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Two years under Arkansas’s “any willing provider” law have resulted in greater choice for consumers and higher numbers of patients for hospitals, but some questions remain about the effect on the cost of healthcare.

“It’s been a positive for Baptist Health from a volume standpoint,” said Bob Roberts, vice president of financial services for Baptist Health. “We’ve signed more contracts from insurers than before. When you look at it from a patient volume standpoint, we’ve seen about 2,000 more inpatient stays than we would have before ‘any willing provider.’”

That is around a 2 percent increase in inpatient volume, Roberts said. In terms of outpatient volume, the increase has been around 5 percent.
Until the law’s implementation, Baptist Health was the Blue Cross and Blue Shield of Arkansas in-network hospital in Little Rock.

The bottom line is that the legislation has increased Baptist Health’s volume and provided more access for consumers, Roberts explained.

The “any willing provider” law requires health insurers to include any physician as an approved provider as long as the doctor is willing to accept other conditions the insurer negotiated with network members. The conditions include the reimbursement amounts for medical services.

The state legislature passed the law in 1995, but opponents, which included major insurers, challenged the statute. Arkansas did not begin enforcing the law until 2005, when a federal appeals court ruled that the law applied to all insurance plans, with one major exception: self-funded Employee Retirement Income Security Act plans.

Supporters of “any willing provider” argued the law would increase patient choice, reduce travel times and result in improved care for patients. Opponents said the law would increase costs by limiting insurers’ ability to negotiate lower prices with providers in exchange for higher patient volumes. Opponents also said the law would boost administrative expenses, further inflating healthcare costs.

In early 2006, managed care consultants HealthLeaders-Interstudy released a report saying the law would likely drive down health plan premiums for the short term. But over the long term, the non-exclusive provider networks would have less control over costs, resulting in higher prices for consumers.

Max Heuer, a spokeswoman for Arkansas Blue Cross, said it’s still a little too early to gauge the long-term impact on costs.

It took a little time after the court ruling for insurers to get applications from new providers and to begin processing them, Heuer said.

“We always believed it would take a minimum of two rating cycles to see the impact of ‘any willing provider,’” Heuer said. “What we’re seeing at this early stage is an increase in utilization driving an increase in cost trends.”
During 2005-06, Blue Cross saw provider group applications increase by 750 percent, she said.

For example, the True Blue PPO had 6,613 providers in 2005 and 8,036 in 2006, she said. The cost for screening and processing all of the additional applications, including adding new personnel to do the work, was $500,000.
Insurers’ administrative burden will also be increased by the addition of 18 new categories of providers whose applications insurers were responsible for screening and processing, Heuer said.

The “any willing provider law” has clearly increased costs, Heuer said. Although the number of provider applications Blue Cross is receiving leveled off in 2006-07, the volume is still twice what the insurer handled before the law’s implementation.

The Arkansas Hospital Association pushed for the law’s passage in 1995. But the association remained mostly neutral in 2005, when the legislature passed several new “any willing provider” statutes in case the U.S. Court of Appeals in St. Louis found the 1995 law invalid.

Paul Cunningham, senior vice president of the Arkansas Hospital Association, said the overall impact of the law has been about what most people expected.
“I guess it gives you the opportunity to increase your number of patients, whether inpatient or outpatient, beyond just those groups that you had been a member of their networks,” Cunningham said.

Prior to the law’s enforcement, some hospitals complained that they could not get into the Blue Cross network, and therefore, those patients went to other hospitals, Cunningham said. The hospitals that once were not part of the Blue Cross network can now offer their services to Blue Cross members.

But at the same time, hospitals that might have been exclusively Blue Cross can now draw patients from other payer groups, such as United HealthCare of Arkansas and QualChoice of Arkansas.

“I think generally for most hospitals it was a fairly positive experience. I can only guess, I’m not really speaking for them,” Cunningham said. “But we haven’t heard many complaints about it.”



August 2007

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