Conversation With: Dr. Don Read, TMA President, Talks Balance Billing, Physician Independence, Narrow Networks

Dr. Don Read, the new president of the Texas Medical Association. (Credit: TMA)
Dr. Don Read, the new president of the Texas Medical Association. (Credit: TMA)

One Saturday morning last month, Dr. Don Read stood before the Texas Medical Association’s House of Delegates with a tie around his neck that featured something like six different iterations of the Lone Star State and delivered a treatise on preparing to swim with proverbial sharks. This, of course, wasn’t literal. But the simile was how the TMA’s new president (and longtime Dallas colorectal surgeon) interprets the environment for physicians, especially those stubborn ones who remain in private practice.

So, yes, not only are doctors swimming upstream, but they’ve got some potentially threatening company. Hospital systems are buying up physician practices. Insurance companies are shrinking their networks to control costs. Deductibles are sailing upward, and legislators seem none too interested in helping about a million ‘working poor’ Texans get insurance. Get ready to dive deep.

In the interview below, Read dug in on what he sees as the biggest topics facing Texas physicians for the next 12 months. He’ll remain president of the largest physician association in the country (more than 48,000 strong) through the end of next May, right as the drumbeat of the 85th Legislature fades out for another two years (barring a special session). It’s been edited for length and clarity. Look for more—including his thoughts on the Zika virus, West Nile, and why, dangit, physicians need to get involved politically—later in the week. 

D Healthcare Daily: Can you talk a bit about what it’s like being president in the run-up to the Legislative session and some of the things you hope to accomplish and get on the radar of the folks in Austin?

Read: Obviously we have to work with committee meetings out of session before they get into session because if you wait until the session meets you’re already in trouble. Our agenda always is, No. 1, to protect tort reforms at all costs since we worked so hard to get it and the lawyers are always trying to chip away at the edges to break it down. Our second mission is to always try and find more money to make healthcare accessible to the poor and working poor which, obviously, Texas doesn’t do a very good job of. The TMA in general, unrelated to the legislature, we had to balance the fact that we support our physicians who are in private practice, who are still the majority of our members, but we have to protect the physicians who choose to become hospital employees because the hospital runs it and tells them what to do and makes them do things that if they weren’t employees they may not do.

That’s pretty much it. But balance billing, surprise bills are going to be a big thing in the legislature this year.

DHCD: Dr. Valenti, the outgoing chair of the council on socioeconomics, said balance billing was one of the biggest issues the TMA has faced since tort reform. Can you explain to me why this is such a serious issue for physicians?

Read: It used to be you bought health insurance and your doctor may or may not be on the plan, but you pick a primary care doctor who was on your plan and if something was done by a doctor who wasn’t on your plan, the insurance company would pay for it through an out of network rate. It wasn’t an issue to you. It used to be your deductibles were $200 a year and last year they were, for commercial insurance, about $1,000 a year and for Obamacare this year will likely be $3,000 out of pocket. When it was only a $200 deductible, none of that was on the radar.

The insurance companies are perpetually narrowing their networks. So their goal, all of them, is to have very narrow networks where they don’t have many doctors on each. In Houston a year or two ago, one of the ER groups at one of the hospitals was cut off the plan by the insurance companies. Now the patient goes to the ER, that doctor’s not on the plan so they get a bill from the doctor because he wasn’t on their plan. Then the patient complains that ‘I got this bill from the doctor, but the hospital was on my plan and it should’ve been paid for.’ The next iteration of all that is, logically, you may think you can pass a law that you can’t balance bill or the insurance company has to pay a set out of network rate for everything. The problem is if the individual physician or their group can’t negotiate with the insurance company, then the insurance company is going to offer a solo practitioner a take it or leave it deal.

A group like mine, which has 14 colorectal surgeons, has some negotiating power. So we may get a better deal than the solo doctor in practice. But if you can’t negotiate at all, the insurance company will give you a take it or leave it plan that’s maybe 20 percent, 30 percent, 50 percent less than it was before. And you have to take it because you can’t balance bill.

DHCD: So what is the ideal way the TMA believes this can be addressed?

Read: Ideally, the Texas Department of Insurance would ride herd on the insurance companies and make sure that they had adequate networks. Most of the time in the last decade, the TDI has been controlled by the insurance industry so they don’t do a very good job at that.

For instance, one of my friends is an oncologist at Medical City. One of his patients who comes in routinely for care got a new Obamacare plan and she needed a new primary care physician to make the referral. She lives in Plano. The closest on her plan was in Waco. So obviously that is not an adequate network. As long as insurance companies can get away with it, they’ll keep squeezing down their network. We need better supervision by the Texas Department of Insurance to make sure there’s network adequacy. We need the insurance companies to educate patients on what they’re really getting with their insurance because they don’t have a clue what they’re getting.

DHCD: Do you feel we need to redefine what an adequate network is?

Read: The Texas Department of Insurance doesn’t seem to have a clear definition.

DHCD: Some of the concern too is that when balance billing does occur and the physician bills because they’re not in network and were part of the care team, some of those rates can be pretty high. Can you talk a bit about that and whether this onus falls on the physician as well?

Read: So typically when the patient gets balance billed they get billed for the standard rate for that care. The physician who bills that, that may be their standard rate or they may have negotiated a lower reimbursement from the insurance plan. It is typically their standard rate. Now, there are occasionally egregious examples like in New York the last few years an assistant neurosurgeon billed $100,000 for assisting in surgery. Those people ought to be shot at dawn. That’s clearly not a reasonable or ethical thing to do. But most of the time, the charges are reasonable, just the patient doesn’t expect them. You’ll realize that the best example of abuse in the system, and I don’t know if I should say this, but an example of how the system can be abused is the Forest Park Dallas hospital. Most of the physicians who practice there weren’t doing all out of network billing, but the people, the core of people that started it, that was their business plan. It ended up bad for all those other doctors that weren’t doing that that used that facility, too.

DHCD: Let’s pivot a bit and talk about TMA PracticeEdge, the TMA’s accountable care organization and physician services company for independent doctors. How is that being received?

Read: Very well. I think this is the most important thing the TMA has done since we got tort reform passed. We would’ve liked to roll it out a couple years sooner in theory, but we got the groundwork started after about a year and then took another to get it implemented. So we got it off the ground in warp speed, but a lot of people became hospital employees in the meantime because they didn’t have a way to stay in independent practice and compete with the hospitals. It was born to help physicians to stay in independent practice and not be owned by a hospital and yet be part of an ACO and compete with the hospitals that were putting out ACOs.

DHCD: So are physicians coming to it?

Read: Yes. Most of them are in South Texas, but we are meeting and exceeding our goals for how many covered lives we needed year by year.

DHCD: Do you think it came too late?

Read: I think it came too late, but it came as early as we could politically achieve it. Politically within the TMA.

DHCD: The last time I spoke with someone about it I learned that it was rolling out in phases.

Read: They are indeed looking at other things. The first thing they rolled out was buying medical supplies through a discounted contract. They’re trying to find ways to make PracticeEdge an advantage for specialists because ACOs are obviously geared toward primary care physicians. So they’re trying to look around and see if they can make this a good thing for specialists.

DHCD: You were involved in Project Access Dallas, which aimed to bring healthcare to the poor and uninsured. In the years since it was killed, the conversation and debate over how to pay for this has only grown to more of a fever pitch. It’s looking more and more likely that the 1115 Medicaid Transformation Waiver won’t look like it does today once the 15-month extension expires.

Read: Oh, I think it’ll go away.

DHCD: When you look at it, physicians aren’t seeing a lot of those funds because it’s going to treating the uninsured after they’re treated in the hospitals.

Read: Well, physicians may be seeing some of that money outside of the Dallas-Fort Worth area. But in the Dallas area, the Dallas County Medical Society was in negotiation with the different hospital groups to roll over Project Access with the 1115 waiver to where the physicians would be paid Medicare rates for taking care of these patients. It was all agreed upon, and at the last minute the hospitals pulled out. They just kept the money.

But the 1115 waiver is designed to create new and creative ways of providing care to the uninsured and underinsured and that did not happen in Dallas.

DHCD: You believe it’s going away. So what is the TMA’s focus in getting this huge need addressed in the legislative session next year?

Read: I don’t think we have an actual game plan yet because the approval of the 1115 waiver just came out. We haven’t had time to sit down and discuss that. The DCMS for the last couple years is looking into some way to have some other program roll out to help the underinsured, the working poor. But I’m not involved in that part of it.

DHCD: Do you see much of a chance of the Legislature being a bit more receptive to at least discussing Medicaid expansion or an alternative this session?

Read: For the record, no. At the last session, they specifically cut some money that was going to go to healthcare because they didn’t want to see more money spent on healthcare than education. They’re basically equal, and as we, if we did expand Medicaid like the federal government would like us to, there’d be a lot more people in Medicaid. We’d get a lot of money, but we’d be taking care of a lot more people.

DHCD: So how do you address that challenge, going to these legislators that have been less than receptive to any sort of reform?

Read: There should be some way around it, and the last two sessions we discussed having a ‘Texas Plan’ where they used some money to provide care but just not in the form of Medicaid per se. Medicaid is both good and bad. In rural areas, doctors and hospitals are absolutely dependent upon Medicaid to survive. Expansion of Medicaid would save some hospitals that would go under. They’re providing uncompensated care in the city, Medicaid pays much less than medicare and there are primary care physicians who would take Medicaid, but about 39 percent, maybe, would take a new Medicaid patient. Only 19 percent of specialists would take a new Medicaid patient. You can have Medicaid and not have access to care.

So the answer to that, conceptually, is if you pay doctors who take care of Medicaid patients Medicare rates, then more people would participate. I keep telling people when they ask me if I’m going to retire some day, I keep saying I’m going to keep practicing until I have to pay to see patients. Overhead is high because of all the malarkey we go through with the insurance companies. We have twice the staff we need just to deal with the insurance companies. So my individual overhead with the group is high. I have to see a certain number of patients to make any money. It may come some day that I’ll be paying to see patients.