Last week, Ohio Governor Ted Strickland signed into law House Bill 125, dubbed by supporters the Healthcare Simplification Act, which sets restrictions on the contracting rights between physicians and health insurers when negotiating reimbursement arrangements.  The new law requires insurers to provide healthcare providers with a plain summary of contract terms, updated rate information and bans clauses that require doctors to accept all of an insurer’s products or reimbursement at rates lower than originally contracted.  The law also prohibits the assignment of a physician’s contract to another insurer unless such transfer is disclosed to the physician and all of the original contract terms are honored.

In addition, a group will be established to study the costs and benefits of an internet-based database that doctors can access to check a patient’s eligibility, covered procedures, co-payments and deductibles.  The law also mandates a 90-day turn-around time for doctor credentialing and the use of a standard form designed by the Council for Affordable Quality Healthcare for inputting medical education and licensing information.

Lauded by Ohio State Medical Association as bringing fairness and efficiency to the contracting process between physicians and health insurers, the bill was opposed by both the Ohio Association of Health Plans and the American Association of Preferred Provider Organizations, who fear the measure will increase administrative costs.