could not.  It is a very difficult situation, and when you cannot get your arms around it because you have no authority, it is quite difficult.  Maybe, with the TPA situation, there is something that can be done.  I know that TPAs are a pass-through and it is not the ultimate organization, but at least they may be able to apply some pressure.  We will be happy to work with the subcommittee when it is formed.

 

Senator Townsend:

Is there someone here who is an expert on ERISA plans?  We are not looking for a definitive legal opinion here, just the things we (the Senate) could write a letter on with the Assembly and the signature of the Governor to our Congressional delegation to say, “This is what we are facing.  Here is what we heard in testimony.  This is what we are doing because this is our jurisdiction, but this is what you need to do.”  That is all I am looking for.

 

Mr. Hillerby:

The U.S. Department of Labor has primary jurisdiction over the ERISA plans.  There was federal legislation passed a couple of years ago that did a number of things with HIPAA (Health Insurance Portability and Accountability Act).  Particularly, there were some requirements placed on not only insurance companies, but also the self-funded plans, the ERISA plans and the Taft-Hartley (Taft-Hartley Labor Act of 1947).  The U.S. Department of Labor has quite a bit of jurisdiction, and they are in the process of promulgating some new regulations regarding timely payment.  I have some information that may be able to guide you, but the U.S. Department of Labor is the agency with primary jurisdiction.  But, remember, its primary focus is the employees, not the providers or anybody else, because ERISA is the employee retirement issue, and it boils over into the health plans, as well.  I will get you some of the information we have, but they are the federal agency of primary jurisdiction on these issues.

 

Senator O'Connell:

Fred (Fred L. Hillerby), let me ask a really dumb question.  Are these people all hired by the federal government?  If so, when they are operating, locally, is there a federal office here that hires these people?  Where do we have the budget?  Because I think if we need to really get serious about this, we need to start locally, at the local office, and find out who is in charge of the employees with whom we are running into problems.  Whose responsibility is it for hiring the people paying these claims or processing the claims?

 

Mr. Hillerby:

You are asking who the third-party administrators are who are paying the claims for these ERISA plans.  Was that your question?

 

Senator O'Connell:

I am trying to follow the line of progression here.  My first question is if we have a local ERISA office.  Do you know?

 

Mr. Hillerby:

Not to my knowledge.  I believe it is the regional office, but, again, I have only dealt with people out of the San Francisco region.

 

Senator O'Connel:

So the San Francisco region hires a third party provider here?

 

Mr. Hillerby:

No, they are a regulatory agency that has responsibility to ensure all these retirement programs and health programs comply with the federal law.  They do not have anything to do with hiring the people involved.

 

Senator O'Connell:

So, we have no local representation with these people as far as the state is concerned?

 

Mr. Hillerby:

I do not know of any U.S. Department of Labor people that are in the state of Nevada.  That does not mean they are not here, Senator.  I would be happy to see if I can help find an answer to that, but my experience has been with the regional office in San Francisco.

 

Senator O'Connell:

It does not seem to make any sense that you deal directly with the San Francisco regional office.  They do not hire anybody locally that addresses any of these issues.  Are they all in San Francisco?

 

Senator Carlton:

I have not met anyone.  For the questions I have had, I have always gone through the San Francisco office.

 

Senator Townsend:

Who is the TPA for the plan, do you know?

 

Senator Carlton:

I am sorry; I do not know the name of the third party administrator.

 

Senator O'Connell:

We have to be able to step backward to find out who the key person is for the Nevada area so we can get a hold of and get their attention.

 

Senator Carlton:

As far as our plan is concerned, Senator O'Connell, and I called to get some answers on this to make sure that I spoke correctly, we hire the administrator and set out the guidelines.  But, there are times where that person does not perform to the standards we set out.

 

Senator O'Connell:

But, when you say “we” you are talking about the culinary?

 

Senator Carlton:

The health and welfare trust fund.  Yes, Senator.

 

Senator O'Connell:

And you hire somebody locally?

 

Senator Carlton:

Yes.  Well, I am not sure if they are local or regional or national.  They just have a branch here.  I am not that familiar with our administrator.  I have been trying to learn about it this past week.

 

Senator O'Connell:

Well, it would seem like that would be a good place for us to start with each of these agencies to find out who it is that is hired, and where they are located, and then for us to get to that person.

 

Mr. Hillerby:

The question is getting clearer in my mind, and, yes, there are third party administrators that are local.  And, as Senator O'Connell said, there are some that are regional.  But, yes, you can begin to get a hold of some of those.  It still becomes a jurisdictional issue, although they are licensed by the state of Nevada.  There is also federal jurisdiction over their practices because it is an ERISA plan.  But, you can begin to identify some of this.

 

Senator O'Connell:

You said the key word; they are licensed by the state of Nevada.

Mr. Hillerby:

The TPA is licensed by the state of Nevada, or they should be; they are required to be.  It is under chapter 683A of NRS.

 

Senator Townsend:

Is that your understanding, Alice [Alice A. Molasky-Arman]?  Can you condition those licenses on certain things that we set up statutorily?

 

Ms. Molasky-Arman:

We cannot impose any restrictions on the third party administrators that would not be imposed under the ERISA plans themselves.  We are completely preempted by ERISA.

 

Senator Townsend:

But you still license them?

 

Ms. Molasky-Arman:

We still license the third party administrators.  Yes, we do.

 

Senator Townsend:

Well, if we cannot impose any guidelines, then what is the point of the license? I’m missing something here.

 

Ms. Molasky-Arman:

We can impose standards of performance, and I think that is what Senator Carlton was referring to as far as processing, reviewing claims, preparing the explanation of benefits.  But, as far as the payments are concerned the third party administrator is reliant on the funding by the plan itself.  And it is that plan over which we have no jurisdiction.  The U.S. Department of Labor does have a regional office in San Francisco and is the office that we frequently meet with and talk to about some kinds of problems where we are able to resolve, with their cooperation, various kinds of matters.

 

Senator O'Connell:

Alice (Alice A. Molasky-Arman), can we request the appearance of one of these people from the San Francisco office to come here?

 

Ms. Molasky-Arman:

Certainly, I see no reason why not.

Senator O'Connell:

I would like to request we do just that and, let us see if we cannot get somebody’s attention.

 

Ms. Molasky-Arman:

I can get the names of the persons with whom we work at the present time.

 

Senator Townsend:

That would be important, as soon as we can get them here.  If you need a letter from us, but if you could call them, since you work with them, would that be OK?

 

Ms. Molasky-Arman:

I would be happy to.

 

Senator Townsend:

Great.

 

Janice C. Pine, Lobbyist, Saint Mary’s Health Network:

We, also, will be happy to work in the subcommittee on this bill.  One of the other items, which is not addressed in this bill and in which my organization is particularly cognizant, is the catastrophic problems that do arise.  Our community as a whole went through a flood.  My particular organization went through a total crash of a computer system, and then we had a fire.  In this bill there is nothing that would provide for the insurance commissioner being able to intercede in these penalties and in this process and make allowances for those particular incidents.

 

We immediately contacted, to the best of our ability, every one of our physicians and providers.  We contacted the insurance commissioner’s office.  We had great cooperation from our providers, and they seemed to be sympathetic with our plight, and they worked very well with us.  If we needed additional information, they were willing to work with us on that.  So, if this bill is going to be processed, there needs to be something in there which gives the commissioner the ability to work with a plan that may be having particular catastrophes.

 

Keith Beagle, President, Nevada Care Incorporated:

I have been president of Nevada Care (Nevada Care Incorporated) for the past 7 years.  I am serving my second term as chairman of the HMO Association in Nevada.  We certainly look forward to the opportunity to work with you in the subcommittee environment.  We do not necessarily agree with everything that was spoken, but there are certainly issues that need to be addressed.

 

A couple of them I will just point out, more informational than anything else.  You mentioned certified mail.  Blue Cross Blue Shield, which is the payer for the state of Nevada Medicaid program, has discontinued accepting certified mail.  As ridiculous as it may sound, they literally have received empty packages that are sent certified mail.  Though it may be a quantifiable way to receive mail, it does not seem to be working.

 

I was pleased to hear one of the people testifying addressed electronic claim submission.  We try to contact every provider capable of electronic submission, and insist, if at all possible, they use electronic claim submission.  Not only do they get notification the claim has been received by the payer, it obviously expedites the whole process.  So, electronic claim submission would be to everyone’s benefit.  Although, I have had experiences where providers will indicate they do not do EDI [Electronic Document Interchange], because they say they get their claims rejected when they do.  Reality is there are edits put in place and if the claim is not completely filled in, then, yes, it will be rejected.  So, it behooves both parties to use electronic claim submission.

 

And, for Ms. O’Connell (Senator Ann O'Connell), I will address the Mom’s Questionnaire.  The Mom’s Questionnaire is a form that takes down a great deal of information in trying to determine and identify high-risk mothers.  The intent of that was, not only does the managed care company use that form as a tool, but also the state of Nevada has an entire department that is set up in order to take that questionnaire and then assist that mother in order to ensure the best outcome.  The claims payment was a method used to ensure we got that form.  The state has since changed their policy and has opted not to require that, so the managed care plans are taking that same position.  Our concern, quite frankly, is, without the method, we will not have good participation in completion of that form and, therefore, have potential high-risk mothers that will go unnoticed and have outcomes that are not as favorable.

 

Robert A. Ostrovsky, Lobbyist, Employers Insurance Company of Nevada:

I would like to testify specifically about section 17 (in S.B. 99).  It covers workman’s compensation that I do not believe has been discussed, yet.

Senator Townsend:

It has been discussed; it just has not been discussed here.

 

Senator O'Connell:

We are aware of it.

 

Senator Townsend:

Are you going to talk about the technical difficulty of paying nonmedical claims, or medical benefits?

 

Mr. Ostrovsky:

Yes, on both.

 

Senator Townsend:

We are well aware of that.

 

Senator O'Connell:

There has been an amendment asked for.

 

Mr. Ostrovsky:

I have talked to the moving party on this bill and their amendment will be inadequate from our position.

 

Senator Townsend:

Why?

 

Mr. Ostrovsky:

Because it still would require payment in 30 days.

 

Senator Townsend:

So, what is wrong with that?  You are now in the private sector, as I remember.

 

Mr. Ostrovsky:

This is a claim that has three elements, not two.  The element of a claim for compensation under a health plan is among the doctor, the insurance company, and that contract that covers that individual making the claim.  If it were a covered benefit, it would be paid.  We have employers to be concerned about here.  We have employer reports that we have to receive.  In addition to which, the way this bill is drafted currently under 616C.475 (NRS 616C.475), we have 14 days to pay the claim for compensation once it is due.  Our reading of this bill would now allow us to go to 30 days.

 

Also, this bill would move the responsibility for auditing these claims and compliance from the DIR (Division of Industrial Relations, Department of Business and Industry) to the insurance commissioner.  We think that is an element that needs to be reviewed and discussed.  In addition, it eliminates the “three times” penalty, which is imposed under the statute and substitutes, instead, interest payments to the doctor.  That penalty money goes to the claimant.  There is a whole number of things we believe section 17 does which we think are unintended and would ask that section 17 be removed.  We believe, if there is an issue about the payment of workman’s compensation claims, we ought to discuss it in the context of a workman’s compensation bill and in context of what this would do to the workman’s compensation.

 

Mr. Ostrovsky:

This bill makes major changes in the way Employers Insurance Company of Nevada (EICON) handle claims and who audits those claims.  I would encourage you to take a very close look at that, because we have all kinds of time limits currently existing in the statute:  21 days for permanent and partial disability payments, for example, which is different than the 30 days.  So, if this committee wants to address that issue, I would be happy to work with the committee.  I think the way it is drafted here is totally wrong, and does not work to the benefit of the claimant, which the system is supposed to do.

 

Lastly, I will tell you I represent a lot of business clients.  I would just keep in mind, when you work with this bill, the limited number of insurers you can impact under state law.  And, remember whatever costs result as imposed with this will be passed right on to the people I represent.

 

There are some local government funds, which the state has authority over because they are “creatures” of the statute and created by the statute, not created by ERISA.  The difference between a union fund, which is a Taft-Hartley (Labor Act of 1947) fund, not an ERISA fund, and it runs under the rules of the Taft-Hartley Labor Act of 1947.  ERISA funds are self-insured.  There may be some commingling; the labor department has jurisdiction over both.

 

The rules may vary from a union’s health and welfare fund, one that is set up by local government, which is statutory, and those that are controlled strictly by the insurance commissioner, which are products purchased by small employers and individual citizens of the state.  I would be happy to work with a subcommittee.  We would urge you to remove section 17.  There are lots of other workman’s compensation bills where we can have experts concentrate on the workman’s compensation issues, if there are any, regarding payment.  We urge you to remove section 17 from this bill.

 

James L. Wadhams, Lobbyist, representing himself:

I thought it might be relevant to make a quick comment from a broader perspective on behalf of myself.  I think the administration has heard these complaints initiated through the Office of Consumer Health Assistance, in the Office of the Governor.  They managed to work out a resolution over the prior-authorization issue.  There was an aggregation of providers, as well as insurers, that worked through Laurie England [Director, Office of Consumer Health Assistance, Office of the Governor).  The insurance commissioner has tried to bring people to a common claim form.  About every 15 years we have to do this.  We did it back in the early 1980s.  We had to resolve the claim form so everybody has the same guidelines as to how to fill them out.  That process is in place.

 

I think, to a certain extent, the wide disparity in facts you are hearing is something the committee needs to take a little time for the various plans to submit their statistics.  Then you will see how wide these disparities are.  There is a communication problem.

 

In the last session, dealing with these private debts, you put a provision in there that states the court “shall,” that does not mean “may,” “shall” award costs and reasonable attorney’s fees to the prevailing party.  My law firm has taken these cases on behalf of hospitals and doctors, and we have won the principal amount in full, the interest at two points over prime, plus attorneys’ fees.  If these debts are collectable, the private sector has a mechanism to collect it.  The lady that said she had to hire two collectors and spend money to do that, she could have had a lawyer do it for free, because he will recover the fees on top of the bill.  It can be done.

 

You put the honey on the pot last session.  That is a mandatory attorney’s fee on top of principal plus interest.  If those debts are outstanding, I am just not sure why people are waiting to go to court when the attorney is going to get paid, as well as the bill.

Senator O'Connell:

You know, Jim (James L. Wadhams), you make a good point there, but I think the thing that has driven this more than anything else is that most everybody gets paid for the service they provide when they provide the service.  And, that is the heartbreaking thing this profession is facing.  I just cannot imagine how they can really survive when you are talking about the length of time some of these folks have to wait to be paid.  If I had not heard it from doctors that have quit the profession after they have spent the 12 years in their education.  To me that is just not acceptable.  To then have to go to court on a regular basis to take care of these claims, I think that is why we really need to sit down and take a very serious look at this issue.  I think we are losing very good medical providers over the fact they simply cannot afford to stay in business any longer.

 

Mr. Wadhams:

Senator O'Connell, I think that is an excellent point.  There are issues, generally, with managed care that I am not sure the content of this bill addresses, although they are part of the emotion that surrounds it.  These are matters of contract and, as I have testified in front of this committee many times on many issues, contracts should be enforced in accordance with their terms.  So, the suggestion an insurance company has a contractual obligation it is not paying, leads to the conclusion there should be sanctions imposed.  Interest and attorneys’ fees are the way to collect a debt.  But the licensing sanction is separate and apart from those who do not adhere to their contractual obligations.

 

I could not agree with you more, but there has to be some way to get down to a common set of facts and bring some sense to this, because you are hearing a wide range in reasons why this is happening and should not happen.  I think state agencies are trying to get to the common denominator, and that, perhaps, will be part of your work session, having the insurance commissioner and Laurie England (Consumer Health Assistance Director) bring their efforts to that work session.  There is a way to get groups to communicate.  Going to court is great for me, but it is not the efficient way.  People should honor their contracts as they stand.

 

Donald Jayne, Lobbyist, Nevada Self-Insured Association (NSIA) #200:

In many ways, Mr. Chairman, I will go with a “me too.”  We recognize in section 17, which is a section we are focusing on for worker’s compensation, there have already been some technical issues identified by the chairman and the vice chairman.  We look forward to working with you on whatever venue it takes to resolve some of those discrepancies.

 

John W. Brouwers, M.D., Anesthesiology Consultants Incorporated:

Anesthesiology Consultants Incorporated has a lot of experience with a lot of the different payers, some of which are Medicaid, some of which are the trust funds, but an awful lot of which are just the regular insurers.  I would like to address a couple of the folks that have already spoken to you; I guess you could say on the other side.  One of those was a representative for Hometown Health Plan, and they are actually one of the better folks, relatively, versus some of the other insurers.  They take an average of 59.2 days to pay what they consider a clean claim after we submit it to them.  That is not after we do the service; that is after we submit the claim to them.  And, our group takes anywhere between 7 to 10 days to submit a claim after we do the procedure.

 

Pacific Care was another one that testified for you folks.  They have improved recently; I will tell you why.  They were taking up to 140 days to pay their bills to us.  They had what they call a TPA/IPA (third party administrator/ independent party administrator) that was their representative that took the risk for their patients.  Their excuse was, “Well, it is not our fault.  We are not the ones that are not paying; they are the ones that accept the fees from the patients that are paying their bills for insurances.”

 

I think they are the ones ultimately responsible.  And, the reason why they have made a big improvement is over a 3-month period, our group was constantly hounding the insurance commissioner trying to get her office to go after these folks and tell them, “Look, you have just got to pay your bills.”  It took 3 months to get it done, but finally, they have come up with a program that, all of a sudden, the money is there.  Pacific Care happens to be an entity that has just reported some of the highest profits reportable for health care.  So, they seem to have the money.  It is just whether or not they want to pay us.  Another person who spoke to you was a representative from Sierra Health.  Their average payment time from them for us is 70.3 days.

 

Now, it so happens Smart Choice, which I understand is the Office of Health Policy, U.S. Department of Human Resources, and Medicaid entity, takes 103 days to pay.  It is interesting the Medicaid parts of these different insurers, which I understand is not necessarily covered by this bill, typically takes 30 to 40 days more to pay than the insurers do, because the insurers have this little bit of possibility that maybe the insurance commissioner will call me up and tell me I am in trouble.  Whereas, it seems Medicaid HMOs typically do not do that.

 

Somebody asked about workman’s compensation.  We do an awful lot of workmen’s compensation work.  They take, on average, after a clean claim is submitted, 65 days to pay our practice.  Something that is a unique problem for anesthesia is often times we are told our claim cannot be processed until the surgeon or the obstetrician, has submitted his/her claim.  If we are good at submitting our claims and they are not, why should we be penalized for that?  The money that is kept in these insurance company coffers can make an awful lot of interest for them.  I have a whole list of people here.  I think it would probably take a quarter of a single page to show the number of payers that pay within a reasonable time.  I would say a reasonable time is 45 days.  And it was, literally, a quarter of a page of those payers.

 

Dr. Brouwers:

I would like to associate myself with the comments of the very first person [Donna K. Bybee] from up north who said she thought a better way of approaching this was from a penalty standpoint.  If it is adjudicated that a particular bill should have been paid on time and it was not because the insurance carrier wanted to keep that money in their pocket rather than pay it to the person who did the work, then the full charges should be reimbursed, not a percentage or not a percent penalty.

 

First of all, it is difficult from our standpoint to compute what that penalty would be.  I am sure the insurance carrier would tell you, “Oh by the way, you know, it was really submitted four days after what you claim it was.” or, “We did not receive it for two weeks because it got lost in the mail.”  They will come up with any excuse they possibly can.  Computing interest on that basis makes it difficult, onerous, and more expensive for us to do.

 

To the attorney who just spoke, James L. Wadhams, you bet, it would be to the attorney’s advantage to be able to take all these things to court.  It is not to our advantage because we have to have a representative, whether it is our office people or our physician, who speaks to the attorney who may or may not take this case.  It is an onerous thing to do.  All we really want to do is get paid.

 

I would especially like to associate myself with the comments made by Senator Townsend who said there are an awful lot of people getting out of the state prisons, whether on parole or by escape, and we could utilize those people to go after different claims and different insurance carriers that are a little remiss in paying us on time.  They have a very collegial relationship with those folks, because I think they are one and the same in a lot of respects.

 

Jim LaBorde, Administrator, Digestive Health Center:

One point of clarification, going back to the graph that Donna Bybee showed earlier in the first presentation, and to your amazement, Senator Townsend, that Medicare was the quickest payer.  Maybe one of the reasons for that is HIPAA has put guidelines on all insurance companies who serve as fiscal intermediaries in various states to process Medicare claims.  Number one, they must be capable of accepting electronic claims submissions.  If a claim is filed electronically, it must be paid within 14 days, and if it is not filed electronically and it is filed by paper, then it must be paid within 28 days of receipt of that claim.  I think that is a standard that this committee should kind of keep at heart.  If it works for the federal government with Medicare, then why can it not work on a local level?

 

Peggy Charles, Representing Dr. David F. Charles’ Physician’s Office:

Dr. Charles is a pediatrician in Las Vegas, in practice for 22 years.  I work in the office.  We have several issues.  For one thing, it is the PPO (preferred provider organization) fees; they are getting excessive.  We are a small office.  I think we pay over $1200 a year, total, with all the PPO fees we have to pay.

 

The other issue is the insurance late and delayed payments.  I have several here.  This is what I brought with me.  These are all late payments, most of them.  The one problem we have at Sierra Health and Life is they constantly down-code our level of services.  Since we care mostly for pediatric patients, we would, as an example, have a little baby having a breathing treatment in which case takes us about an hour to stabilize the child.  We bill Sierra Health Plan for a higher level of the visit.  They will down-code it without telling us why they have down-coded the visit.  They just down-code the visit and pay at the lower level of service, and we think that is very unfair.

 

The other issue is with Nevada Care Incorporated.  They are constantly stale-dating our claims.  We have hand-delivered our claims since 1998.  I have here files of all hand-delivered claims.  In spite of this, they will stale-date our claims because they say they never received the claim.  I also have a letter from one of the Nevada Care Incorporated employees.  This happened in 1999, but I am bringing it up now.  They had a disgruntled employee who threw all the claims in the trash.  They eventually paid those claims, but with great difficulty.  We had to personally go down there to get our claims paid.  I am constantly refaxing them some of those hand-delivered claims.  I have here a fax that was sent to them on January 25, 2001.  They say they never received these claims I have in my packet here.  Those were some of the hand-delivered claims that I had them sign for.  In spite of that, they say they never received it.

 

Ms. Charles:

The other issue, Larry Matheis mentioned a physician whose contract was terminated.  Well, that physician was Dr. Charles.  It was Nevada Care Incorporated.  I called over there because I was very concerned about some of our outstanding claims.  I spoke with someone at the billing offices at Nevada Care Incorporated, and they informed me they would now charge us a fee for research.  I was very upset and concerned about this issue, and I asked, “Is there some new law or some new program that I am not aware of that you can just charge provider fees at any time you want?”  I then asked, “Have you informed all the providers that this is your new policy?”

 

They explained to me, “No, we will just tell the providers as they call in.”  So, I said, “OK.“  Then I contacted some of the other physicians by phone and by fax, and one week later some of our patients, and I do not know to this day how many patients have received that letter, were informed the contract with Dr. Charles has been terminated.  So, when I found out, I called Nevada Care Incorporated, again, and spoke to a supervisor at provider relations.  She told me we did not appreciate what you did and, therefore, your contract has been terminated.

 

I said, “Where is the letter of termination?”  And they said, “You will be receiving the letter.”  To this day, we have not received the letter.  We have not received a list of the patients they sent this termination letter to, to know how many patients have been diverted from our practice.  Some patients did call, but we do not know how many patients did not call.

 

This is unfair.  This would be very time-consuming for us to look into this matter; we have tried.  We have no recourse but to take legal action, which is going to be very costly and time-consuming for a one-physician office.  These are some of the practices physicians must face now by some of the insurance companies.

Ms. Charles:

Doctor Charles has been here for 22 years.  We came at a time when this place, Las Vegas, was a very small town.  He provided a lot of free service to the UMC (University Medical Center) patients who had no insurance.  For many years, he was on call because there were very few pediatricians and a lot of them did not take call at UMC.  He did that as a free service to the community.  After 22 years, for Nevada Care Incorporated to come in and treat us this way, I think this is not fair.  We are providers and they should give us the same respect they expect.

 

They should have contacted us directly, instead of just sending our patients letters and confusing them.  Patients do not understand these policies with insurance companies, and they think that something is wrong with the physician, and that is why the contract was terminated with the physician.  I think I would need somebody to look into this before I have to take legal action.  We are very hesitant to do this, but we need some kind of an answer as soon as possible.  According to this letter, the contract was terminated January 31, 2001, but we still continue to see the patients.  We hope we can resolve this matter.

 

Mr. Matheis:

I think the issues we are putting forward in the bill are to essentially make clear the guidelines under which we would expect the implementation activities the insurance division’s task force is working on with the consumer health assistance office.  But, it is not a substitute for having clear expectations in the statute with clear punishment.  The representatives of plans that spoke indicated they are complying with the law.  So, obviously, they need not worry about stiffer penalties, because they are not going to be penalized.  They are not breaking the rules.

 

The reason the ten plans were listed on the survey form was because they all clearly came under the authority of S.B. 145 (of the Seventieth Session).  The results from the physicians who responded to the survey indicated their experience was that all of the plans were out of compliance at some point during the first 6 months after the S.B. 145 was passed.  We hope to do a follow-up survey of the second year, again focusing on a 6-month experience.  Then we plan to do another survey, with the assistance of the American Medical Association.  Given a year’s worth of data, we would hope to find that everybody would be in compliance.

But, we do think there is a salutary effect to having the law very clear about the punishment for those in noncompliance.  Let us hope it is none of the plans that spoke today, unable or unwilling to comply, that there are some teeth in law.  It is true the issue of the ERISA plans and Medicaid, and the jurisdictional issues, complicates these matters.  Nevada moved from having a Medicaid program that was administered by the state to one that is contracted to private, licensed health maintenance organizations.  And, the behaviors that have been discussed by these state-regulated entities are something needing to be looked at in terms of their commercial-line practices where we see the same kinds of numbers.

 

I think it is because behavior tends to be the same when you are doing the same sorts of things under whatever program.  Medicaid is a state/federal program; the state does have authority to force a reasonable compliance on these kinds of issues in that area.  Yet, it is not in this bill; it is not in this particular approach, but it can be done and probably should be done.  ERISA is a different animal.  But the law last time, in fact, at the recommendation of the insurance commissioner, was changed it to make sure the third party administrators were covered, because a number of them actually do the claims processing part, and they may need to be sanctioned.

 

Mr. Matheis:

As we did our survey, even though we were looking for only those who were under the law, we did get reports about the other plans.  We found, at least what was reported to us, the least compliant health insurer in Nevada are the CCEA and ESEA, the two teachers trusts.  They took, this was for the first 6 months of the plan, about 140 days, on average, to pay claims.  And, anecdotally, that apparently has not changed a whole lot.  I certainly hope there is a regulator on this that, eventually, physicians and other providers will not be able to accept patients covered by those trusts or plans that do not pay.

 

The people who are going to be hurt are those who have been paying the bills, or paying for the service as part of their coverage and expect to get services upon demand.  Then to find out their insurer, their plan, or their trust has not been acting as a good corporate citizen.  So, that is what we are trying to do here.  And I am sure that none of the plans would seek, through a subcommittee or through an amendment process, to delay or see that there would not be a bill that makes it very clear what the expectations of this state are.  When health professionals provide services, there should be no disagreement about a service being necessary, being provided and providers are paid in a reasonable way, not extorted into providing a free loan to large corporations that choose simply not to pay their bills.  So, that is our concern.

 

Senator Townsend:

Senator O'Connell, since this is your bill, we will leave it in your hands to develop an amendment the way you see fit.  Then you can bring it back to the full committee.  One of the reasons we have been so interested in this, I will not bore you with the transcripts of our hearings in 1999 (during the Seventieth Session), but I want to quote from one transcript.  This was addressed to one of the provider groups, dated February 19, 1999, from this committee, “So, give that some thought and we will try to move on because the one thing that none of us on this committee want to do is end this session and go back and have more complaints about this problem in the interim.”

 

That is why I am less than thrilled about what has been going on.  We have given everybody an opportunity to work on this.  It has not proved to be a successful effort, so we will be as draconian as the sponsor would like.

 

There being no further business, the meeting was adjourned at 10:38 a.m.

 

 

RESPECTFULLY SUBMITTED:

 

 

 

Gayle Nadeau,

Committee Secretary

 

 

APPROVED BY:

 

 

 

                       

Senator Randolph J. Townsend, Chairman

 

 

DATE: