Had an interesting series of conversations with a client regarding the impending ‘sunset’ of the Texas voluntary workers comp provider networks.
It seems one of the network vendors is claiming the sunset is much ado about nothing; that the expiration of the Texas voluntary network statute on January 1, 2010 does not prohibit the use of network discounts outside the certified Workers’ Compensation Network mechanism.
My initial reaction was, rather embarrassingly, a profound “huh?…wha?…”
Allow me to defend my inability to respond intelligibly.
The demise of voluntary networks in the Lone Star State has been well-publicized, widely-discussed, and much lamented. All – and I mean ALL – of the large payers in Texas are darned upset about this, as it means the end of pharmacy, DME, home health, and other non-HCN provider ‘networks’ – along with the millions in savings below fee schedule resulting from those networks.
Apparently, the vendor’s argument is that, like Pennsylvania, the Texas Department of Insurance (and perhaps others with regulatory authority) will ignore the post-1-1-11 network discounts, responding to provider complaints only to decline to enforce provider contract discounts in administrative fee disputes. Sure, the payer will lose the benefit of the discounted provider payments as they will be ‘bumped up’ to fee schedule if providers contest these payments, but, according to this unnamed vendor, there will be no other adverse effect, except perhaps for interest payments on the unpaid balance.
Really? Does the vendor actually, really, believe that? And if so, who at the vendor is willing to hold the payer harmless if things don’t work out quite so neatly?
I asked a colleague of the legal persuasion for their interpretation.
Here’s my colleague’s response.
“I believe that this network’s analogy to Pennsylvania law is inapt. The relevant Pennsylvania statute, 77 P.S. § 531, has been interpreted by the Pennsylvania BWC as a provision entitling providers to receive payment at fee schedule, except under the defunct CCO model. In contrast, the Texas Department of Insurance has promulgated 28 TAC §134.201, which requires insurance carriers to pay providers according to the Medical Fee Guideline except for payment arrangements contracted under the protections of the WCN statutes and regulations. In other words, in Pennsylvania, providers can reject payments below fee schedule (except under a CCO), but in Texas, payers are required to pay at fee schedule (except under a WCN).
This distinction may be lost on some, but it really isn’t as subtle as it might seem. Subsection (b) of 28 TAC §134.201 specifically addresses intentional violations of the payment provisions by carriers and providers, and the penalty provisions are pretty ugly:
Texas Labor Code §415.021 – $25,000 per day per occurrence and
Texas Labor Code §415.023 – revocation of license.”
But, hey, s/he is just a lawyer, right? And they’re all too conservative and risk averse, right?
Maybe.
But the consequences of screwing this up are pretty no, very, no, really nasty.
If the vendor is willing to compensate the client for:
a.) the loss of their license to write insurance in Texas, and
b.) Twenty-five grand per day per occurrence;
then I say, hell, go for it!
If the vendor isn’t willing to obligate themselves thusly, then perhaps they either finally read the law, or they didn’t understand it in the first place, or their sales folk are a wee bit more, well, ‘aggressive’ than they oughta be.
Ed. note – this business never ceases to amaze me.
What does this mean for you?
There’s this thing in business called ‘the Stupid Line’. Those who cross it rarely make it back safely.
Oct
26
