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Senate Journal: Page 980: Monday, April 3, 2000

  Senate File 2203 requires health insurance carriers and organized delivery
  systems
  (ODS) to accept written assignment of benefits from individuals covered
  under health
  benefit contracts.  This assignment provides payment of benefits directly
  from the
  carrier or ODS to the health care provider.

  There are distinct, competing views of the impact of this legislation.  The
  proponent
  groups, which include physician and hospital associations, contend the bill
  provides
  consumer choice and efficiency in the billing process.  The opponent groups,
  which
  include insurers, labor organizations, and Iowa Farm Bureau, contend the
  bill will
  increase cost to consumers and will cause consumers to be balance billed -
  having to
  pay the difference between the total provider bill and the amount covered by
  insurance.

  I appreciate and support the need to improve efficiency and to ease the
  burden on
  consumers of dealing with what can be a very confusing billing process.  I
  am, however,
  concerned about the cost increases that consumers could experience and the
  potential
  increased burden to taxpayers.  I believe, based upon the information I have
  been
  provided, the potential cost of this bill outweighs the benefits of the
  billing efficiencies.

  I have reviewed information received from other states that have enacted
  legislation similar to SF 2203.  While that information is not conclusive,
  the potential
  adverse fiscal impact is troublesome.  It could also negatively impact a
  consumer's
  ability to access health care due to lack of adequate provider networks.

  I have also reviewed the fiscal note developed by the Legislative Fiscal
  Bureau as
  well as information developed by the Iowa Department of Management.  The
  fiscal
  note states that the fiscal impact on the state can not be determined due to
  a lack of
  sufficient information and concludes that the bill could encourage state
  employees to
  access providers outside of a network at a possible higher cost.  The
  Department of
  Management states that it is difficult to estimate the fiscal impact since
  it is unknown
  whether or not providers will continue their current contractual
  arrangements.  It's
  unfortunate that legislators did not consider or discuss with me prior to
  passing this
  legislation the potential fiscal impact to the state budget.

  Considering the demands on the general fund and the lack of information that
  can
  more accurately define the financial risk for both taxpayers and for
  consumers, it
  would not be prudent of me to sign this legislation.   I want to acknowledge
  the efforts
  that parties on both sides of this bill have made the past few days to craft
  a solution to
  the above mentioned concerns.  I remain open to discussing or reviewing
  legislation
  that will address the need for a more efficient billing system, would
  provide for a more
  equitable balance in the negotiation process between insurers and providers,
  and
  would eliminate the potential risks for consumers and the state budget.

  For the above reasons, I hereby respectfully disapprove Senate File 2203.


  Sincerely,
  THOMAS J. VILSACK
  Governor

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