Medical Contract Bill Signed into Law

Christina Cole

Contributor

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On Friday, Colorado became the first state to require health insurers to use a standard managed care contract while negotiating with health care providers.

Gov. Bill Ritter signed Senate Bill 79, sponsored by Sen. Steve Johnson, R-Fort Collins, which marks a fundamental shift in the state government's involvement in private medical care contracts. Supporters say it will reduce costs by creating clearer contracts and cutting down on administrative hurdles.

Similar legislation generated one of the most heated battles at the Legislature last year, with doctors squaring off against insurers. But there were no fireworks this year, even though the measure includes many of the same provisions.

Insurers and the business community still quietly oppose this year's bill, but a lot has changed in health care and in politics in the last year that makes the Colorado Medical Society (CMS) a more difficult group to battle. Doctors, angered by the consolidation of large health plans in Colorado they say created an "800-pound gorilla," have become more politically active, and their plight has garnered the sympathy of many powerful lawmakers.

Last year, Gov. Bill Owens vetoed the bill, saying it created "an unnecessary intrusion by the government into contracts between private parties." A few days after that veto, gubernatorial candidate Ritter told CMS he would have signed it.

To date, no other state has passed similar legislation and proponents and opponents are in disagreement on the financial impact this bill will have, which is the Colorado Medical Society's top priority.

Senate Bill 79 requires that insurers disclose payment terms in an easy to understand language and to notify doctors of contract changes amongst other things. Additionally, it prohibits insurers from requiring doctors to accept patients with a different type of plan without the consent of doctors.

For instance, CMS said under the current contract, a doctor that agrees to accept HMO or PPO patients can also be forced to accept patients covered by workers compensation.