The battle over any-willing-provider laws spreads nationwide

The battle over any-willing-provider laws spreads nationwide – special edition: The State of Health Care in America 1995

Paula Bruggeman

Opposition to any-willing-provider (AWP) laws is a top legislative priority for managed care health plans that characterize this legislation as a backlash to managed care’s growing influence.

“Managed care has become the dominant way of delivering health care in the private sector, within state governments, everywhere,” says Susan Laudiciha, director of state services for the Blue Cross Blue Shield Association in Washington. “Any-willing-provider laws are attempts to undermine the gains that employers and other health care buyers have made in controlling their health costs.”

To keep costs down, managed care organizations (MCOs) limit access to their networks using selection criteria to control the number, geographic distribution, and specialties of physicians needed. MCOs monitor physician expenditures carefully before they allow doctors to participate in their network. Limiting the number of physicians in the health plan means MCOs can guarantee a certain patient volume for each provider, thus removing incentives for unneeded services and increasing cost efficiencies. The net result is MCOs can offer discounts to buyers.

AWP laws, however, mandate that HMOs, PPOs, and other MCOs allow any provider able and willing to meet stated health plan criteria to participate in the network, regardless of the managed care plan’s rationale for determining its size and membership. With an influx of superfluous providers, patient volume per provider would decrease and with it any motivation for the physician or any provider to accept the MCO’s discounted rates.

The driving force behind AWP legislation is health such as specialty physicians, pharmacists, unaffiliated with health plans who see the expansion of managed care as a threat to their income. These providers believe their only course for survival is to ensure their ability to participate in these networks.

As of February, 26 states had passed some form of AWP laws, and nearly two dozen state legislatures will consider various AWP proposals this year, according to the Blue Cross Blue Shield Association. Seven states–Idaho, Indiana, Kentucky, Utah, Virginia, Washington, and Wyoming–have enacted broad AWP laws that cover most providers. In February, the Arkansas legislature enacted broad AWP legislation, currently awaiting signature by Gov. Jim Guy Tucker (D) making it the eighth state to pass a comprehensive AWP law. But the remaining 18 states have enacted limited AWP legislation covering primarily pharmacists, allied health professionals, and noninstitutional providers. These states are Alabama, Connecticut, Delware, Florida, Georgia, Illinois, Kansas, Louisiana, Massachusetts, Minnesota, Mississippi, New Hampshire, New Jersey, North Carolina, North Dakota, South Carolina, South Dakota, and Wisconsin.

Recognizing that AWP laws could hamper managed care, some groups, such as the American Hospital Association (AHA) and the National Governors Association are opposed to AWP laws. The AHA has cited the cost impact of AWP as its reason for opposing this legislation. The National Governors Association says AWP laws undermine state health reform efforts, especially in states ready to move more Medicaid patients into managed care and away from fee-for-service reimbursement systems. The governors of Colorado, Florida, and Maine last year vetoed or threatened to veto, any AWP legislation. Gov. William Weld (R) of Massachusetts vetoed AWP legislation last year, only to have his veto overridden by the state legislature under pressure from pharmacists.

Also opposed to AWP laws are some providers. Many physicians are forming their own managed care networks and view selective contracting as a means of competing with other established networks. In fact this year, many medical groups are easing up on their drive to enact AWP laws. The American Medical Association (AMA), which has refused to support AWP legislation, is promoting its Patient Protection Act (D). This legislation, or portions of it, was included in health reform bills considered in Congress last year. The PPA model legislation addressed a variety of selective contracting issues and advocated federal and state certification standards for all managed care plans. This year, the AMA is developing new language for a revised PPA proposal, according to an AMA spokesperson, and it has not been determined yet when or if such a legislative proposal would again be introduced to Congress. Jim Stacey, AMA spokesperson, said about a dozen states will consider legislation using language similar to that in the AMA’s PPA proposal.

The Blue Cross Blue Shield Association reports that 12 states, including some where PPA legislation has been introduced, already have broad AWP bills scheduled to be considered this year as well. Also, provider groups in more than a dozen states are supporting numerous freedom of choice proposals and mandatory POS requirements for managed care plans.

One other development that could shape the managed care market, according to the Blue Cross Blue Shield Association, is the effort by state medical societies and MCOs in states such as Colorado, Nebraska, and Oklahoma, to negotiate their differences outside of the legislative arena and work toward establishing voluntary procedures regarding network selection criteria and termination of health plan providers, among other issues. The goal of such undertakings is to develop legisolation that would meet the needs of physicians and the managed care networks.

COPYRIGHT 1995 A Thomson Healthcare Company

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