MonticelloLive

All indications are that the long-running legal battle between the state’s major health insurance companies and medical providers will continue to drag out in court, in spite of legislative approval of a law intended to clear up the matter.
The battle began in 1995 when the legislature passed a law commonly known as the Any Willing Provider Act. It required health insurance companies to accept into their networks any hospital, physician or clinic that wished to join, as long as they accepted the terms of the insurance company.
Soon after passage of the act, however, the insurance companies sued in federal court to prevent enforcement of the act. An apparent resolution of the dispute came after years of litigation in Arkansas, and after important legal precedents were set in federal appeals courts in similar lawsuits in other states.
Those precedents cleared the way for a new Arkansas law known as the Patient Protection Act of 2005, which was intended to finally provide for enforcement of the 1995 Any Willing Provider Act.
But history is repeating itself. This time the legal dispute is playing out in hearings at the state Insurance Department, although nobody will be surprised if the Insurance Commissioner’s orders are appealed to the courts.
Three small hospitals have filed a complaint with the Insurance Commissioner. They  say that health insurance companies do not reimburse them as much as they reimburse larger hospitals for the same procedures.
The small hospitals say that insurance companies reimburse them for many procedures at below the cost of the performing the procedures. They say lower reimbursements will force them to leave the insurance networks, reducing patients’ choices.
The insurance companies say that the hospitals agreed to the reimbursement rates during contract negotiations. The Patient Protection Act of 2005 requires them to accept the hospitals into their networks but it does not require any minimum payment amounts, they say. Also, they contend that larger hospitals merit higher reimbursements because they offer a wider variety of services.
The insurance companies say that some of those services, such as intensive neo-natal care, often do not generate profits and are subsidized by other units in the hospital.
The Insurance Commissioner has ruled that the relatively lower reimbursements for smaller hospitals are legal because they’re efforts to improve quality, as well as to hold down costs. The Commissioner’s order is under appeal by the small hospitals, whose attorneys argue that insurance companies should reimburse all providers according to the same methodology.
Some lawmakers are preparing for committee meetings at which they will seek information from the Insurance Department, and make their intent clear as to the reasons they approved the Patient Protection Act.
When the act was passed in 2005, legislators said they wanted to provide consumers more choices when they need a physician or a specialist. Especially in small towns and rural areas, many people make their health care choices based on the availability of insurance rather than the quality or specialty of the physicians.