Issues Backdrop
Healthcare costs are out of control
Health insurance premiums are rising at twice the rate of inflation. Premiums rose between 6% to 12% in 2007. Premiums have risen 87% since 2000, according to a Kaiser Family Foundation study (Source: NY TIMES April 2007). Today, 47 million Americans are uninsured. The national healthcare debate ranks second, behind only the war. With nowhere to turn, employers are asking the government to help bring the situation under control. Payors are being pushed to the breaking point. Costs are rising, coverage is shrinking, and 2 million more people each year join the ranks of the uninsured.
The PPO Predicament
Preferred Provider Organizations (PPOs) grew in popularity during the 1980s, and currently represent 163 million Americans. This health insurance model guaranteed Providers increased patient volume in exchange for deeper discounts. However health insurance ID card, which functions as a proof of contract, began to display multiple PPO logos. With multiple logos Providers could not identify which PPO was steering the patient. As a result many states and the AMA began developing and passing legislation regarding how PPO discounts could be accessed and began to impose fines to those companies that did not comply.
Costly litigation
Providers began by questioning some of the larger claim reimbursements. Soon, auditors and lawyers noticed these contractual breaches. Lawsuits followed. Recent court decisions in Delaware and Louisiana awarded Providers reimbursement at 100% of their fees retroactive a number of years. Many states have enacted legislation enforcing a single PPO Network logo on each member's card.