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Breaking Down the New Telehealth Law

Breaking Down the New Telehealth Law

Questions and answers to the new Telehealth Law that was sponsored by Sen. Dan Roberts and carried by Rep. Paul Lee in the House – ACT 2022 – 302.

What is its purpose?

The stated legislative intent of the law is to expand access to healthcare through the use of electronic devices and technology. It provides regulation for physician use of telehealth, and also repeals laws providing for a special license for out-of-state physicians to practice through telehealth in Alabama. The new Act requires a full and active Alabama medical license to provide telehealth services to Alabama patients. It does retain the exception for irregular or infrequent telehealth medical services (less than 10 days in 1 year or less than 10 patients in one year)

Does the law also govern telemedicine, and is there a difference in telehealth and telemedicine?

The law defines both telehealth and telemedicine. Telehealth is more of an umbrella term, encompassing the use of electronic and telecommunication technology to support medical care. Telemedicine is defined as the provision of medical services by a physician to a patient when they are not at the same site, using electronic technology. Because telehealth encompasses telemedicine, the two may be used interchangeably, but for purposes of the Act, telemedicine is specific to an electronic communication or encounter between physician and patient.

Does the new law provide a different duty of care?

The law provides that physicians providing telehealth medical services owe the same duty of care to patients as they would providing care in an in-person visit. A physician must establish a diagnosis, disclose that diagnosis and provide a visit summary after providing care by telehealth medical services if he or she would be required to provide those things after an in-person visit. The location of care provided by telehealth medical services is designated as the site where the patient is within the state.

Must a physician establish a relationship with a patient in-person before providing telehealth medical services?

A physician does not have to establish a physician-patient relationship in person prior to providing telehealth medical services, but a physician cannot solicit patients by or for telehealth medical services. Either the patient must initiate the relationship or the patient must be referred by a physician with whom he or she already has an established relationship. A physician is also required to obtain consent from a patient to use telehealth medical services, including the specific mode of communication to be used, prior to the provision of those services. That consent must be documented in the patient’s record. Also prior to delivering telehealth services, a physician must verify the patient’s identity, the patient’s location by city and state, and his or her own credentials to the patient.

Is there a limit on the number of times a patient can be seen by telehealth?

The law does not limit the number of telehealth visits for patients. However, if a physician or someone in his or her practice group has seen the same patient for the same condition using telehealth more than four times in one year without resolution of the problem, then the physician must see the patient in-person or refer the patient to another physician for an in-person visit within one year. The in-person visit requirement can be satisfied using telehealth services as long as there is at least one licensed physician or licensed nurse with the patient at the patient’s site to provide assistance if needed.

Are there any exceptions to the in-person visit requirement after four telehealth encounters?

The in-person visit requirement after four telehealth encounters does not apply if the physician providing the telehealth services is in active consultation with a physician providing in-person care. It further does not apply to the provision of mental health services as defined under Alabama law. The Board of Medical Examiners has the authority to provide further exemptions by Rule.

Is prescribing through telehealth allowed?

A prescriber may prescribe legend drugs, medical supplies or controlled substances through telehealth, if he or she is authorized by law to prescribe them otherwise, as long as there is an established legitimate medical purpose. For prescribing controlled substances by telehealth, a prescriber must also have seen the patient in-person once in the 12-months prior, have established the legitimate medical purpose in the 12-months prior, and have used “real time” technology for the telehealth encounter with the patient when issuing the prescription. The law contains an exemption to these requirements if the prescriber is prescribing a controlled substance to treat a medical emergency, to be defined by the Board of Medical Examiners.

How does this law affect non-physicians who provide telehealth medical services?

This law does not prohibit non-physician health professionals from providing telehealth services as long as those services fall within their particular scope of practice.

Does the law require anything about records or documentation?

Any physician providing telehealth medical services must keep accurate records in accordance with the Rules of the Board of Medical Examiners and Medical Licensure Commission. Physicians must also be able to access those records and provide the Board of Medical Examiners and Medical Licensure Commission access to them upon request. The law further requires physicians providing telehealth medical services to take reasonable cautions to protect the privacy of communications with patients in accordance with state and federal laws, including HIPAA.

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American Rescue Plan Offers $940 Million for Medicaid Expansion and Other Benefits for Healthcare

American Rescue Plan Offers $940 Million for Medicaid Expansion and Other Benefits for Healthcare

The American Rescue Plan Act of 2021, signed by President Biden on Thursday, includes a number of key provisions that strengthen both public and private health insurance coverage. Among its Medicaid and the Children’s Health Insurance Program (CHIP) provisions, the American Rescue Plan encourages states to finally take up the Medicaid expansion by offering even more favorable financial incentives than those already in place and allows states to provide longer postpartum health coverage for new mothers.

Right now, some 300,000 Alabamians living in the health coverage gap. They earn too much to qualify for Medicaid under the state’s stringent income limit but too little to qualify for subsidized ACA marketplace plans. If Alabama were to expand Medicaid and provide much-needed healthcare coverage for these individuals, the state would receive an estimated $940 million over two-years for doing so. 

A complete analysis of the Act and its potential impact is below. 


Additional Federal Funding to States that Newly Adopt the Medicaid Expansion

  • Newly expanding states would receive a 5-percentage-point increase in their FMAP for all non-expansion enrollees, who account for most of a state’s Medicaid enrollees and costs. The increase would begin the first day of the quarter that expansion begins and last for two years. Not only that, this increase is on top of the 6.2-percentage-point FMAP increase that all states will receive for the duration of the public health emergency under last year’s Families First Act, which will provide $86 billion in additional federal Medicaid dollars in 2020 and 2021. 
  • According to the Center for Budget and Policy Priorities (CBPP), Alabama would receive an estimated $940 million in federal funds for expanding. 

New Medicaid and CHIP Option for States to Extend Postpartum Coverage for 12 Months

  • The American Rescue Plan offers states a new “state plan” option to provide pregnancy-related Medicaid and CHIP coverage for one year after the end of pregnancy, extending coverage well beyond the current cutoff of 60 days. States can take up this option starting in the first calendar year quarter one year after enactment, which is April 1, 2022. The option, however, is temporary and will be available to states for five years unless Congress acts to extend it at a later time.
  • The Congressional Budget Office (CBO), for example, estimates that about 45 percent of women covered by Medicaid on the basis of pregnancy now become uninsured after the end of the 60-day postpartum coverage period. Alabama is no different, and this new option would directly help address our current maternal mortality statistics. 

Expansion of the State Medicaid Option for Coverage of COVID-19 Testing for the Uninsured to Include Coverage for COVID-19 Vaccines and Treatment

  • The Families First legislation included a Medicaid option for states to cover COVID-19 testing for the uninsured through the duration of the public health emergency. The federal government picks up 100 percent of the cost. The American Rescue Plan expands this fully federally-funded option to cover COVID-19 vaccines and their administration, and treatment, including prescription drugs, and treatment for conditions that complicate COVID-19 treatment.

Policies to Improve the Affordability and Access of Private Insurance Coverage

  • COBRA Coverage: Premiums for COBRA coverage for individuals who are laid off or leave their jobs because of the pandemic will be subsidized at 100% through September 30, 2021. The employer or health plan could claim a refundable tax credit against its Medicare payroll tax liability for the cost of the premiums.
  • Affordable Care Act (ACA) Marketplace Subsidies: Refundable credits for households with income between 100% to 400% of the federal poverty level (FPL). For 2021 and 2022, premiums for individuals with income at 150% of the FPL will be eliminated, while premiums for all other households will be capped at 8.5% of their income.
  • Health Insurance Marketplace: $20 million in grants to states to modernize and update health insurance marketplace systems, programs, or technology.

Public Health Provisions

  • $7.66 billion to expand the public health workforce, including grants to state, local, and territorial health departments that increase the number of contact tracers, social support specialists, community health workers, public health nurses, epidemiologists, lab personnel, disease intervention specialists and communications personnel.
  • $7.6 billion for testing and vaccinations at community health centers (CHCs).
  • $3 billion for block grant programs under the Substance Abuse and Mental Health Services Administration (SAMHSA) to provide community mental health services and prevention and treatment of substance abuse.
  • $800 million for the National Health Service Corps, as well as $100 million reserved for state student loan repayment programs, $200 million for the Nurse Corps Loan Repayment program, and $330 million for teaching health centers that operate graduate medical education.
  • $250 million for states to establish “strike teams” that could be deployed at skilled nursing facilities (SNFs) with high rates of COVID-19.

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Medical Association Convenes “Treatment Hurdles” Work Group

Medical Association Convenes “Treatment Hurdles” Work Group

Earlier this week, the Medical Association convened a work group of stakeholders to discuss hurdles and or delays that patients and their physicians face in accessing the tests, treatments and medications the treating physician believes are appropriate.

Patient advocacy groups, many of them disease-specific, joined the Association and others in discussing the hurdles patients face in accessing what their doctors have ordered or prescribed. In addition to delays or denials of care patients and their caregivers face in these situations, the administrative tasks required of physicians by insurers increase annual health spending nationwide by more than $250 billion and occupy millions of uncompensated hours of American physicians and their staff’s time.

The coalition that’s been formed to work collaboratively on these issues is gathering information from other states. If you are interested in participating in this effort, contact

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PEEHIP Transitioning to Humana Effective January 1st

PEEHIP Transitioning to Humana Effective January 1st

Medicare-eligible retirees of the Public Education Employees’ Health Insurance Plan (PEEHIP) will be moving to the Humana Group Medicare Advantage Preferred Provider Organization (PPO) plan for their healthcare coverage, effective January 1, 2020.

Humana will be hosting a series of webinars as they lead up to the PEEHIP transition on January 1st.  These will be educational seminars on doing business with Humana.  Topics will include claims filing, claims disputes, overpayment processes and Availity functions.


Nov 11, 2019 12:00 PM EST
Webinar ID: 665-901-411

Dec 11, 2019 1:00 PM EST
Webinar ID: 722-111-459

Dec 16, 2019 1:00 PM EST
Webinar ID: 823-226-851

2. Choose one of the following audio options:

When the Webinar begins, you will be connected to audio using your computer’s microphone and speakers (VoIP). A headset is recommended.

— OR —

If you prefer to use your phone, you must select “Use Telephone” after joining the webinar and call in using the numbers below.

United States: +1 (914) 614-3221
Access Code: 825-036-259
Audio PIN: Shown after joining the webinar

Questions? Contact Shawn Kent.

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Letter to Congress: Don’t Give Health Plans Too Much Power

Letter to Congress: Don’t Give Health Plans Too Much Power

The American Medical Association wrote two letters to Congress to shed light on how physicians feel about the current debate in Washington over surprise billing. We, along with 109 other state medical societies and national specialty societies, co-signed this letter to support the AMA’s efforts.

The letters advocate for independent dispute resolution (IDR), a process that would “incentivize health insurers to make a fair initial offer of payment for out-of-network care […] while also preventing bills from physicians or other providers that are outside generally acceptable ranges.”

The most pressing priority is to take the patient out of the middle of physicians and insurers trying to negotiate out-of-network bills. Congress is considering several options to bring that to fruition; however, the options include language that could give health plans too much power to determine physician payments.

The Medical Association has been advocating to ensure that HR 3630 takes the patient out of the middle of out-of-network payment disputes but doesn’t give health insurance companies complete control over what they pay out-of-network physicians.

View the Letter here.

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What are the Misconceptions of Disability Income Protection?

What are the Misconceptions of Disability Income Protection?

There are plenty of common misconceptions about disability insurance:

  • “Disability insurance pays me if I can’t work, regardless.”
  • “My group disability will take care of me.”
  • “My business partner’s DI coverage will fund our Buy-Sell agreement.”
  • “I can pay my staff out of my DI proceeds to keep the doors open.”

Pay Attention! Not All Contracts are Built the Same

Understanding the key contract features can help you avoid the very thing you are trying to insure — loss of income.

The definition of disability and the number of ways a DI policy pays a claim is most important if there comes a time when you need to use the coverage you purchased. A strong definition of disability is, “if you are unable to perform the material and substantial duties of your occupation.” That’s it. This allows you to go to work in any other occupation and you still receive your claim payments from your previous occupation you are no longer able to perform.

For example, Dr. Brown is a neurosurgeon. He’s in a skiing accident and has damage to his fingers on his left hand. Even with proper rehab, he sustains permanent nerve damage. A pure own-occupation definition allows him to continue in practice, earn a high salary and still collect on his DI policy because he can no longer operate as a surgeon.

The definition of residual/partial disability can also vary. The best contracts will consider a 20 percent loss to be residual and will pay from 20 to 80 percent losses. Anything below 20 percent loss is considered full disability.

In addition, if you go on claim for a period of time and then return, and incur an immediate reduction in income, the best contracts will pay the difference until you have regained your previous income level.

A great DI policy pays in four ways: total disability, partial disability, catastrophic disability (cannot do two of the six activities of daily living) and supplemental (six times monthly benefit lump sum for cancer, heart attack and stroke). In addition, the better contracts will pay a presumptive benefit in a lump sum, in addition to the monthly benefit for loss of limb(s), sight and hearing. A good advisor can help you navigate the key contract features.

Don’t Get Lost in the Herd

Most of you have a Group Disability plan. For many of you, it may be the only coverage you own. Don’t get lost in the convenience of these plans. Here are the obvious advantages and some of the disadvantages of a Group DI Plan:


  • Minimal cost to the employee
  • Coverage is available for all eligible employees
  • Easy to administer
  • May cover up to 60 percent of base pay


  • Only covers base pay and no incentive comp or K1
  • Benefits are taxable when employer-paid
  • Monthly caps can reduce the percentage of income replacement well below 60 percent for high-income earners
  • Two-year own occupation definition of disability
  • Benefits are reduced by SSDI and workers comp
  • Cost of the plan goes up each renewal and can be significant if there are claims in the group

The answer to a comprehensive personal disability plan is to supplement the group coverage with a quality individual plan. That way you cover all income, not just base salary. The benefits are received income tax-free, and the policy pays in four ways (discussed earlier) and includes own occupation definition to retirement age.

Benefits and premiums are both guaranteed to retirement age. Done properly, your guaranteed coverage increases overtime to keep up with inflation. Here’s a big one: the contract is guaranteed to be portable, and the discount follows you no matter where you work.

Don’t Just Take Our Word for It

Many professionals have been grateful they had income protection when facing difficult and unexpected illnesses and injuries:

[supsystic-tables id=3]

Note: This is a sampling of all physician claims. The information above is for illustrative purposes only. It is not a complete representation of circumstances surrounding the claims, a representation of all claims or a promise to pay any specific claims.

This Isn’t Working; It’s You, Not Me

Disability Buyout Coverage is all too often either ignored or misunderstood. Many of you are likely in some form of partnership or ownership relationship and have executed a Buy-Sell Agreement.

All properly written agreements include a clause for this protection. The top three events that trigger the execution of a buy-sell agreement are death, disability and divorce. Yet only 2 percent of buy-sell agreements are funded with disability buyout insurance.

Typical buy-sell language states that after 365 days of disability the sale of that partner’s interest is triggered. A Disability Buy-Out policy would pay a tax-free lump sum after the 365 days to the other owner/owners to use for the buyout of the disabled owner’s interest.

This works very much like life insurance and provides a smooth buyout of a partner that can no longer work and contribute to the practice or business. The only real difference is the waiting period to allow the disabled partner time to recover and get back to work if that is still possible.

The risk of disability is far greater than the risk of death and yet the funding for this risk is seldom put in place. And as a function of the insurance budget, this is a very reasonable cost. Again, a professional advisor can walk you through the process and coverages quite easily.

Turn the Lights Back ON! My Staff Is in There!

Individual DI policies are used to protect your income for your personal fixed expenses (family, mortgage, food, bills, etc). Business Overhead Expense is used to protect the expenses of your business if you can’t work for a specified period of time.

If your business/practice does not have other employees/physicians capable of doing your duties, and contributing to the overhead costs, you need BOE. Most practices allocate a share of those costs equally among the staff physicians based on their percentage of ownership and cost commitment.

If you are expecting your personal DI coverage to pay for these costs you could be coming up woefully short on your personal living expenses.

BOE would pay up to $50,000 a month of overhead expenses:

  • Staff salaries
  • Advertising/marketing
  • Utility bills
  • Employee benefits
  • Equipment loans
  • Insurance premiums
  • Leased equipment
  • Rent
  • Office supplies
  • Professional fees

In addition, if you are a high wage earner it is possible that domestic coverage will only be able to protect you for 50 percent loss or less. But you can also obtain additional monthly coverage through specialty programs. Again, your professional advisor can share that option with you.

Bottom line, have one of our professional advisors do a full review of your overall disability risks, and the most cost-effective ways to mitigate them.

Article contributed by Cobbs Allen. Cobbs Allen is an official partner with the Medical Association. For more information about disability insurance, contact Cobbs Allen at (800) 248-0189 or

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Analysis: Pulling Back Curtain on Hospital Prices Adds New Wrinkle in Cost Control

Analysis: Pulling Back Curtain on Hospital Prices Adds New Wrinkle in Cost Control

As President Donald Trump was fighting with Congress over the shutdown and funding for a border wall, his administration implemented a new rule that could be a game changer for health care.

Starting this month, hospitals must publicly reveal the contents of their master price lists — called “chargemasters” — online. These are the prices that most patients never notice because their insurers negotiate them down or they appear buried as line items on hospital bills. What has long been shrouded in darkness is now being thrown into the light.

For the moment, these lists won’t seem very useful to the average patient — and they have been criticized for that reason. They are often hundreds of pages long, filled with medical codes and abbreviations. Each document is an overwhelming compendium listing a rack rate for every little item a hospital dispenses and every service it performs: a blood test for anemia. The price of lying in the operating suite and recovery room (billed in 15-minute intervals). The scalpel. The drill bit. The bag of IV salt water. The Tylenol pill. No item is too small to be barcoded and charged.

But don’t dismiss the lists as useless. Think of them as raw material to be mined for billing transparency and patient rights. For years, these prices have been a tightly guarded industrial secret. When advocates have tried to wrest them free, hospitals have argued that they are proprietary information. And, hospitals claim, these rates are irrelevant, since — after insurers whittle them down — no one actually pays them.

Of course, the argument is false, and our wallets know it.

First of all, hospitals routinely go after patients without insurance or whose insurer is not in their network. When Wanda Wickizer had a brain hemorrhage in 2013, a Virginia hospital billed her $286,000 after a 20 percent “uninsured” discount on a hospital bill of $357,000 — the list price, according to chargemaster charges. Medicare would have paid less than $100,000 for her treatment.

Second, those list prices form the starting point for negotiations, allowing hospitals and insurers to take credit for beneficence when there is none.

I recently received an insurance statement for blood tests that were priced at $788.04; my insurer negotiated a “discount” of $725.35, for an agreed-upon price of $62.69 “to help save you money.” My insurer’s price was around 8 percent of the charge. Since my 10 percent copayment amounted to $6.27, my insurer happily informed me, “you saved 99 percent.”


If a supposedly $1,000 TV is “on sale” for $80, it’s not really a discount. It’s an absurd list price.

Just as airlines have been shown to exaggerate flight times so they can boast about on-time arrivals, hospitals set prices crazy high so they can tout their generous discounts (while insurers tout their negotiating prowess).

Another rationale for those prices is just plain greed. Dr. Warren Browner, the chief executive of California Pacific Medical Center, describes this as the “Saudi sheikh problem”: “You don’t really want to change your charges if you have a Saudi sheikh come in with a suitcase full of cash who’s going to pay full charges,” he said.

But in an era when American patients are expected to be good consumers and are paying more of their bills in the form of copays and deductibles, they have a right to the information on list prices. They have a right to make sure they are reasonable.

Although making chargemaster pricing public will not, by itself, reform our high-priced medical system, it is an important first step. Maybe, just maybe, a hospital will think twice before charging a $6,000 “operating room fee” for a routine colonoscopy if its competitor down the street is listing its price at $1,000. Making this information public should bring list prices more in line with what is actually paid by an insurer, a far better measure of value.

And while the lists are far from user-friendly, researchers and entrepreneurs can now create apps to make it easier for patients to match procedures to their codes and crunch the numbers. With access to list prices on your phone, you could reject the $300 sling in the emergency room and instead order one for one-tenth of the price on Amazon. You could see in advance the $399 rate your hospital charges for each allergen it applies in a skin test and avoid the $48,000 allergy test — with an $8,000 deductible.

As a next step, regulators should insist that these prices be easily accessible on hospitals’ home pages — perhaps in the place of “PAY YOUR BILL NOW” — and translated into plain English. Seema Verma, the head of the Centers for Medicare & Medicaid Services, has suggested that she may well do so.

Patients can help, too: Check out your hospital’s price list. If it’s not detailed or complete enough, demand more. For discrete items, like an MRI of the brain or a vitamin D blood test, take the trouble to scan the chargemaster for the item. Reject an overpriced procedure (even if your insurer is paying the bulk of the bill) and take your business elsewhere.

Justice Louis Brandeis famously said, “Sunlight is said to be the best of disinfectants; electric light the most efficient policeman.” But, in this case, the reform will work only if people take the trouble to look — and to act — now that the lights are turned on.

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PIPA Open Enrollment During October

PIPA Open Enrollment During October

The Physicians Insurance Plan of Alabama through Blue Cross Blue Shield is available for qualified* members of the Medical Association providing you, your family and staff with strong benefits at affordable premiums as compared to other options. The PIPA health coverage rates for 2019 will have a decrease of 4.5 percent and dental coverage has decreased by 5.3 percent.

Qualified members may sign up for insurance when full Regular Member dues are paid. Your membership dues alone could save you thousands in insurance premiums and out-of-pocket expenses. The PIPA plan does not require all participants in your office be on the same plan.

Let our dedicated staff provide you with one-on-one personal assistance with all your Blue Cross and Blue Shield of Alabama policy needs.

Open enrollment for PIPA is Oct. 1- Oct. 31 for a Jan. 1, 2019, effective date. If you are currently enrolled in PIPA, you do not have to reapply. However, if you or your employees wish to make changes to your current plan, please do so no later than Oct. 31, 2018. You will be billed for the first quarter of 2019 at the beginning of December.

New for 2019

HSA Plan Now Offered

PIPA has added a third health insurance option, which is a High Deductible Plan that can be used in conjunction with a Health Savings Account (HSA). Rates for the high-deductible plan and further information regarding how to set up an HSA account can be found at

Practices that elect to offer the HSA option will need to “opt in” to the plan by signing the HSA notice agreement on the website and returning it to Brenda Green. Practices will be responsible for the administration of the HSA for their employees as this will be a separate function from the services provided by the Medical Association. The Association will enroll individuals in the Blue Cross high-deductible plan as is currently done with the other plans, and the practice will be responsible for setting up the HSA administration.

If you are currently enrolled in PIPA and wish to continue with no changes, you are not required to take any further action (Premium invoices will be mailed the first week in December). If you or your employees wish to make changes to your current plan, please do so no later than Oct. 31, 2018 (the last day of open enrollment).

If you have any questions, please contact Brenda Green at (334) 954 2514 or toll free at (800) 239-6272. You may also e-mail her at

How to apply

  • Complete the Application for Insurance
  • Complete an Employer Participation Agreement (one per entity)
  • Complete the Cover Page indicating the type of coverage for each application (High, Basic or Dental)
  • Submit the premium amount plus a $10 application fee (per application)
  • Applications will be processed when all information is received, 2019 dues requirements are met by all physicians applying, and all monies have been paid.

Learn more on our website

Visit for full details of the plan and for links to applications and materials. For more information call Brenda Green at (800) 239-6272, e-mail her at, or visit to learn more about health insurance with the Medical Association.

*See the Eligibility Decision Tree on our website for guidance. Visit

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Four Dangerous Words Physicians Regularly Say

Four Dangerous Words Physicians Regularly Say

One trend evident in all medical practices is the shift in payment responsibility from insurance payers to the insured patients. As employers modify coverage to contain their premium costs, health care providers are treating patients who have $2,500, $5,000 and even $10,000 deductibles. Physicians who have practiced for many years have instructed their collections staff with the phrase “take what insurance pays.” This brief instruction was understandable when the patient portion of the treatment was only a co-pay of $25. The additional charge to the patient’s insurance made it acceptable to extend professional courtesy to many patients. In the era of paper charts, physicians even developed a shorthand note of “TWIP” for this common habit. In the modern era of high deductibles, this habit, if not broken, will cause serious damage to the cash flow of a practice in three ways.

Decline in Cash Flow

The most immediate impact is a decline in cash flow, and since these patient payment dollars can be seen as the last dollars of revenue, the impact on physician income will be dramatic. A practice which formerly collected $1,000,000 but loses 10 percent from failure to collect patient payments will suffer a 20-percent or more decline in physician income. If practice overhead costs 55 percent of collections, there would have been $450,000 left for salaries, fringe benefits and bonuses to the doctors. If collections decline by $100,000, for continued write off of patient payments, the doctor income drops to $350,000 — a 22-percent reduction. This is an example of how daily habits can produce bad cumulative outcomes.

Staff Discouragement

In addition to this drop in profits, the extension of professional kindness can diminish the collection enthusiasm among collections staff. Physicians are quick to instruct staff to extend special dispensation to patients who are friends or socially connected to the doctor. Collections staff members tell us that the doctor refused to let them collect from people who attend the same church as the physician, share a membership in a country club or social organization with the physician or have children who share activities with the physician’s family. When this group, which most likely has the greatest capability to pay for medical care, is excused from responsibility, the collections team is no longer as enthusiastic about collecting from the patients who have no social connection to the doctor. This additional loss of revenue is never known but can be significant.

Training Patients

Finally, affording patients the discretion to pay or not fosters an environment in which the patients are more inclined to take the medical practice for granted. In working with our medical practice clients at Warren Averett, we typically see that the patients who do not pay for their portion of care are also the ones inclined to not show up for appointments, not follow clinical directions and to treat medical staff rudely. These are the patients we recommend be terminated, when possible, in their treatment. To indiscriminately extend professional courtesy regarding patient financial responsibility is cultivating a problem which could have been staunched by simply collecting what the insurance contract stipulated to begin with.

The four words “take what insurance pays” seem benign at first but can be lethal if used unchecked.

Article contributed by Sae Evans, Maddox Casey and Jim Stroud, Members, Warren Averett Healthcare Consulting Group. Warren Averett is an official Gold Partner with the Medical Association.

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Metro Areas Increasingly Dominated by Single Insurance Companies

Metro Areas Increasingly Dominated by Single Insurance Companies

In an analysis of competition in health insurance markets across the U.S., a study conducted by the American Medical Association found that in 169 of 389 metropolitan areas (43 percent), a single health insurer had at least a 50 percent share of the market. This represents an eight percent increase in such markets over just two years. The finding comes from the newly released 2017 edition of the AMA’s Competition in Health Insurance: A Comprehensive Study of U.S. Markets, which examines market concentration in 2016.

High market concentration tends to lower competition among commercial health insurers. These markets become ripe for the exercise of health insurer market power, which harms patients by raising premiums above competitive levels.

The AMA study presents the most comprehensive data on the degree of competition in health insurance markets across the country, and is intended to help researchers, policymakers and regulators identify markets where consolidation among health insurers may cause anti-competitive harm to patients and the physicians who care for them.

“After years of largely unchallenged consolidation in the health insurance industry, a few recent attempts to consolidate have received closer scrutiny than in the past, including the proposed mergers of Anthem and Cigna, as well as Aetna and Humana,” said AMA President David O. Barbe, M.D. “Previous versions of the AMA study played a key role in efforts to block the proposed mega-mergers by helping federal and state antitrust regulators identify markets where those mergers would cause anti-competitive harm.”

The 2017 edition of AMA’s Competition in Health Insurance: A Comprehensive Study of U.S. Markets offers the largest and most complete picture of competition in health insurance markets for 389 metropolitan areas, as well as all 50 states and the District of Columbia. The study is based on 2016 data on commercial enrollment in fully and self-insured health maintenance organization (HMO), preferred provider organization (PPO), point-of-service (POS), public health exchange and consumer-driven health plans (CDHP).

In addition to assessing competition in the commercial health insurance market at large, the study also separately examines competition for the main plan types, including HMO, PPO, POS, and the exchanges.

The prospect of future consolidation in the health insurance industry should be viewed in the context of the lack of competition that already exists in most health insurance markets. According to the AMA’s latest study:

  • A significant absence of health insurer competition was found in 69 percent of metropolitan areas. These markets are rated “highly concentrated” based on federal guidelines used to assess the degree of competition in a market.
  • In 43 percent (169) of metropolitan areas, a single health insurer had at least a 50 percent share of the commercial health insurance market, compared to 40 percent (156) in 2014.
  • Anthem has a bigger geographic footprint than any other health insurance company in the United States. Anthem was the largest health insurer by market share in 82 of 389 metropolitan areas examined by the AMA. Health Care Service Corp. was second with a market share lead in 42 metropolitan areas, followed by UnitedHealth Group with a market share lead in 26 metropolitan areas.
  • The 10 states with the least competitive commercial health insurance markets were: 1. Alabama, 2. Delaware, 3. Hawaii, 4. South Carolina, 5. Louisiana, 6. Michigan, 7. Kentucky, 8. Vermont, 9. Alaska, and 10. Illinois.
  • The commercial health insurance market in 27 states became more concentrated between 2014 and 2016.
  • The 10 states that experienced the largest increase in market concentration between 2014 and 2016 were: 1. Kentucky, 2. Alaska, 3. South Carolina, 4. Mississippi, 5. South Dakota, 6.Oklahoma, 7. Vermont, 8. Arkansas, 9. Nevada and 10. New Mexico.

Competition in Health Insurance: A Comprehensive Study of U.S. Markets is free to AMA members. The study is also available to non-members. To order a copy, visit the online AMA Store, or call (800) 621-8335 and mention item number OP427117.

Editor’s Note: Credentialed members of the media can obtain a free copy of the AMA’s newest study on competition in the nation’s health insurance industry by contacting AMA Media & Editorial at: (312) 464-4430.

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