More transparency coming to "rental" PPO networks?

February 5, 2009

"Rental" agreements, in which new health plans use a Preferred Provider Organization network from a plan you're contracted with to discount your fees without your permission, may soon be more transparent if a ruling by the National Conference of Insurance Legislators evolves into state laws.

"Rental" agreements, in which new health plans use a Preferred Provider Organization network from a plan you're contracted with to discount your fees without your permission, may soon be more transparent if a ruling by the National Conference of Insurance Legislators evolves into state laws.

After three years of deliberations, NCOIL members unanimously agreed that health plans should not be permitted to rent their networks to other plans without notification and approval from the providers in the PPO. The ruling establishes clear criteria for network and discount access, and contract termination, according to NCOIL.

"We recognize that rental networks are an important way to expand access to health care at lower costs to consumers, but the system has to be transparent to allow providers and payers to properly manage reimbursements," says George Keiser, vice president of NCOIL. "If reimbursements cannot be managed effectively, it drives up health-care costs for everyone."

"This should increase the likelihood that states will be receptive to legislative initiatives to increase the transparency and fairness of rental network PPO activity," says Kim Fenton, president of California Healthcare Consulting Group Inc. in San Clemente, California.

Most important, doctors can choose to decline the network discount to the renter if it doesn't have a direct contract with the practice.