Although hospitals largely have stayed out of Congress' managed-care fray, they are giving limited support to measures that could speed health plans' payments to providers.
Two leading House bills would require managed-care plans to pay virtually all of their claims within a month. They would extend to commercial plans the conditions that Medicare imposes on its HMOs, which are required to pay 90% of their correctly coded claims for simple services within 30 days.
Such measures are included in bipartisan legislation introduced earlier this summer by Reps. Charlie Norwood (R-Ga.) and John Dingell (D-Mich.), and a Republican bill released last week by Reps. Tom Coburn (R-Okla.) and John Shadegg (R-Ariz.).
The American Hospital Association and the Federation of American Health Systems back the "prompt pay" measures. They said such a requirement on health plans could resolve cash-flow struggles at many hospitals, where uncollected payments from HMOs can total millions of dollars.
"It would be a pleasant surprise for most hospitals," said Thomas Scully, the federation's president and chief executive officer. "It would be a major signal to insurers not to jack us around."
A dozen states already require timely payment, Scully said.
Insurers object to such measures, however, calling them an unprecedented interference in private markets.
In Medicare, the government can impose a claims payment standard because it is the purchaser. But it is inappropriate to impose the same standard on contractual relationships between two private-sector companies, said Kristin Bass, executive director of legislative affairs for the American Association of Health Plans.
"Is the federal government going to intervene in the relationships between oil companies and gas stations?" Bass asked.
Despite the inclusion of the prompt-pay provision, hospitals aren't supporting the Norwood-Dingell bill, however. They also oppose a provision in the legislation that would guarantee job security to healthcare professionals who reported substandard care to government authorities or private accreditation agencies (Aug. 16, p. 4, and related story this page).
Hospitals argue the provision is designed to aid union organization.
The Coburn-Shadegg bill, released last week, doesn't include such a provision, increasing the odds that the hospital industry might support the legislation.