Supreme Court supports state's AWP

Saturday, May 31, 2003

WASHINGTON — HME providers that depend on access to managed care contracts heaved a sigh of relief in early April when the Supreme Court upheld Kentucky’s right to regulate the insurance industry with an any-willing-provider statute. That law prohibits insurance companies from excluding providers who are willing to accept the terms of an HMO’s plan.

The unanimous Supreme Court ruling does not open the door to managed care contracts for all providers, but it does affirm the state’s right to open those doors. About 25 states have passed any-willing-provider laws. The Kentucky statute is generally regarded as one of the broadest in the nation.

The 1996 Kentucky law helped propel Pennyrile Home Medical’s managed care business from about 2% to 10% of its payer mix. Now that the Supreme Court has kept the green light shining, Pennyrile expects to see that percentage climb to 20%.

“Until we had that law in Kentucky, most of us were left out of the loop,” said David Chestnut, Pennyrile’s president. “For smaller businesses, it’s critical that we have access. Without it, I don’t see many of us surviving.”

The insurance industry believes that any-willing-provider statutes hinder an HMO’s ability to negotiate lower rates for high-volume business — a problem the HME industry has identified as it contemplates the prospect competitive bidding on an uncertain book of business. HME