Testimony Opposing SB 1723: Backdated HMO Referrals

We are writing to express our opposition to SB 1723, as the mandate undermines the cost-saving mechanisms of HMOs and disrupts the delivery of coordinated care. This change has the potential to eliminate the lower-cost option that HMOs provide when compared to Preferred Provider Organizations (PPOs) and Exclusive Provider Organizations (EPOs).

While SB 1723 does not eliminate referrals entirely, it creates a loophole that allows providers to backdate referrals up to 30 days. This has the same consequences as eliminating referrals, eroding the very foundation of HMOs. One of the main reasons many individuals and families choose HMOs as their health insurance plan is the lower cost compared to other options, such as PPOs and EPOs. A crucial factor contributing to these lower costs is the referral system, which ensures that patients receive specialized care only when deemed necessary by their primary care provider (PCP). This system enables HMOs to control healthcare costs by coordinating patient care through PCPs.

View TAHP’s full written testimony.

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