03/06/08 - House panel sets minimum insurance reimbursement for dialysis centers

March 6, 2008
Patrick Howington
The Courier-Journal

A House committee yesterday approved a bill to set minimum insurance reimbursements for Kentucky kidney dialysis centers that aren't in an insurer's contracted network.

The House Banking and Insurance Committee voted 15-5 in favor of House Bill 433, with four members passing. The bill now goes to the full House for consideration.

The measure was proposed by the dialysis industry because health insurers have drastically reduced the amounts paid to dialysis centers that haven't joined networks, which require acceptance of negotiated prices.

In hearings last month, dialysis companies told legislators that insurers' lower reimbursements could force some centers to close.

Insurers said they acted because some centers were receiving unusually high reimbursements by staying outside a carrier's network.

Centers that aren't in a network submit higher bills for treatment and have been paid up to twice as much as in-network centers, witnesses told legislators.

As the dispute developed last year, some patients became caught in the middle.

Insurers told patients they should no longer get treatments at a non-network center. That raised concerns that patients in rural areas with few centers could have to travel long distances for care.

The initial version of House Bill 433 contained limits on how many miles an insurer could require members to travel for in-network care. The version approved yesterday lacks that provision.

Matt Bassett, a spokesman for dialysis providers, said the provision is no longer necessary because the bill assures that insured patients can use a non-network center.

The bill would require an insurer to initially pay an out-of-network center no less than the rate it paid that center before 2007. The rate can then decline by as much as 3 percent a year, however.

Insurers and the Kentucky Chamber of Commerce oppose the bill because they say it would drive up health-care premiums for everyone. Legislative planners estimate that the measure would raise overall health-insurance premiums in the state by $2 million to $5 million, or about one-fifth of 1 percent.

The bill could help patients such as Dennis Reynolds of Louisville get out of the tug of war between insurers and dialysis companies.

Reynolds, 55, a former truck driver, has Anthem insurance. When he started dialysis last June, his doctor sent him to a clinic at 716 W. Broadway next door to the doctor's office. The center is operated by DaVita, the nation's second-largest dialysis provider.

But the center isn't in Anthem's network. Last fall DaVita notified Reynolds that Anthem planned to "unilaterally slash" the amount it pays to the center. The notice said Reynolds might have to pay more for dialysis there if Anthem cut its rates.

Reynolds appealed to Anthem, but the insurer told him last month that if he keeps using a nonnetwork center he could be responsible for paying part of DaVita's charge.

Reynolds said he has switched to a center on Poplar Level Road. It's just as close to his Germantown home, but he likes the DaVita center better because "the staff technicians are top notch."

Also, Reynolds said, he had to switch kidney doctors when he changed dialysis centers.

"I have a big complaint about that," Reynolds said of the situation.