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During its’ recent annual meeting, the NCOIL has adopted a Rental Network Contract Arrangements Model Act. The model—approved in time to be considered in 2009 legislative sessions—balances desired access to preferred provider organization (PPO) networks with transparency of physician reimbursement. It allows unlimited “downstream” rentals of PPO contracts and physician discounts, while ensuring that network access information is available to providers.
The model—unanimously adopted by the NCOIL Executive Committee—among other things, establishes clear criteria for network and discount access, and contract termination; sets out contracting entity rights and responsibilities; requires disclosure to providers and contracting entities of third party access; provides for registration of unlicensed contracting entities; prohibits and penalizes under a state’s unfair trade practices act unauthorized access to provider network contracts; and allows physicians to refuse a network discount without a contractual basis. Under the model, the initial contracting entity is required to maintain a list of every health plan and PPO with access, including any downstream rentals by other plans and PPOs. Through this list, a provider can determine up front if someone has legitimately accessed that network and its discount rate.
After much debate, it was determined that the model’s scope would extend to affiliates and subsidiaries of contracting entities in order to ensure optimal transparency. The model does not speak to self-funded employer sponsored plans under the Employee Retirement Income Security Act of 1974 (ERISA), but includes a drafting note acknowledging that individual states will determine whether the model’s provisions should apply to ERISA entities. Ohio, Colorado, Connecticut, Indiana and Florida adopted laws to regulate the rental network and several other states are considering legislation in this area. To view the news release and the model report to go http://www.ncoil.org/
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