Regence Rate Decision Sparks Consumer Watchdog Approach

Sen. Chip Shields is proposing legislation that would give consumer groups access to proprietary information before the Insurance Division approves rate requests

January 8, 2012 -- When insurance officials made a decision about a rate request by Regence BlueCross BlueShield after reviewing documents behind closed doors last summer, it raised the ire of Sen. Chip Shields (D-Portland).

A strong proponent of transparency, he’s drafting legislation that would let consumer watchdog groups such as OSPIRG have access to such proprietary information, giving them intervener status.

“Right now there’s no independent check on whether information being withheld from the public should be withheld, and if we had access to this information, we’d know if that were true,” said Jesse Ellis O’Brien, consumer advocate for OSPIRG.

Currently, OSPIRG reviews insurance rate requests on behalf of consumers, then makes recommendations to the Insurance Division and received grant funds for this project.

“There needs to be a better solution than what happened in the Regence case,” O’Brien said. “We support taking steps to make this information more transparent so there’s a more robust watchdog function in rate review where we’d be held to strict confidentiality standards.”

Last August, insurance regulators repeatedly asked Regence for details about the increased costs from its provider networks -- Providence Health System, Oregon Health & Science University, Legacy Health, Tuality Health and Adventist Health – and why there was a difference in the proposed rate increases.

Insisting the information was “proprietary and could cause competitive harm” Don Antonucci, president of Regence, finally agreed to let state officials review those documents at its Portland offices. But the public was shut out.

“We wanted to evaluate whether that was true or there was another strategy on the part of Regence,” O’Brien said. “They could have been trying to put pressure on some provider networks to use leverage to get concessions in contract negotiations and insurance officials wanted to evaluate this.”

A similar problem arose when Health Net asked for an 8.8% increase in their small group rates last June. After Providence Health Plan shut Health Net out of its provider network, the insurer lowered its rate request to 5.9%. The Insurance Division, which ultimately that request, considered Health Net’s information a trade secret

If Shields is successful in passing legislation, O’Brien said OSPIRG is perfectly willing to open the door to other consumer groups.

“We don’t want to be seen as regulators, and like to have open process,” he said. “The tricky thing is making sure groups with some kind of conflict of interest aren’t able to become interveners.”

Other healthcare legislation

Shields also wants to give the Attorney General the power to sue insurance companies that engage in fraud and blatant consumer abuses. Insurance is the only line of business exempt from the state's Unfair Trade Practices Act. “I want to make sure that insurance companies are fairly settling claims and fairly paying reimbursement,” he said.

And, he’s considering legislation that would require the coordinated care organizations boards to meet publicly. “Those boards need to operate in more sunlight than they are now,” he added.

Another critical issue is improving access to primary care, not just in rural communities but also urban areas. “We all need to come together and focus on that; otherwise we’re going to have a big logjam when it comes to primary care access,” he said.

Facilitating cultural competency training for healthcare providers is also on Shields’ list -- to ensure that everyone is aware of the impact of culture and possesses the skills to provide services that respond appropriately to a person's unique cultural differences, including race and ethnicity, national origin, religion, age, gender, sexual orientation or physical disability. 

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I want to commend Chip Shields for this aggressive stand with insurance companies. Chip is on the right track and I am hopeful his legislation will be moved forward.