New State Law to Improve Health Plan Network Contracts

October 10, 2018


A new Tennessee law will require more transparency and limit changes to reimbursement rates in contracts between health insurance companies and healthcare providers.

The new law takes effect January 1, 2019 and is the first of its kind in the U.S.

It requires health insurance companies to give a 60-day notice to a contracted healthcare provider when reimbursement rates change, if the changes are a result of a policy change at the sole discretion of the payer. It also limits fee schedule changes to once in a 12-month period, and requires a 90-day notice of those changes.

The Tennessee Medical Association began pushing for fairer business policies in 2014 after years of complaints from medical practices who felt powerless against one-sided, “take-it-or-leave-it” contracts that allowed health plans to change payments arbitrarily and without notice. TMA led grassroots efforts that persuaded lawmakers to pass the Healthcare Provider Stability Act in 2017.

This law will bring much-needed financial predictability and stability to the marketplace when it takes effect in January. It will help doctors focus on patient care without having to worry about whether the patient’s health plan will suddenly decide to deny or lower payment. We thank Sen. Bo Watson (R-Hixson) and Rep. Cameron Sexton (R-Crossville) again for their leadership on this important issue,” said Dr. Matthew L. Mancini, a Knoxville surgeon and TMA President for 2018-2019.

TMA has developed a free online resource and will soon release a short video to help its member physicians understand and comply with the new law, which will benefit all medical practices, hospitals, health systems and other healthcare providers in the state.

When doctors or other healthcare providers cannot afford to incur an unexpected change in reimbursement from a health plan they may be forced to stop providing a procedure or drop out of the network altogether. Patients suffer by having to pay higher “out-of-network” fees for the same service if they want to continue seeing their doctor, or find another doctor who is in their insurer’s network. The new law will reduce these scenarios and help protect the important patient-physician relationship.

Learn more about TMA’s legislative efforts at tnmed.org/legislative.